Routledge v Grant [1828] 4 Bing 653; [1828] 1 WLUK 31; 130 ER 920

KEY POINTS

• Offer and acceptance are the building blocks of a contract. An offer presents specific terms, and acceptance indicates agreement to those terms, forming a legally binding agreement.

• Retracting an offer happens when the offeror withdraws the proposal before the offeree accepts it. This withdrawal must be communicated to the offeree before acceptance to avoid confusion.

• Acceptance of an offer occurs when the offeree agrees to the terms presented by the offeror. The terms must be clear and in line with the offer's requirements, and once communicated, a binding contract must be created.

FACTS

• Grant (“Defendant”) proposed to purchase a house and offered to pay a premium of £2750.

  • The terms included receiving a lease for twenty-one years with the option to extend it to thirty-one years upon giving six months' notice.

  • The Defendant agreed to pay the same yearly rent for the extended term.

  • The Defendant agreed to pay for fixtures at a valuation and to take possession on or before July 25th, with all taxes and outgoings discharged by the plaintiff until that time.

  • Routledge (“Plaintiff”) was to provide a definitive answer within six weeks from March 18th, 1825.

• Upon reaching an agreement with the landlord for a new lease, Plaintiff wrote to Defendant accepting the offer for the house at No. 59 St. James's Street, promising possession by August 1st.

  • The Defendant, in response, expressed a change of mind due to advice from a friend and requested to withdraw the proposal.

• Having already made arrangements based on the acceptance, the Plaintiff refused to withdraw the offer.

  • The Defendant contested the Plaintiff's assertion of loss and inconvenience, pointing out inconsistencies in Plaintiff's previous communications.

  • Following this exchange, the Plaintiff surrendered the existing lease to the landlord and obtained a new one for thirty-two years, starting December 25th, 1824, for the same yearly rent of £250.

• Plaintiff then wrote to Defendant, acknowledging the mistake regarding the possession date and expressing readiness to give possession according to Defendant's proposal.

JUDGEMENT

• It was held that Defendant had the right to retract the offer at any time during the six weeks before it was accepted. 

• It was found that the Plaintiff's claim of entitlement to a thirty-two-year term in the premises was materially different, as the Plaintiff only had a twelve-year term and no written contract to support the claim. 

• Although Defendant offered to purchase a house with the condition that possession be given on or before July 25th, and Plaintiff agreed to the terms but proposed to give possession on August 1st, it was concluded that there was no acceptance of Defendant's offer under these circumstances.

COMMENTARY

• The case illustrates the dynamics of offer and acceptance in contract law, emphasizing their role in forming legally binding agreements.

  • Offer and acceptance are indeed the foundational elements upon which contracts are built, as they represent the mutual assent between parties to be bound by the agreement's terms.

• In this case, Defendant, Grant extended an offer to purchase a house to Plaintiff Routledge, outlining specific terms including the premium, lease duration, rental rates, and possession date.

  • Grant's offer, like any offer, implied that it could be retracted at any point before acceptance.

  • This highlights the importance of clear communication and timeliness in the offer and acceptance process to prevent misunderstandings and ensure fairness between parties.

• Routledge's subsequent acceptance of Grant's offer demonstrated their agreement to the proposed terms, creating the potential for a legally binding contract.

  • However, Grant's attempt to retract the offer following Routledge's acceptance introduced complexities and raised questions regarding the agreement's enforceability.

• The court's ruling reaffirmed the fundamental principle that an offer can be retracted by the offeror before acceptance, emphasizing the temporal constraints inherent in the offer and acceptance process.

  • The court scrutinized the discrepancies in Routledge's assertion of entitlement to a thirty-two-year term, highlighting the importance of accuracy and consistency in contractual claims.

  • The divergence between the agreed possession date and Routledge's proposed date shows the significance of precise adherence to the terms outlined in the offer.

• The court's determination that Grant's offer was not accepted under the altered circumstances underscores the stringent requirements for acceptance and the legal ramifications of deviation from the offer's terms.