An offer remains open for acceptance: (1) The time stated; or (2) if no time is stated, a reasonable time; provided in either case it is not sooner withdrawn.
An offer being made, how long will it last? Within what time must the offeree act upon it ? The offeror may in making the offer expressly stipulate how long it shall remain open, but more than likely he will say nothing about it. If he sets the time, that will of course govern ; if he does not set the time, then we are forced to the general statement that an offer will remain open a reasonable length of time.
In either case the offeror may withdraw his offer unless he has contracted to keep the offer open. See Section 27 below for further discussion. If no definite time is stated, what is a reasonable time? Is it one day, one week, or one month? Clearly this depends entirely on the circumstances, as the nature of the subject matter, the locality, the previous dealings of the parties, prevailing customs.
Example 20. Kempner offers to sell land to Cohn by letter reaching Cohn February 2. On February 7th Cohn accepted the offer by letter reaching Kempner February 9th. Seller lived in Hot Springs and buyer in Little Rock, Arkansas. Land was a lot in Little Rock. Jury found time not unreasonable.28
Example 21. An offer reaching offerer by telegram Monday morning between 8 o'clock and 9 o'clock offering to sell oil which at the time was rapidly fluctuating in market price was attempted to be accepted by telegram sent out Tuesday morning at 8:53 A. M. The court held the time to be unreasonable.29
28. Kempner v. Cohn, 47 Ark. 519.
It is apparent from these considerations that it is an impossible task to lay down a rule of yardstick character which one may go by. The jury is the final arbiter, subject of course to the instructions of the court. The time cannot be measured off by the clock and one who accepts after some delay may not be able to absolutely know whether he has a good case or not, and his lawyer may not be able to tell him.
No matter when the offer would expire by mere lapse of time, it may be accepted thereafter if the offeror still treats it as being in force.
A rejection of an offer by the offeree terminates it. A counter offer is equivalent to a rejection.
If the offeree positively rejects the offer, it is of course within the offeror's power to tell him that the offer is no longer open, but he may not think to do that and may have no opportunity to do so. An offeree may reject an offer, and then within the time that it would have remained open may attempt to accept it. Must the offeror honor the acceptance? The law is that the rejection terminates the offer. For clearly, if A offers B goods at certain prices, and B replies with a definite rejection, A ought then to be able to forget all about B and seek another buyer.
A counter offer is regarded as a rejection and therefore also terminates the offer.30
20. Minn. Linseed Oil Co. v. Collier White Lead Co., 4 Dill. 431 (Fed. Cas. No. 9635) ; 17 Federal Cases 447.
30. Shaw v. Ingram Day Lumber Co., 152 Ky. 329, L. R. A. 1915 D. 145.
If the offer relates to definite subject matter, and such subject matter is destroyed prior to acceptance, there is no contract.
If A offers to sell a certain horse to B and the horse dies before B accepts, there is no contract. If, however, the subject matter is destroyed out of which A intends to perform, but he may perform out of any other subject matter, the destruction of such subject matter does not terminate the offer.
The death or insanity of offeror or offeree before acceptance will terminate an offer.
Except in cases of a consideration to keep an offer open, death of the offeror before acceptance, or his insanity, will cause the offer to lapse,31 and so will the death or insanity of the offeree.32
An offer may be withdrawn at any time, unless a consideration has been given to keep it open; but the attempted revocation must actually reach the offeree before acceptance.
An offer may be withdrawn at any time, even if the offeror in withdrawing it breaks his promise to keep it open; except where the promisor for a valid consideration has agreed to keep it open (and except where under seal in those jurisdictions which still adhere to the law of the seal). The withdrawal must actually reach the offeree to be effectual.
31. Beach v. M. E. Church, 06 111. 177.
32. Sutherland v. Parkins, 75 111. 338.
Example 22. A mails an offer to B on Monday which reaches B on Tuesday. B, after receipt of the letter on Tuesday, mails his acceptance. (This completes the contract, see Section 31, post.) Prior to B's acceptance on Tuesday, A wires B a revocation which reaches B after B has deposited his letter. The revocation is ineffective.33
A contract to keep an offer open, operates to prevent its withdrawal within the time stated.
As we have seen, an offer may be withdrawn at any time before acceptance, no matter how long it would have otherwise remained open and although the promise to keep it open is thereby violated. But parties may contract that an offer shall remain open, as they may contract almost anything else, and in that case, retraction amounts to a breach of such contract.
Example 23. A offers to sell B his house for $10,000.00. B is undetermined. A, therefore, at B's request, promises to keep the offer open for ten days, in consideration that B will pay him $50.00 for the option. B agrees. A has no right to revoke." If he attempts to do so, some courts look upon the revocation as a breach of his contract not to revoke, and some look upon it as ineffectual, leaving the offer still in effect. The result is substantially the same under either theory.