This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
(f) Per Lord Cairns, 4 A. C. p. 316.
It is very common for an acceptance by letter to be made "subject to a formal contract being drawn up." Such an acceptance is incomplete. "Where you have a proposal or agreement expressed to be subject to a formal contract being prepared, it means what it says; it is subject to and dependent upon a formal contract being prepared " (l). So, where the proposed purchaser of a leasehold house qualified her letter of acceptance by requiring that her solicitors should "approve the title to and covenants contained in the lease, the title from the freeholder and the form of contract," it was held that there was no contract (m). And where a purchaser offered to purchase freehold property "subject to title and contract," and all material terms (as the purchaser alleged) were subsequently agreed at an interview and by letters, and were embodied by the purchaser in a draft contract which the vendor returned with a note "It seems to be all in order," it was held that there was no enforceable contract, the intention being that a formal contract should be executed (n). In Chillingworth v. Esche (o) the plaintiffs agreed to purchase certain freehold land for 4,800l. "subject to a proper contract to be prepared by the vendor's solicitors" and acknowledged having paid 240l. "as deposit and in part payment of the purchase-money," and fixed the date for completion and the vendor signed a receipt for the deposit and confirmed the sale. A proper contract was afterwards prepared by the vendors' solicitors approved by the purchasers' solicitors, and executed by the vendor. The purchaser refused to sign and claimed repayment of the deposit. It was held that there was no concluded contract and that the purchasers were entitled to recover the deposit (p).
(g) Per Sir G. Jeesel, M. R., in Crossley v. Maycock, (1874) 18 Eq. 180, 181; 43 L. J. Oh. 379; approved in Bolton Partners v. Lambert, (1889) 41 Oh. D. 295; 58 L. J. Ch. 425; and see judgment of Lord Westbury in Chinnock v. Marchioness of Ely, (1865) 4 D. J. & S. 645; Bonnewell v. Jenkins, (1877) 8 Oh. D. 70; 47 L. J. Ch. 758.
(h) Fowle v. Freeman, (1804) 9 Ves. 351; Morgan v. Holford, (1852) 1 Sm. & G. 101; and see Gibbins v. N. E. Metr. Asylum, (1847) 11 Beav. 1; 17 L. J. Oh. 5; Card v. J affray, (1805) 2 Sch. & L. 374.
(i) Gray v. Smith, (1889) 43 Ch. D. 208; 58 L. J. Ch. 803; 59 ib. 145.
(k) Winn v. Bull, (1877) 7 Ch. D. 32; 47 L. J. Ch. 139; Hawkes-worth v. Chaffey, (1886) 54 L. T. 72; Crossley v. Maycock, (1874) 18 Eq. 180.
(l) Per Jessel, M. R., in Winn v. Bull, (1877) 7 Ch. D. p. 32; and see Uawkesworth v. Chaffey, sup.
(m) Von Hatzfeldt-windenburg v. Alexander, 1912, 1 Ch. 284.
An offer in writing may be accepted by parol, or by the acts of the other party; and if the proposal in writing is signed by the party charged, and there is a parol acceptance by the party to whom it is made, there is a sufficient memorandum within the statute (q). Where a written offer contains a stipulation that acceptance must be made within a limited time, such a stipulation may be waived by parol (r). Verbal acceptance of one of two alternatives contained in a written offer is sufficient, provided the acceptance clearly indicates which offer is accepted (s). But where a statute requires a contract to be in writing, and not merely evidenced by writing, which is all that the Statute of Frauds (t) required, a parol acceptance is not sufficient, because the acceptance is as much the contract as is the offer (u).
A written offer may be accepted by parol.
(n) Coope v. Ridout, 1920, 2 Ch. 411; 1921, 1 Ch. 291; and see Rostdale v. Benny, (1921) 1 Ch. 57.
(o) 1924, 1 Ch. 97.
(p) See also Lockett v. Norman-wright, 1925, Ch. 56.
(q) L. P. Act, 1925, a. 40, taking the place of 8. 4 of the Statute of Frauds; Reuss v. Picksley, (1866) L. R. 1 Ex. 342; 35 L. J. Ex. 218; and see Warner v. Willington, (1856) 3 Dr. 523; 25 L. J. Ch. 662.
(r) Morrell v. Studd, 1913, 2 Ch. 648.
(s) Lever v. Koffler, 1901, 1 Ch. 543; 70 L. J. Ch. 395.
It has been held that conditions of sale used at the putting up of an estate by auction, cannot be considered as impliedly incorporated with an unconditional offer by letter to purchase the property, subsequently made by a person who attended the auction (x); but the case is different, for the purpose of defence in Equity, where the parol negotiation has proceeded upon the footing of the conditions (y). And under s. 46 of the L. P. Act, 1925, the form of conditions of sale prescribed by the Lord Chancellor applies to contracts by correspondence, subject to any contrary intention expressed in such correspondence.
