Case Ramsgate Victoria Hotel V Montefiore
Introduction:
In this case defended who applied to buy shares in the company in June and also paid a deposit into the company account. So, the offer was not accepted in a reasonable time by the company. The acceptance took place in November and the company informed the defendant that shares had been allotted to him and that the balance of the purchase price should be paid. But at that time the value of the shares was less and the defendant refused to accept the shares and the court held the refusal justified because such a proposal should have been accepted within a reasonable time. The period between June and November was clearly not reasonable.
Issues: The issues in the above case deal with: Revocation of offer by lapse of time and provides for two situations:
- Lapse of time occurring upon the expiration of the time prescribed in the proposal for its acceptance. Therefore, the issue in the case was that there was no specific time limit for the acceptance of the offer given by the defended by the company.
- By the lapse of a reasonable time, in the above case the acceptance was communicated after a reasonable or practiced time. The issue in the case is based on the lapse of a reasonable time since there was no specific time was assigned for the acceptance.
Judgment:
Based on the nature of a proposal, once communicated, remains open until it lapses or is withdrawn. Under normal circumstances, there is no obligation for the proposer to keep his proposal open indefinitely.
He may revoke it at any time before acceptance. Furthermore, one of the conditions that automatically revoke the proposal is the lapse of time either specified or reasonable time limits. As in the above case the court accepted and judged against the plaintiff because no specific time was prescribed by the company and they did not communicated their acceptance within a reasonable time limit.
The offer lapsed after the reasonable time not because this must be implied in the offer but because failure to accept the offer within a reasonable time.
Moreover, the proposer at the beginning when he was submitting his application forms to be allotted shares did not allow such a long period of time and as a result he was winner of the case and the court accepted his refusal to pay the share price when the acceptance was communicated to him. Lesson learned: Firstly, from the above case I have learned that an offer can be made from any party in the contract.
It is not necessarily or compulsory that the offer should come from the party who ones the object consideration. As, in the above case the offer comes from the buyer of the shares which are owned and to be allotted by the company. Secondly, I have learned about the revocation of an offer in which the proposer can claim that the offer is revoked. Based on this case the revocation was made based on the lapse of a reasonable time which is accepted by both parties.
Although the plaintiff which sued the defendant in the court but because of the lapse of a reasonable time the court judge against the plaintiff because they didn’t have an specific time prescribed for the acceptance and also the reasonable time was lapsed. To conclude my learning from the case: The communication of proposal can be from any party who wants to conclude the contract with the second party. And in the case, two possible situations could be seen;
- Where an offer is stated to be open for a specific length of time in which the time would be prescribed either by the proposer or by the acceptor. So, when the acceptance is not given or communicated during the specified time the proposal is revoked.
- Where an offer is stated to be open for a reasonable length of time in which the chance for acceptance open utile the lapse of the reasonable time. The reasonable time is based on the nature and the custom of the business which determines for how long the door for the acceptance is open or what is the range of time that is acceptable for giving the acceptance after the proposal is communicated.
