By Law Teacher
1. Introduction to Contract Law
Contract law is fascinating as most people will have unknowingly formed a legally binding contract at some point in their life. This guide will take you on a journey through a contract, giving comprehensive explanations and guidance on each part of contract law. It is important that each section is learned, as many of the principles operate in tandem and are better understood with knowledge of each section.Here is a breakdown of the main sections:
- 2. Formation – How is a contract formed, how does an individual create a legally binding agreement with another and what may prevent an agreement operating as a contract?
- 3. Privity Of Contract – Exactly who are contractual obligations owed to?
- 4. Construction – What kind of obligations can be included in a contract?
- 5. Vitiating Factors – When might a contract be void, or voidable?
- 6. Discharge Of Obligations – At what point are the parties free from their contractual obligations?
- 7. Remedies
What exactly is a contract?
Simply put, a contract can be described as a legally binding oral or written agreement which exchanges any combination of goods, services, money and property. It is a common misconception that a contract may only be in written form, as oral or conduct agreements can be just as credible in contract formation. A contract is unique in that unless certain exceptions apply, parties are free to agree to whatever terms they choose, this is known as the ‘freedom of contract’.
You may unknowingly enter hundreds of contracts a year, for example, in buying groceries from a supermarket, you have entered into a contract for the exchange of money in return for goods. This is an example of a very simple contract, but contracts can be extremely complex, owing to the parties’ freedom to agree to whatever terms they see fit.
What are the sources of contract law?
Contractual relations are between individuals, and therefore contract law is a form of civil law. The dominant source of contract law is common law, whereby the previous decisions of the courts form part of the current law. There are also various statutory provisions which support contract law, one example which will be discussed later in this guide is the Unfair Contract Terms Act 1977.
What is contract law and what does it aim to do?
Contract law aims to provide an effective legal framework for contracting parties to resolve their disputes and regulate their contractual obligations. The law of contract is mostly self-regulatory, with the majority of contracts requiring no intervention. The courts make no consideration for whether the contract was fair or not; if it was agreed, it should be enforced. Despite this, on some occasions, the courts are willing to depart from the principal of contractual freedom. This is often where there has been an abuse of bargaining power by one contracting party.
2.1.1 Offer – Introduction
Welcome to the first lesson of this module guide – the offer! The offer is the first core requirement of the formation of a contract. An understanding of this section is vital for learning contract law. Despite an ‘offer’ being a seemingly simple term, an offer will not always be explicit, and at this point it is the job of the courts to identify what does and does not constitute an offer.
If there is no offer, the other parts of the contract will not operate, this is why it is so important to be able to understand what an offer is. After completion of the section, you should be comfortable with being able to identify offers and understand how they relate to the formation of the contract.
This section will begin by giving a comprehensive explanation of what an offer actually is, before exploring how the courts will assess whether something will amount to an offer or not. Following, there will be an exploration of ‘presumptions’, which is where the court will or will not presume an offer exists based on pre-existing conduct of one party. Finally, the issue of the revocation of an offer will be considered.
Below are some goals and objectives for you to refer to after learning this section.
Goals for this section
- To understand the importance of an offer to a contract
- To understand what an offer is
- To understand what will constitute an offer
Objectives for this section
- To be able to define an offer
- To be able to apply the ‘reasonable man’ test and assess whether an offer exists
- To be able to provide arguments and counter-arguments for whether or not an offer exists based on the conduct of a party
- To be able to differentiate between an offer and an invitation to treat
- To be able to identify, understand and apply the presumptions of offers
- To be able to understand and explain the court’s reasoning behind the various presumptions
- To be able to understand the ‘multi-acceptance’ issue
- To be able to define and explain a unilateral contract
- To be able to explain when an advertisement will amount to an offer
- To be able to identify an advertisement which will amount to an offer
- To be able to identify when and how an offer may be revoked
2.1.2 Offer Lecture
What makes an offer?
