Home | Cases | Mobil Oil Australia v Wellcome International

 

Key information

Court
Federal Court of Australia
(Full Court)

Issues
Agreement
Acceptance by conduct in unilateral agreements

Full case
AustLII

AustraliaMobil Oil Australia v Wellcome International
Mobil Oil v Lyndel Nominees

[1998] FCA 205; (1998) 81 FCR 475


Facts

Mobil represented to dealers that any dealer who performed at a set level for six years would be given a franchise for a further nine years at no cost.  Mobil subsequently discontinued the scheme and a number of dealers alleged (amongst other things) breach of contract.

Held

In a unilateral agreement the act of acceptance is also the consideration and act of performance.  In this case Mobil’s revocation of its scheme made it impossible for the dealers to complete the act of acceptance.  The trial judge held that once an offer was made, requiring performance as the act of acceptance, the offeror could not revoke the offer once the offeree has embarked upon acceptance. The Full Court disagreed. Although in some cases there may be an ‘implied ancillary unilateral contract’ in which the ‘offeror promises not to revoke once the offeree’ commences performance, that is not the same as saying that the original offer cannot be revoked - and there is no ‘universal proposition that an offeror is not at liberty to revoke the offer once the offeree ‘commences’ or ‘embarks upon’ performance of the sought act of acceptance …'

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