Dickinson v Dodds [1876]
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Dickinson v Dodds [1876] 2 Ch D 463 addressed the issue of whether notification of the withdrawal of an offer by a third party is effective and considered the significance of a promise to keep an offer open (an option) as a contract requiring consideration.
On 10 June 1874, Mr Dodds made an offer to sell some houses to Mr Dickinson for £800, with the offer remaining open until 9 am on 12 June. On the afternoon of 11 June, Mr Berry informed Mr. Dickinson that the houses had already been sold to Mr Allan. Mr Dickinson found Mr Dodds in a railway carriage at 7 am on 12 June, and he gave his acceptance, but Mr Dodds claimed it was too late. Mr Dickinson sued for breach of contract.
James LJ held that Mr Berry had effectively conveyed notice of the withdrawal of the offer to Mr Dickinson. The document of June 10 was considered an offer, and the statement that the offer would be left open until a specified time on 12 June indicated that it was not a binding contract but an offer. The promise to keep the offer open until a specific time lacked consideration and was not binding. The absence of consideration made it a nudum pactum, which means naked promise or bare promise that is not legally enforceable for want of consideration.
The court rejected the notion that there must be an express and actual withdrawal (retraction) of the offer. The crucial element was the existence of a continuing offer at the time of acceptance. Mellish LJ concurred, emphasising that once the offeree knew the property had been sold to someone else, it was too late to accept the offer. Baggallay JA also concurred.
The case established that communication of the withdrawal of an offer can be made by a reliable third party and does not necessarily require direct communication from the offeror. The court clarified that an option (promise to keep an offer open) must have consideration to be binding as a contract. The decision highlighted the importance of the existence of a continuing offer at the time of acceptance for a contract to be formed.
On 10 June 1874, Mr Dodds made an offer to sell some houses to Mr Dickinson for £800, with the offer remaining open until 9 am on 12 June. On the afternoon of 11 June, Mr Berry informed Mr. Dickinson that the houses had already been sold to Mr Allan. Mr Dickinson found Mr Dodds in a railway carriage at 7 am on 12 June, and he gave his acceptance, but Mr Dodds claimed it was too late. Mr Dickinson sued for breach of contract.
James LJ held that Mr Berry had effectively conveyed notice of the withdrawal of the offer to Mr Dickinson. The document of June 10 was considered an offer, and the statement that the offer would be left open until a specified time on 12 June indicated that it was not a binding contract but an offer. The promise to keep the offer open until a specific time lacked consideration and was not binding. The absence of consideration made it a nudum pactum, which means naked promise or bare promise that is not legally enforceable for want of consideration.
The court rejected the notion that there must be an express and actual withdrawal (retraction) of the offer. The crucial element was the existence of a continuing offer at the time of acceptance. Mellish LJ concurred, emphasising that once the offeree knew the property had been sold to someone else, it was too late to accept the offer. Baggallay JA also concurred.
The case established that communication of the withdrawal of an offer can be made by a reliable third party and does not necessarily require direct communication from the offeror. The court clarified that an option (promise to keep an offer open) must have consideration to be binding as a contract. The decision highlighted the importance of the existence of a continuing offer at the time of acceptance for a contract to be formed.