The first requirement of a legally binding agreement is that there is an offer. One party is the offeror, who presents the offer, and one party is the offeree,who is the potential acceptor of the offer.
The case of Storer v Manchester City Council  1 WLR 1403 outlines that an offer is:
- An expression of willingness to contract on specified terms
- With the intention that it is to be binding once accepted
Storer v Manchester City Council confirmed that in assessing whether these conditions have been met, the courts will take an objective approach. Therefore, the courts will consider how the conduct of the offeror would appear to an objective party, which requires an application of the ‘reasonable man’ standard. Therefore, the question to ask is:
‘On examination of the offeror’s conduct as a whole, would the reasonable person consider the offeror to have expressed a willingness to contract on specified terms with the intention that it is to be binding once accepted?’
There is no consideration of the intentions of the offeror or their state of mind. Even if the offeror did not intend his conduct to amount to an offer at all, the courts may still find contractual intent amounting to an offer based on this test.
The offer must be communicated to the offeree – Taylor v Laird (1856 25 LJ Ex 329)
Offer v Invitation to Treat
An important distinction to make in contract law is that between an offer and an invitation to treat. An invitation to treat can be defined as an indication that a party is open to negotiation.
The case of Gibson v Manchester City Council  1 WLR 294 held the following statement to be an invitation to treat
“May be prepared to sell the house to you”
There was clearly no display of contractual intent, due to the words “may be prepared”, which suggest the Council were open to negotiation, and therefore the statement was construed as an invitation to treat, rather than an offer.
Here are some key distinctions between an offer and an invitation to treat.
- Certain promise to be bound
- Clear and specified terms
- The conduct or words of the party show certainty
- There is no room for negotiation
Invitation to treat:
- There is room for negotiation
- There is an invitation for offers
- There is a request for information
- Lack of certainty
Throughout the history of contract law, there has been various disputes over the distinction between an offer and an invitation to treat. Therefore, in order to provide consistency, there are a number of presumptions which are applied to certain types of conduct.
Display of goods
The case of Pharmaceutical Society of Great Britain v Boots Cash Chemists  1 QB 401 confirms that a display of goods is considered to be an invitation to treat. The specific approach taken is as follows:
- The display of goods in a shop/self-service shop are an invitation to treat
- The customer makes the offer to the cashier by presenting the goods at the service desk
- The cashier accepts the offer by scanning the goods and requesting payment
Reasons why a display of goods is an invitation to treat: There are a multitude of reasons for which the court construed the display of goods in this way. It is evident that there would be various issues with the display of goods constituting an offer. If a display of goods was an offer, the acceptance would occur when the customer removes the goods from the shelves. The type of problems that may occur are:
- The shopkeeper has no choice whether or not to sell to somebody once they have removed an item from the shelves, preventing the shopkeeper’s ability to choose their customers
- The acceptance has occurred at the price specified for the goods, meaning there can be no negotiation between the buyer and seller. This is not particularly relevant in most shops where negotiation is not possible, but it is still a relevant issue in some cases, and particularly if an item is mispriced
- A customer couldn’t choose to exchange the item for another once they have removed it from the shelf, or replace the item, as acceptance has already occurred. Otherwise, they would be in breach of contract
Display of goods in a shop window
The case of Fisher v Bell  QB 394 is the legal precedent that confirms the display of goods in a shop window is an invitation to treat. In this case, the defendant had a knife in the window of their shop with a price tag attached, which was held to be an invitation to treat.
Reasons why a display of goods in a shop window is an invitation to treat: This presumption is based upon the rules from the above case ofPharmaceutical Society v Boots Cash Chemists, in that if it was considered an offer, the shopkeeper could not pick and choose his customers.
There is a further consideration for display of goods in a shop window; the shop may have a limited stock of the item, therefore if two individuals saw the ‘offer’ at the same time and there was only one available item, the shopkeeper would be in breach of contract to one of the individuals.
