Ramsgate Victoria Hotel Co v Montefiore
(1866) LR 1 Ex 109
Ratio Decidendi
An offer lapses and is no longer open for acceptance after a reasonable time has elapsed. What constitutes a reasonable time is a question of fact depending on the nature of the subject matter and the circumstances of the transaction. For shares in a company, whose value fluctuates with market conditions, five months is plainly an unreasonable delay. A purported acceptance after the reasonable time has expired is of no legal effect and creates no contract; the offeree cannot be compelled to complete a transaction on terms that may be quite different in commercial substance from those prevailing when the offer was made.
ข้อเท็จจริง
In June 1864, Montefiore applied for shares in the hotel company, paying a deposit. He heard nothing until November, when the company allotted the shares and demanded the balance. Montefiore refused to pay.
สรุปคำพิพากษา
The Court of Exchequer (Pollock CB, Martin B, Channell B, and Pigott B) held unanimously that Montefiore was not obliged to take the shares. Montefiore had made an offer to subscribe for shares in June 1864, accompanied by a deposit. The hotel company took no action for over five months, during which time the value and commercial prospects of the company may have changed considerably. When the company purported to allot the shares in November, Montefiore declined to complete. The court held that an offer to subscribe for shares is not open indefinitely. The subject matter — company shares — was inherently susceptible to changes in value and circumstance. Five months was an unreasonable time to leave an offeror in suspense. The offer had therefore lapsed before the attempted acceptance in November, and no contract was formed. The company could not sue for the balance. The court drew an analogy with offers to sell perishables, which necessarily lapse quickly, and observed that offers relating to assets with fluctuating values must be treated similarly. The case confirms the general rule that an offer may be accepted only within the time fixed or, if no time is fixed, within a reasonable time.
คำกล่าวสำคัญ
"The offer was not accepted within a reasonable time, and the defendant was therefore justified in refusing the shares. An offer does not remain open indefinitely."
— Pollock CB at 111
"The subject matter of the offer — shares in a company — is of a nature that changes in value. It cannot be that an offer for such shares remains open for acceptance for so long a period as five months."
— Martin B at 113
"Where no time for acceptance is fixed, an offer remains open for a reasonable time only, and what is reasonable depends upon the nature of the subject matter."
— Channell B at 113
การอ้างอิงภายหลัง
Followed as the leading authority on lapse of offers after a reasonable time. The principle is stated in Chitty on Contracts and applied in disputes over delayed acceptance of commercial offers.
Applied in Manchester Diocesan Council for Education v Commercial & General Investments Ltd [1970] 1 WLR 241, where the court considered whether acceptance within a reasonable time had been made after an offer to sell land.
Considered in Financings Ltd v Stimson [1962] 1 WLR 1184 (CA), where the Court of Appeal held that an offer to enter a hire-purchase agreement had lapsed or been impliedly withdrawn by a change in the subject matter before acceptance.
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