Court: Court of Appeal, Divisional Court, Chancery Division
Full Case Name: Dickinson v Dodds
Citation: (1876), 2 Ch D 463
Date Decided: 1876
Judges: Mellish and James LJJ and Baggallay JA
Defendant: John Dodds
Plaintiff: George Dickinson
Facts:
- The defendant, John Dodds, on Wednesday, the 10th of June, 1874, signed and delivered to the plaintiff, George Dickinson, a memorandum, whereby he agreed to sell his house to him for an amount of £800. This offer was stated to be left open until Friday, 9 o’clock a.m.. The bill therefore, in all its certainty, alleged that Dodds, the defendant, understood and intended that the plaintiff should have until Friday, 9 a.m. whithin which to determine whether he would or would not purchase the property. And that he should absolutely have until that time the refusal of the offer at the price of £800.
- The plaintiff, was in fact, determined to accept the offer on Thursday morning, 11th of June. But he did not signify his acceptance to Dodds, believing to have time until 9 a.m. on Friday.
- However, on the afternoon of 11th June, Mr. Dickinson (the plaintiff) was informed by a Mr. Berry that Dodds had agreed to sell the property to someone else named Thomas Allan. With this, on the evening of the same date, the plaintiff left a formal acceptance in writing with the mother-in-law of the defendant.
- Mr berry, the agent of Mr. Dickinson, found Dodds on Friday morning, at a railway station, where he handed the defendant a duplicate of the acceptance by the plaintiff, but was informed he was too late. Dickinson, a few minutes later, himself found Dodds, but was again informed that it was too late, for he had already sold the property to Thomas Allan on 11th June, for 800 pounds, and had received a deposit of £40 from him.
- The plaintiff bought an action of specific performance. He was successful at trial, which Dodds appealed.
Issue: The issue in the following case was whether Dodd’s promise to keep the offer open until the morning of Friday was a binding contract? And whether he was allowed to revoke his offer and sell to a third party?
Rule: The synopsis of the rule (1) follows the concept that a promise to keep a particular offer open until a certain period of time, will only be a promise, unless it is made binding by consideration and acceptance. Offer, acceptance and consideration are necessary for forming a binding contract.
Analysis:
- The letter, in the following case, as per the written opinions of J. Mellish and J. James, was merely an offer and nothing more. When there is an open offer, that is not yet accepted by the offeree, there is no binding contract between the offeror and the offeree, and therefore the offeror can make the same offer to other parties.(2) Dickinson’s argument that the offer can only be revoked through an explicit communication to the offeree is rejected by the court.
- An offer does not amount to an agreement and can be revoked at any point. Even though the offer was to remain open till 9 a.m. on Friday, it was not binding, for the acceptance wasn’t communicated. In the scenario here, the “meeting of minds”(3) which is a must for a contract to be formed could not occur, for the reason that Dodds had agreed to sell the property to a third party. A certain consideration would have supported he agreement to keep the particular property unsold for the time frame involved in the contract, as an agreement separate from the offer to sell the property. Without such, Dodds was free to break the offer, which was merely a promise and not a contract. The other party urchased the property before the plaintiff could, for there was no acceptance communicated by Dodds.
Conclusion: It was held that the statement that was made by Mr Dodds, the defendant, was merely a promise, and not a binding contract between the parties. The offer for buying the house could be revoked at any time before the acceptance, and without an explicit communication for the same. Having no meeting of minds, there was no obligation to keep open the offer.
References:
- Casebriefs Dickinson v Dodds Comments, Dickinson v. Dodds(Jul 20, 2020) https://www.casebriefs.com/blog/law/contracts/contracts-keyed-to-farnsworth/the-bargaining-process/dickinson-v-dodds/
- OneLBriefs, Dickinson v. Dodds case brief, (Jul 20, 2020)http://www.onelbriefs.com/cases/contracts/dickinson_dodds.htm
- Brett Johnson, Dickinson v. Dodds, H2O, (Jul 20, 2020)https://h2o.law.harvard.edu/collages/45118