As a general rule, the case of Partridge v Crittenden  2 All ER 421 rules that an advertisement is an invitation to treat. The reason for this is the “multi-acceptance” principle.
The multi-acceptance principle: If an advertisement is considered an offer, theoretically, an unlimited amount of people could accept that offer, which causes obvious problems when the advertisement is for a limited amount of goods, as the seller would be in breach of contract to each individual whom they could not provide goods for.
Theory behind the multi-acceptance principle: Following this consideration, it is obvious that an advertisement does not fulfil the requirement from Storer v Manchester City Council, as there is clearly no unequivocal display of contractual intent; the reasonable person would recognise that the individual who placed the advertisement never intended to contract with everybody who responds to the advert.
Exceptions to advertisements as invitations to treat:
- One theoretical argument suggests that an advertisement from a manufacturer may be construed as an offer, as the manufacturer would be able to make more of the item in question in response to all of the acceptances. This is not a rule, but may be a factor in a court’s decision!
- Advertisements which negate the ‘multi-acceptance’ problem. Lefkowitz v Great Minneapolis Surplus Stores Inc(1957) 86 NW 2d 689 did this by stating “3 coats for sale, first come first served”, making it clear only the first three individuals would be sold the coat.
- Unilateral contracts. A Unilateral contract is formed where the offeror makes a promise in exchange for an act by any offeree. An example of this would be where an individual puts a poster up, offering money to anybody who finds their lost dog. A practical example of this is seen in Carlill v Carbolic Smoke Ball Co Ltd 1 QB 256
In the Carlill case an advertisement promised a £100 reward to anybody who contracted influenza after using the Carbolic Smoke Ball in a certain way over a fixed period of time. This is a unilateral contract as there is only obligations for one of the parties – i.e anybody could choose to use the smoke ball, but they didn’t have to, but the seller had to pay the £100 if anybody met the requirements.
The defendant had deposited £1,000 with a bank for the purpose of paying these £100 rewards. Therefore, the court decided that as the terms were certain, and there was a clear display of intent displayed via the deposit of £1,000 for the reward payments, the advertisement should be construed as an offer.
It is important to note that not every unilateral contract is an offer, only ones where clear intent and certainty is shown.
This can be a rather complex differentiation to make, but again, it essentially requires a consideration of the rule from Storer v Manchester City Council; is there an unequivocal display of contractual intent? The objective evidence in this case was the £1,000 deposit.
A tender is where an individual seeks specific goods or services and advertises their need for them. This is construed as an invitation to treat, and any response to the tender will be an offer.
The operation of an automated machine is considered an offer, as the machine cannot negotiate the price – if an individual inserts the correct amount of coins, the contract will be formed. Acceptance is considered to take place when the offeror inserts the coins and chooses an option (Thornton v Shoe Lane Parking  2 QB 163)
Auction without reserve: Where an auction is “without reserve” (i.e there is no minimum priced bid required to win the auction) each bid is an offer, and when the auctioneer ends the bidding, this is the acceptance. Therefore, each bidder may revoke their offer at any time before the end of the bidding.
The auctioneer could, in theory, refuse to accept the offer, however, in the case of auctions, there is a collateral contract, this is between the auctioneer and the highest bidder, which involves the obligation to accept the highest bidder, meaning any refusal of a highest bid would amount to a breach of contract (Barry v Davies  1 WLR 1962).
Damages for a breach of collateral contract: The court will consider the position the bidder would have been in if his bid was accepted. For example, if the auctioneer declined a highest bid of £10 for an item worth £100, the price difference between the bid and the market price of the item would be awarded – in this case, £90.
Auction with reserve: Where an auction is “with reserve”, (i.e the owner of the goods has set a minimum price) the auctioneer is only obliged to accept any bids which are above the minimum price.
Advertisement of an auction: An advertisement of an auction is considered to be an invitation to treat, meaning an individual who intended to bid on items cannot bring an action against the auctioneer who does not auction the item. In the case of Harris v Nickerson(1872) LR 8 QB the claimant attempted to claim for travel expenses and the time spent travelling for the auction.
