Stevenson, Jaques & Co v McLean [1880]
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Stevenson, Jaques, & Co v McLean [1880] 5 QBD 346 is a notable English contract law case, focusing on the communication of acceptance through telegraph, and offering a distinctive perspective in contrast to the postal rule.
The plaintiffs, Stevenson, Jaques, & Co (P), were iron merchants engaged in purchasing and reselling iron. The defendant, McLean (D), held warrants for quantities of iron and, through a telegram dated Saturday, September 27, offered to sell iron to P for "40s., nett cash, open till Monday" (the original offer). On Monday morning, P sent a telegram to D inquiring whether D would "accept forty for delivery over two months, or if not, longest limit you would allow" (P's telegraphic inquiry). However, D did not respond to this inquiry and proceeded to sell all warrants to another party on the same day, subsequently sending a telegram to P at 1:25 pm on Monday advising of the sale of all warrants (D's telegram of warrants sold).
The key issues at hand included determining whether P's telegraphic inquiry constituted a counteroffer, the effect of which would extinguish D's original offer, and whether D effectively revoked the offer prior to its acceptance by P. Additionally, there was a question about whether D's telegram at 1:25 pm, advising of the sale of warrants, effectively revoked the original offer even though P received it after accepting the offer.
In rendering judgment, Lush J held that P's telegraphic inquiry at 9:42 am was not a rejection but a mere inquiry about potential modifications to the terms. While D had the right to revoke the offer before the end of Monday, this revocation was only effective upon reaching P. Lush J ordered D to pay £1900 to P, subject to any reduction by subsequent ruling.
Addressing the first issue, Lush J noted the nature of P's telegraphic inquiry and the volatility of the iron market, concluding that it was not a counteroffer but a mere inquiry to which D should have responded. This distinguished the case from Hyde v Wrench, where a clear counteroffer was made.
Concerning the second and third issues, Lush J clarified that a unilateral promise to hold open an offer is revocable before acceptance, but the revocation is only effective when communicated to the offeree. As P had not received D's telegram of warrants sold before accepting the offer, the original offer remained valid, resulting in the formation of a contract.
In summary, the case underscores the significance of effective communication in contract law, particularly in the context of revocation through telegraphic means, offering a nuanced perspective distinct from the traditional postal rule.
The plaintiffs, Stevenson, Jaques, & Co (P), were iron merchants engaged in purchasing and reselling iron. The defendant, McLean (D), held warrants for quantities of iron and, through a telegram dated Saturday, September 27, offered to sell iron to P for "40s., nett cash, open till Monday" (the original offer). On Monday morning, P sent a telegram to D inquiring whether D would "accept forty for delivery over two months, or if not, longest limit you would allow" (P's telegraphic inquiry). However, D did not respond to this inquiry and proceeded to sell all warrants to another party on the same day, subsequently sending a telegram to P at 1:25 pm on Monday advising of the sale of all warrants (D's telegram of warrants sold).
The key issues at hand included determining whether P's telegraphic inquiry constituted a counteroffer, the effect of which would extinguish D's original offer, and whether D effectively revoked the offer prior to its acceptance by P. Additionally, there was a question about whether D's telegram at 1:25 pm, advising of the sale of warrants, effectively revoked the original offer even though P received it after accepting the offer.
In rendering judgment, Lush J held that P's telegraphic inquiry at 9:42 am was not a rejection but a mere inquiry about potential modifications to the terms. While D had the right to revoke the offer before the end of Monday, this revocation was only effective upon reaching P. Lush J ordered D to pay £1900 to P, subject to any reduction by subsequent ruling.
Addressing the first issue, Lush J noted the nature of P's telegraphic inquiry and the volatility of the iron market, concluding that it was not a counteroffer but a mere inquiry to which D should have responded. This distinguished the case from Hyde v Wrench, where a clear counteroffer was made.
Concerning the second and third issues, Lush J clarified that a unilateral promise to hold open an offer is revocable before acceptance, but the revocation is only effective when communicated to the offeree. As P had not received D's telegram of warrants sold before accepting the offer, the original offer remained valid, resulting in the formation of a contract.
In summary, the case underscores the significance of effective communication in contract law, particularly in the context of revocation through telegraphic means, offering a nuanced perspective distinct from the traditional postal rule.
