Stevenson v McLean (1880)
Court: High Court, Queen’s Bench Division
Facts: The defendant, McLean (D), offered to sell iron warrants to the plaintiffs, Stevenson, Jaques, & Co (P), at "40s., net cash, open till Monday" via telegram on Saturday, September 27. On Monday morning, P sent a telegram inquiring if D would accept "40s. for delivery over two months, or if not, the longest limit you would allow" (P's inquiry). D did not respond and instead sold the warrants to another party, sending a telegram at 1:25 pm on Monday informing P that the warrants had been sold. However, earlier that day, P had sent a telegram accepting D’s original offer before receiving D’s notice of sale. P sued for breach of contract.
Issue:
Did P’s inquiry amount to a counteroffer, effectively rejecting D’s original offer?
Was D's revocation of the offer valid and communicated before P's acceptance?
Held: The court held that McLean was liable for breach of contract. Lush J ruled that P’s inquiry was not a counteroffer, but a mere request for further information. As such, it did not reject the original offer. Additionally, the revocation was ineffective because it had not been communicated to P before P's acceptance of the offer.
Key Judicial Statement: Lush J emphasized that a mere inquiry about the terms of an offer does not amount to a rejection or counteroffer. He further stated that revocation of an offer must be received by the offeree before the acceptance is communicated for it to be effective. A promise to hold an offer open is not binding unless supported by consideration, and therefore, D was free to revoke the offer but only if the revocation had been effectively communicated.
💡Leveluplaw: Stevenson, Jaques, & Co v McLean reinforces two critical principles: (1) an inquiry about the terms of an offer does not extinguish the original offer and (2) revocation of an offer must be communicated and received by the offeree before acceptance to be valid. This case highlights the importance of effective communication in determining when an offer can no longer be accepted.