Revocation of an offer
How to revoke an offer: An offeror may revoke an offer at any point prior to acceptance (Routledge v Grant  4 Bing 653). In order to be effective, the revocation must be communicated. An offer may also be revoked if there is a fixed time for acceptance; once this period is over, there is an automatic revocation of the offer.
Automatic revocation of an offer: An offer will automatically be revoked after a reasonable lapse of time. ‘Reasonable’ is assessed on a case-by-case basis. In Ramsgate Victoria Hotel v Montefiore(1866) LR 1 Ex 109 an offer was accepted by the claimant six months after the offer, but the courts held that this offer had been revoked due to the lapse of time.
Third-party revocation: A third-party may also revoke the offer by communicating this to the offeree. In order for the revocation to be effective, the third-party must be objectively reliable (Dickinson v Dodds(1875) 2 Ch D 463).
Revocation of unilateral contracts: Unilateral contracts pose a different issue, as there are any number of potential offerees to communicate revocation to. In the case of unilateral contracts, the courts require the offeror to take reasonable steps to communicate the revocation. Shuey v USA (1875) 92 US 73 suggests revocation should occur in the same manner that it was offered. For example, if the offer was made via a post on a website, the revocation should also be posted on the website.
Revocation of unilateral contracts when the offeree has begun performance: As previously explained, unilateral contracts require the performance of an act for acceptance. The current judicial precedent from Dahlia v Four Millbank Nominees  Ch 231 is that the unilateral contract cannot be revoked once the offeree has embarked on performance.
Counter offers: A counter-offer from the offeree has the effect of revoking the original offer (Hyde v Wrench (1840) 49 ER 132).
2.1.3 Offer – Hands on Example
The following scenario aims to test your knowledge of what constitutes an offer and the effect on the potential contract. The answers can be found at the bottom of the page. Try to think about the relevant principles, cases and the outcomes of the scenario.
There is also a full written answer to the questions at the end of this section, which would be how you may approach a question such as this in an exam. Don’t be discouraged if you can’t identify the issues at first – applying the law is very different than learning about it! Referring back to the notes for this section should be able to help you. This section should help you see how questions regarding offers will be structured. Think about everything this section has taught you, and remember not all of the content you have learnt will be included in this question.
The sensible approach to a problem question regarding an offer is:
- Can I identify any of the presumptions (If you can identify a presumption, you won’t need to consider the objective test to decide whether the conduct constitutes an offer, simple!)
- If there is no presumption, is there an objective intention to create contractual relations
- Has there been a revocation of the offer?
After completion of this section, you may wish to create your own scenario with similar issues, or issues that have not been included in this question, which will help you further with your understanding.
Roger is a successful businessman who has just moved to London, he has an unfurnished apartment which needs renovating and furnishing. Roger decides to travel into town and make some purchases for his house.
- Roger goes into a hardware store and spots a chainsaw for £20, he desperately needs to get rid of some trees in his garden so he considers purchasing it. After a quick check online, he is surprised to find that in fact, the chainsaw is worth £250. He rushes to the till in order to make his purchase but the cashier explains that the price was a misprint, and it should have been £280. Roger explains to the cashier that they must sell it to him for £20, otherwise it is false advertising, but the cashier still refuses to sell the chainsaw.
Can Roger insist on the sale for £20?
- Roger leaves the store and attempts to ring his friend to vent his frustration, but he realises that he has lost his phone and thinks he probably dropped it whilst rushing to the cash desk with the chainsaw. Roger searches high and low in the store but can’t find it. He is about to give up when he notices a notice board for buying and selling. He quickly grabs some paper from the cashier and puts up two different adverts
- Lost phone! iPhone 12, if anybody can return it to me I will reward them £50.
- Looking for a chainsaw, will not pay any more than £150.
