Byrne v Leon Van Tien Hoven [1880]

Court: High Court, Common Pleas Division

Facts: On 1 October 1880, Van Tienhoven & Co, based in Cardiff, sent a letter to Byrne & Co in New York offering to sell 1000 boxes of tinplates. Byrne & Co received the offer on 11 October and accepted by telegram on the same day. However, on 8 October, Van Tienhoven & Co had sent another letter revoking the offer due to a rise in tinplate prices. This revocation letter reached Byrne & Co after they had already accepted the offer. Van Tienhoven & Co refused to complete the sale, leading Byrne & Co to sue for breach of contract.

Issue: Can an offer be revoked via post before the offeree receives notice of the revocation, or is the acceptance valid under the postal rule?

Held: The court ruled in favor of Byrne & Co, holding that the revocation of an offer must be directly communicated to the offeree to be effective. Lindley J emphasized that the postal rule, which deems acceptance effective upon posting, does not apply to revocations. In this case, Byrne & Co had accepted the offer before receiving the revocation letter, making the acceptance valid and binding.

Key Judicial Statement: Lindley J established that the revocation of an offer is only effective once it is received and understood by the offeree. The postal rule, which allows acceptance to be effective upon posting, does not extend to the revocation of an offer, as the offeree must be notified of the withdrawal for it to be valid.

💡Leveluplaw: this case sets an important precedent in contract law, clarifying that while the postal rule applies to the acceptance of offers, revocation must be directly communicated and received by the offeree. This decision safeguards offerees from the uncertainty of relying on an offer that may have been withdrawn before they were informed, ensuring a fair and clear process for contract formation.