Dickinson v. Dodds (1876) 2 Ch D 463, Court of Appeal
On Wednesday 10 June 1974 the defendant (Dodds) sent to the plaintiff (Dickinson) a note in which he stated:
‘I hereby agree to sell to Mr George Dickinson the whole of the dwelling-houses, garden ground, stabling and outbuildings thereto belonging, situate at Croft, belonging to me, for the sum of £800.’
The note was signed by the defendant and it contained the following postscript: ‘This offer to be held over until Friday, 9 o’clock a.m., 12th June 1874’. On the following day, the plaintiff was informed by his own agent, Mr Berry, that the defendant had offered to sell the property to another purchaser, Mr Allan. The defendant in fact signed a formal contract to sell the land to Mr Allan on the afternoon of 11 June for £800. The plaintiff communicated his acceptance to the defendant on the morning of the 12th before 9 a.m. but the defendant refused to accept it on the ground that he had already sold the property to Mr Allan. The plaintiff brought a bill for specific performance but the action failed on the grounds that the defendant was entitled to revoke his offer before Friday the 12th, and that the plaintiff was aware of the revocation prior to his purported acceptance so that his acceptance was not in fact valid and there was no contract between the parties.
James LJ [after referring to the document of 10 June 1874, continued]
The document, though beginning ‘I hereby agree to sell’, was nothing but an offer, and was only intended to be an offer, for the Plaintiff himself tells us that he required time to consider whether he would enter into an agreement or not. Unless both parties had then agreed there was no concluded agreement then made; it was in effect and substance only an offer to sell.
The Plaintiff, being minded not to complete the bargain at that time, added this memorandum—‘This offer to be left over until Friday, 9 o’clock a.m., 12th June, 1874’. That shews it was only an offer. There was no consideration given for the undertaking or promise, to what[1]ever extent it may be considered binding, to keep the property unsold until 9 o’clock on Friday morning; but apparently Dickinson was of opinion, and probably Dodds was of the same opinion, that he (Dodds) was bound by that promise, and could not in any way withdraw from it, or retract it, until 9 o’clock on Friday morning, and this probably explains a good deal of what afterwards took place. But it is clear settled law, on one of the clearest principles of law, that this promise, being a mere nudum pactum, was not binding, and that at any moment before a complete acceptance by Dickinson of the offer, Dodds was as free as Dickinson himself. Well, that being the state of things, it is said that the only mode in which Dodds could assert that freedom was by actually and distinctly saying to Dickinson, ‘Now I withdraw my offer’.
It appears to me that there is neither principle nor authority for the proposition that there must be an express and actual withdrawal of the offer, or what is called a retraction. It must, to constitute a contract, appear that the two minds were at one, at the same moment of time, that is, that there was an offer continuing up to the time of the acceptance. If there was not such a continuing offer, then the acceptance comes to nothing. Of course it may well be that the one man is bound in some way or other to let the other man know that his mind with regard to the offer has been changed; but in this case, beyond all question, the Plaintiff knew that Dodds was no longer minded to sell the property to him as plainly and clearly as if Dodds had told him in so many words, ‘I withdraw the offer’. This is evident from the Plaintiff’s own statements in the bill. . . .
It is to my mind quite clear that before there was any attempt at acceptance by the Plaintiff, he was perfectly well aware that Dodds had changed his mind, and that he had in fact agreed to sell the property to Allan. It is impossible, therefore, to say there was ever that existence of the same mind between the two parties which is essential in point of law to the making of an agreement. I am of opinion, therefore, that the Plaintiff has failed to prove that there was any binding contract between Dodds and himself.
Mellish LJ
I am of the same opinion. . . . If an offer has been made for the sale of property, and before that offer is accepted, the person who has made the offer enters into a binding agreement to sell the property to somebody else, and the person to whom the offer was fi rst made receives notice in some way that the property has been sold to another person, can he after that make a binding contract by the acceptance of the offer? I am of opinion that he cannot. The law may be right or wrong in saying that a person who has given to another a certain time within which to accept an offer is not bound by his promise to give that time; but, if he is not bound by that promise, and may still sell the property to someone else, and if it be the law that, in order to make a contract, the two minds must be in agreement at some one time, that is, at the time of the acceptance, how is it possible that when the person to whom the offer has been made knows that the person who has made the offer has sold the property to someone else, and that, in fact, he has not remained in the same mind to sell it to him, he can be at liberty to accept the offer and thereby make a binding contract? It seems to me that would be simply absurd.
If a man makes an offer to sell a particular horse in his stable, and says, ‘I will give you until the day after to-morrow to accept the offer’, and the next day goes and sells the horse to somebody else, and receives the purchase-money from him, can the person to whom the offer was originally made then come and say, ‘I accept’, so as to make a binding contract, and so as to be entitled to recover damages for the non-delivery of the horse? If the rule of law is that a mere offer to sell property, which can be withdrawn at any time, and which is made dependent on the acceptance of the person to whom it is made, is a mere nudum pactum, how is it possible that the person to whom the offer has been made can by acceptance make a binding contract after he knows that the person who has made the offer has sold the property to some one else? It is admitted law that, if a man who makes an offer dies, the offer cannot be accepted after he is dead, and parting with the property has very much the same effect as the death of the owner, for it makes the performance of the offer impossible. I am clearly of opinion that, just as when a man who has made an offer dies before it is accepted it is impossible that it can then be accepted, so when once the person to whom the offer was made knows that the property has been sold to some one else, it is too late for him to accept the offer, and on that ground. I am clearly of opinion that there was no binding contract for the sale of this property by Dodds to Dickinson, and even if there had been, it seems to me that the sale of the property to Allan was first in point of time. However, it is not necessary to consider, if there had been two binding contracts, which of them would be entitled to priority in equity, because there is no binding contract between Dodds and Dickinson.
Baggallay JA concurred with the judgments of James and Mellish LJJ.