Subsequently, days later, Glen, a young boy, returns his phone to him and demands the £5,000 reward. Roger laughs and gives him £5 instead. Roger is also contacted by Joe who says he has a chainsaw he will sell to him for £149
What type of contract did Roger form when he put the advert for his lost phone up, and can the young boy enforce this contract against him?
What presumption does advert b fall under? The chainsaw seller is demanding Roger buy the chainsaw for £149, does he have to buy it?
- Roger’s business isn’t doing too brilliantly, and he can’t afford brand new furniture for his house. He sets off to the auction house on a Monday morning. Unbelievably, he is the only person at the auction hall. The first auction is for a sofa, and the bidding is started at £1. Roger bids £1 and wins the bid. Following, the auctioneer says “this sofa is worth £1,000, I can’t take a bid for £1!” and tells him to leave.
Can Roger make the auctioneer give him the sofa?
- The following year, Roger’s business is back on track, and he has now completed the renovation of his house. In celebration, he is hosting various charity events. At one of his events, he announces he has posted online a challenge for charity, if somebody can swim the channel between England and France in under 12 hours, he will donate £500,000 to a charity of their choice. After six months, Roger’s friend, Alex, asks Roger if he is still offering the £500,000 reward, Roger tells him he isn’t. The following week, it comes to Roger’s attention that an Olympic swimmer, Ryan, has taken up his challenge and is already half-way across the channel in under 4 hours. Roger’s investments have taken a huge dive and he no longer has the £500,000, so before Ryan completes the challenge, Roger quickly posts online that the £500,000 reward has been revoked.
Was Roger’s revocations of the offer valid, if not, is there any other way the offer may have been revoked?
The legal issue here is whether or not the display of the chainsaw was an offer, and by picking up the goods, did Roger accept the offer and form a binding contract? Essentially, does the cashier have the negotiation power to refuse the sale?
The case of Pharmaceutical Society of Great Britain v Boots Cash Chemists  1 QB 401 applies – the display of goods in an invitation to treat. This means that Roger makes the offer when he brings the chainsaw to the desk, and the cashier has every right to refuse the sale.
Outcome: Roger cannot purchase the chainsaw for £20.
The advertisement for the return of Roger’s lost phone constitutes a unilateral contract – anybody who finds Roger’s phone can accept the offer. The offer is clear and fits the criteria laid out in Carlill v Carbolic Smoke Ball Co Ltd  1 QB 256, therefore, Glen will be able to enforce the £50 reward payment.
Advert b falls under the ‘tender’ presumption. Roger does not have to buy the chainsaw for £149 from Joe, as a tender is a mere invitation to treat.
This outcome will be dependent on the type of auction. If the auction is without reserve, Roger is entitled to the sofa, and if the auctioneer refuses to give him the sofa, he would be entitled to damages of £999 (Market value minus the bid – £1,000 minus £1).
If the auction was with reserve, and the reserve was more than £1, the auctioneer would not have breached a contract by declining the bid.
This offer from Roger amounts to a unilateral contract, to revoke the contract, Roger must take reasonable steps to communicate the revocation.
Roger telling Alex the offer was revoked would not be reasonable steps, as he has only informed one person. As per Shuey v USA (1875) 92 US 73, the offer should be revoked in a similar fashion that it was offered, in this case, the offer was made online.
Therefore, when Roger revokes the offer online, this will suffice, but, as Ryan, an offeree, has begun performance, he cannot revoke the offer at this time (Dahlia v Four Millbank Nominees  Ch 231).
Roger may suggest that the offer has been revoked due to a lapse of time. Roger must argue that six months is a long enough period to automatically revoke the offer.
Full model answer
This scenario involves various contractual issues pertaining to whether or not there has been an offer made. An offer can be defined as an unequivocal display of contractual intent (Storer v Manchester City Council). This requires an objective assessment using a ‘reasonable man’ test, and does not take into consideration any subjective intentions of the parties.
