Byrne v Van Tienhoven
Court of Common Pleas (1880) LR 5 CPD 344
D's offered to sell goods to P by letter dated 1 October. On 8 October, prior to acceptance, D's posted a letter revoking the offer. This letter was received by P on 20 October. In the meantime, on 11 October P received the letter and dispatched an acceptance. Was there a contract?
To be effective revocation must be communicated. Where post is used for acceptance, acceptance occurs when and where sent (provided it is contemplated as a means of acceptance) (the 'postal rule'). However, this rule does not apply in relation to revocation of offers - thus, if post is used for revocation, communication is only effective if and when it is received by the offeree. As this occurred after acceptance there was a contract formed in this case.
An offer was containing a price escalation clause. A counter offer was then made without this clause; it contained a detachable receipt which the company (original offeror) sent back with a notation that they assumed it was on their terms.