Is there a contract in the following cases? Give detailed reasons

1 Alan by a letter offers to sell his car to Brown for £1,000. Upon receipt of for your answers. Alan’s letter Brown posts a letter accepting the offer but the letter of acceptance is never received by Alan and he sells his car to White.


2 Kamau writes to Gitau offering to sell (Kamau’s) farm for £5,000. Gitau accepts Kamau’s offer subject to the price being reduced to £4,500. Kamau is not willing to sell the farm for £4,500. Gitau writes to Kamau and agrees  farm for £5,000. Kamau refuses to sell.


1 The general rule is that the acceptance of an offer must be received by the offeror before it is effective, but there is an important exception in the case of acceptance by letter, which is complete as soon as a properly addressed and stamped letter is posted, even if it is lost or destroyed in the post so that it never reached (Household Fire Insurance Co. v Grant 1879). In this case before us since Alan made his offer in writing, he impliedly authorized the use of the post in his reply . It is therefore stated that there is a binding contract between Alan and Brown, and damages would be allowed to Brown.

2 Offer comes to an end where the offeree communicates his rejection to the offeror, or where the offeree makes a counter offer. An example occurred in Hyde v Wrench, 1840. W offered to sell a farm to H for £1,000. H said he would give £950. W refused , and H then said he would give £1,000. When W refused, H sought to obtain an order of specific performance. Held, that there was no contract. H’s offer of £950 was a counter offer which evidently rejected the original offer.

The facts stated in the problem are based on the facts of the above case. It is therefore submitted that Gitau would not succeed to have the contract enforced

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