The first legal issue in this scenario is whether or not Roger can purchase the chainsaw for £20, this is a question of whether or not there has been a contract formed when Roger picks up the chainsaw. In order for a contract to be formed, there must first be offer and acceptance. Roger may attempt to assert that the display of the chainsaw priced at £20 amounted to an offer, and by taking the chainsaw to the till he had accepted that offer, therefore forming a binding contract which would mean the cashier was unable to refuse the sale.
Legal precedent has developed ‘presumptions’ of what will amount to an offer, and instead of applying the test from Storer v Manchester City Council these presumptions can be followed. The case of Pharmaceutical Society of Great Britain v Boots Cash Chemists asserts that a display of goods, such as the chainsaw, does not amount to an offer, instead it will be considered an invitation to treat. This is distinct from an offer as it essentially invites others to make an offer or negotiate with the party (Gibson v Manchester City Council).
Therefore, when Roger takes the chainsaw to the till, he has not accepted an offer, he is responding to an invitation to treat. This means taking the chainsaw to the till amounts to an offer from Roger, meaning the cashier then has the discretion of whether to accept that offer or not. Following, it is clear that the cashier may refuse the sale, and Roger cannot enforce the sale for £20.
The next legal issue is whether Roger must give the Glen, who returned his iPhone, £50 as stipulated in his reward poster. The case of Partridge v Crittenden rules that the presumption is that advertisements would amount to an invitation to treat, unless the offer is for a unilateral contract with clear intention to create legal relations as per Storer v Manchester City County Council.
Roger’s poster would amount to a unilateral contract, as there is only an obligation on one party – Roger must pay the £50 reward if somebody returns his phone, but there is no obligation on anybody to find the phone. A unilateral contract will be for the performance of an act, acceptance takes place on performance of the act, and there is no requirement to communicate an intention to perform the act, the performance alone is sufficient as acceptance.
Applying the subjective reasonable man test to Roger’s poster, it is clear there is an intention to create legal relations, as the £50 reward is a reasonable amount for the return of an expensive possession. If the reward had been, for example, £5,000, the courts would rule that the reasonable man would not consider Roger’s advert to express an unequivocal intention to create legal relations, as £5,000 is an absurd amount and probably more than the cost of the actual phone – it would be seen as a marketing device, or a ‘mere puff’ as suggested in Carlill v Carbolic Smoke Ball Co Ltd.
Therefore, as there is an offer, it is clear that when the boy returns Roger’s phone, he has performed the requisite act that constitutes acceptance, meaning a binding contract had been formed and Roger would have to pay the whole £50 as promised in his reward poster.
Tender for chainsaw
The next legal issue is whether Roger must buy the £149 chainsaw in light of his poster which states he is looking to buy a chainsaw for any price below £150. This poster amounts to a tender, which is where an individual seeks specific goods or services, advertising their requirement for them. Roger is seeking the purchase of a chainsaw, therefore this amounts to a tender.
A tender has a presumption that it will be an invitation to treat, as parties will then contact the owner of the tender to negotiate/offer their goods/services. Therefore, when Roger is contacted by Joe, this amounts to an offer, meaning Roger can decline the offer, and is subsequently not bound to buy the chainsaw for £149.
The legal issue with the sofa is whether there has been offer and acceptance between Roger and the auctioneer which would result in a binding contract. A definitive decision cannot be made on the facts given, as it is not clear whether the auction is with reserve or without reserve. Following, both scenarios will be considered and explained.
If the auction is without reserve, the case of Barry v Davies is precedent that the presumption is that each bid is an offer, and that acceptance occurs when the auctioneer ends the bidding. This suggests that the auctioneer may refuse bids, but as there is a collateral contract between the auctioneer and the bidders to accept the highest bid, any refusal of a highest bid would amount to a breach of contract. Therefore, the auctioneer cannot decline Roger’s bid, and must allow Roger to buy the sofa for £1.
If the auctioneer refuses to allow Roger to take the sofa, he will be awarded damages which amount to the difference between the market value of the sofa and his bid. The market value of the sofa is £1,000; therefore, the damages will amount to £999.