Conditions of sale, whether impliedly incorporated in contract.
An original offer, or, it is conceived, any subsequent proposal which does not amount to a simple acceptance of the terms of the other party, may be withdrawn or varied (z) at any time before it is accepted; even though the offeror names a time within which the offer may be accepted and such time has not elapsed (a). An offer is revoked by the death or bankruptcy of the proposer before acceptance (b); and, if rejected, either by an express refusal, whether written or verbal (c), or a proposed variation either as to time for giving possession, or price, or payment of deposit, or it is conceived, in any other particular, it at once ceases to be binding (d), though a mere request for the modification of the terms of an offer does not necessarily amount to a refusal, so as to entitle the offeror to consider his offer thereby rejected (e). Where no time is named for acceptance, the acceptance must be given within a reasonable time(f).
Offer may be withdrawn before acceptance.
If rejected, etc, it ceases to be binding.
(t) Now s. 40 of L. P. Act, 1925.
(u) Re New Eberhardt Co., (1889) 43 Ch. D. 118; 59 L. J. Ch. 73.
(x) Cowley v. Watts, (1853) 17 Jur. 172; 22 L. J. Ch. 591.
(y) See Ogilvie v. Foljambe, (1817) 3 Mer. 53.
(z) Honeyman v. Marryat, (1857) 6 H. L. C. 112; 26 L. J. Ch. 619; Chinnock v. Marchioness of Ely, (1865) 4 D. J. & S. 645.
(a) Routledge v. Grant, (1828) 4 Bing. 653; 6 L. J. (O. S.) C. P. 166; Martin v. Mitchell, (1820) 2 J. & W. 428; Lucas v. James, (1849) 7 Ha. 410; 18 L. J. Ch. 329; Dickinson v. Dodds, (1876) 2 Ch. D. 463; 45 L. J. Ch. 777; Bristol, etc. Co. v. Maggs, (1890) 44 Ch. D. 616; 59 L. J. Oh. 472.
(b) Meynell v. Surtees, (1854) 3 Sm. & G. 101; 25 L. J. Ch. 257.
(c) Sheffield Canal Co. v. Sheffield S. Co., (1843) 3 Railw. C. 121; 12 L. J. Ch. 376; Honeyman v. Marryat, (1857) 6 H. L. C. 112; 26 L. J. Ch. 619.
Must be accepted within reasonable time.
Formal notice of withdrawal of an offer is not necessary; it is sufficient if the person to whom it is made has actual knowledge (g) that the person who made it has done some act inconsistent with the continuance of the offer, such as selling the property to a third person (h).
Though where an agreement is signed animo contrahendi, parol evidence is not admissible to vary its terms, yet such evidence may be admitted to show that the signature was merely conditional, and that the agreement was intended to operate only on the happening of certain contingencies (i).
Parol evidence admissible to prove that the agreement was conditional.
Any error, obviously clerical, in an agreement, will be corrected by the Courts (k).
(d) Routledge v. Grant, (1828) 4 Bing. 653; 6 L. J. (O. S.) C. P. 166; Hyde v. Wrench, (1840) 3 Beav. 334; Thornbury v. Bevill, (1842) 1 Y. & C. C. C. 554.
(e) Stevenson v. Mclean, (1880) 5 Q. B. D. 346; 49 L. J. Q. B. 701. (f) Kennedy v. Lee, (1817) 3 Mer. at p. 454; Thornbury v. Bevill,
(1842) 1 Y. & C. C. C. 554, 563; Williams v. W., (1853) 17 Beav. 213; and see Powers v. Fowler, (1855) 4 El. & Bl. at p. 519; Meynell v. Surtees, (1854) 3 Sm. & G. 101; 25 L. J. Ch. 257.
(g) Byrne v. Van Tienhoven, (1880) 5 C. P. D. 344; 49 L. J. C. P. 316; Henthorn v. Fraser, 1892, 2 Ch. 27; 61 L. J. Ch. 373; Dickinson v. Dodds, inf.; Cartwright v. Hoogstoel, (1911) 105 L. T. 628.
(h) Dickinson v. Dodds, (1876) 2 Ch. D. 463, 472, 474; 45 L. J. Ch. 777; Cartwright v. Hoogstoel, sup.; and cf. Stevenson v. Mclean, (1880) 5 Q. B. D. 346; Byrne v. Van Tienhoven & Co., sup.
(i) Pym v. Campbell, (1856) 6 El. & Bl. 370; 25 L. J. Q. B. 277; Wake v. Harrop, (1861) 7 Jur. N. S. 710; 8 ib. 845; 31 L. J. Ex. 451; Pattle v. Hornibrook, 1897, 1 Ch. 25; 66 L. J. Ch. 144.
(k) See Wilson v. W., (1854) 5 H. L. C. 40; 23 L. J. Ch. 697; Hart v. Tulk, (1852) 2 D. M. & G. 300; 18 L. J. Ch. 162.