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Routledge v Grant [1828] 4 Bing 653

FORMATION OF CONTRACT – OFFER OF SALE

Facts

The defendant ed the claimant in writing, offering to purchase the lease of the claimant’s home. The offer stated that it would remain open to the claimant for a period of six weeks. However, during this period, before the claimant had accepted, the defendant changed his mind about the purchase and wrote to the claimant once again purporting to withdraw the offer. After receiving this second letter, still within six weeks from the first, the claimant accepted the defendant’s offer.

Issue

The issue was whether the defendant was contractually bound by his original letter to keep the offer open for six weeks, and by extension whether he was therefore bound by the claimant’s acceptance within that period.

Held

The court held that the original letter did not bind the defendant to keep the offer open for a full six weeks, and as such it had been validly withdrawn by the defendant, and the claimant’s purported acceptance was ineffective. The underlying reason for this was that it is a fundamental principle of contract law that one party cannot be bound whilst the other is not. In the words of Best CJ:

“… If a party make an offer and fix a period within which it is to be accepted or rejected by the person to whom it is made, though the latter may at any time within the stipulated period accept the offer, still the former may also at any time before it is accepted retract it; for to be valid, the contract must be mutual: both or neither of the parties must be bound by it…” (p. 4).


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