If the auction is with reserve, an auctioneer is only obliged to accept any bids which are above the minimum reserve price. Therefore, if the reserve price is higher than £1, the auctioneer can legally prevent Roger from purchasing the Sofa.
The reward for swimming the channel
The legal issue here is whether Roger’s offer would amount to an offer, and if so, can Roger revoke the offer so to not be required to pay the reward to Ryan.
For identical reasoning as the reward poster regarding the return of the phone, the promise of a £500,000 donation for somebody to swim the channel in under 12 hours will amount to a unilateral contract. Whether or not it would amount to an offer is dependent on whether the requisite intention is clear from the view of the objective reasonable person.
Roger may attempt to argue his original offer was in fact not an offer, as no reasonable person would objectively consider it to be an intention to create legal relations, as the challenge was absurd and practically an impossibility. Evidently, this argument would fail as it is in fact a clear possibility if Ryan is able to complete half of the swim in under 4 hours. This may also involve a consideration of past successful swims/attempts at swimming the channel – has anybody been close to beating 12 hours or actually beat it? This argument is tenuous at best given the facts and would likely fail.
In the same vein as above, he may argue the reasonable person would not identify an intention to create legal relations due to the extremely high reward of £500,000. This would depend on the public’s perception of Roger, if it was known he was extremely wealthy and charitable the reasonable person would consider his offer to have clear intent. The fact he was hosting various charitable events would give weight to this suggestion, if he had donated similar amounts previous this would also support this assertion. However, if his wealth was unknown to the public, the reasonable person would likely consider such an offer to be some kind of joke, meaning it would lack the required objective intention.
If the courts find that the required intention is clear, and the advertisement is considered an offer, the legal issue here is whether Roger has successfully revoked the offer in order to prevent him having to pay the £500,000.
Roger’s first attempt at revocation comes when he tells his friend, Alex, that the offer is revoked. Reasonable steps must be taken to revoke a unilateral contract, which Shuey v USA suggests would involve a revocation in a similar fashion to the way in which the offer was made. In this case, the offer was posted online, meaning an online post would amount to revocation. It is clear that privately telling Alex would not constitute ‘reasonable steps’, meaning the revocation is ineffective at this point.
However, Roger does at a later point post his revocation online. Unfortunately, as per Dahlia v Four Millbank Nominees, a unilateral offer cannot be revoked once an offeree has begun performance. At this point, Ryan has already started on performance, as he is half way across the channel, meaning this revocation is ineffective, and once Ryan completes performance, Roger will be bound to pay the £500,000.
Roger may attempt to argue that the offer has been automatically revoked due to a lapse of time. The time required is a ‘reasonable time’. In the case of Ramsgate Victoria Hotel v Montefiore 6 months was held to be a reasonable time, but this was due to the subject matter of the contract being shares, which had volatile prices and it would be unfair to leave such an offer open. In Roger’s case, the difficulty of swimming the channel would not fluctuate and could not be considered ‘volatile’, meaning it is likely the courts would rule in favour of Ryan, that the offer had not been revoked due to a lapse of time. The only argument Roger may assert is that the difficulty of swimming the channel is volatile dependent on the time of year – perhaps the offer was made in the winter and it is considerably easier to swim the channel six months later, in the summer, therefore, the lapse of time to the summer would revoke the offer. However, this is not clear from the facts, but is one potential argument Roger may use.
Concluding: Roger would not be able to buy the chainsaw for £20; he must give the £50 reward to Glen; he would not have to purchase a chainsaw from Joe; the outcome of the sofa is dependent on whether the auction was with or without reserve; Roger would probably be bound to pay the £500,000 to Ryan if he completes the swim in under twelve hours, but his strongest potential counter-argument being with regards to the £500,00 being an extremely high reward and no objective reasonable person would take the offer seriously, although this is dependent on his previous conduct and public perception.