Dickinson v Dodds [1876]

Court: Court of Appeal

Facts: On 10 June 1874, Mr. Dodds made an offer to sell houses to Mr. Dickinson for £800, stating that the offer would remain open until 9 am on 12 June. On 11 June, Mr. Berry, a mutual acquaintance, informed Mr. Dickinson that Dodds had already sold the property to a third party, Mr. Allan. Despite this, Dickinson found Dodds at 7 am on 12 June and attempted to accept the offer. Dodds, however, rejected the acceptance, stating that it was too late. Dickinson then sued for breach of contract, arguing that Dodds had promised to keep the offer open until 12 June.

Issue: Can an offer be effectively withdrawn by third-party communication, and is a promise to keep an offer open enforceable without consideration?

Held: The Court of Appeal ruled in favor of Dodds, holding that the offer had been effectively withdrawn before Dickinson’s acceptance. James LJ determined that the notification by Mr. Berry, a reliable third party, was sufficient to convey the withdrawal of the offer. The statement in the offer that it would remain open until 12 June was not a binding contract, as there was no consideration to support this promise. Without consideration, the promise was merely a "nudum pactum" and not legally enforceable. The court further held that once Dickinson knew the property had been sold, it was too late to accept the offer.

Key Judicial Statement: The court emphasized that an offer can be revoked by a third party, provided the information is reliable. Additionally, a promise to keep an offer open for a specified period is unenforceable unless supported by consideration.

💡Leveluplaw: This case establishes two important principles in contract law: (1) an offer can be revoked through third-party communication if the offeree receives reliable notice of the revocation, and (2) a promise to keep an offer open, known as an option, must be supported by consideration to be legally binding. The ruling clarifies that the existence of a continuing offer at the time of acceptance is essential for forming a contract.