Ramsgate Victoria Hotel v. Montefiore

Name of the CaseRamsgate Victoria Hotel v. Montefiore
Citation1865 – 1866 LR 1 Ex 109
Year of the Case1886
PlaintiffRamsgate Victoria Hotel
DefendantMontefiore
Bench/ Judge/ CourtCourt of Exchequer
Act InvolvedEnglish Contract Act

Abstract

This article aims to give readers an insight into the famous case ‘’Ramsgate Victoria Hotel V Montefiore which through its judgement highlighted that acceptance of an offer must be communicated within a reasonable time. This article talks about revocation of an offer if it is not accepted within a time prescribed with reference to Indian Contract Act, 1872.

Introduction

This case ‘’Ramsgate Victoria Hotel V Montefiore’’ is related to revocation/ withdrawal/ termination of offer due to lapses of time.

Facts

The defendant, Montefiore wanted to buy shares in the complainant’s hotel (Ramsgate Victoria Hotel). He communicated his offer to the complainant that he wanted to buy shares in the hotel at a certain price. After six months, the complainant accepted the offer. However, by this time, the value of shares had

gone down and Mr. Montefiore was no longer interested in buying shares. The defendant did not formally revoke the offer, but he did not proceed with the sale. The Complainant brought an action against the defendant for specific performance of contract.

Issue Raised

  1. Was there a binding contract between the defendant (Montefiore) and the company (Ramsgate Victoria Hotel)

Judgement

The Court passed an order in favour of the defendant. The Court held the company’s claim for specific performance was not successful because the Company had sufficient time to accept the defendant’s offer. Six months was sufficient time to accept an offer. The company accepted the offer after six months so, it was no longer valid due to expiry / lapses of a reasonable period of time. The Court was of the view that an offer must be accepted within the prescribed time and if a time is not prescribed, then it must be accepted within a reasonable period of time.

Related Provisions In Indian Contract Act, 1872

Indian Contract Act, 1872 also incorporates provisions that state that acceptance of an offer must be communicated to the offeror within the prescribed time. If time is not prescribed, then the offeree must communicate his acceptance within a reasonable period of time. The amount of time that will be considered reasonable depends on the subject matter and circumstances of the case and will be decided by the court accordingly.

Related Cases

Shree Jaya Mahal Co – operative Housing Society Ltd. v. Zenith Chemical Works Pvt. Ltd. and Others, 1990​1

In this case, the court held that reasonable time would be decided according to the subject matter and circumstances and situation of the case. The court further stated that Contracts that involve precious items or things like that which are prone to price fluctuation will have a shorter time period as reasonable time while Contracts of immovable property like land, house etc will have a longer time period as reasonable time.

R. Vinoth Kumar v. The Secretary, 1995​2

In this case, ​​an institution released applications for admission into the institution. Applicants were required to submit applications within prescribed time through post or in person. The candidate sent the application through post four day before the last date of closing. The application reached after the admission date was closed. The court held that the candidate was late in sending application

Concepts Highlighted

This case highlights the concept that an offer must be accepted within time prescribed. If no specific time is prescribed, then acceptance must be communicated within reasonable time.

If an offer is not accepted within reasonable time, it will be revoked due to lapses of time as provided in the Indian Contract Act.

FAQs

1) What Is Acceptance Under Indian Contract Act 1872 And When Should An Offer Be Accepted?

Ans: ​The Indian Contract Act,1872 defines acceptance under section 2(b) as‘’when the person the proposal has been made signifies his assent thereto, the offer is said to be accepted.

An offer must always be accepted within the prescribed time limit. If an offer does not specify prescribed time, it must always be accepted within reasonable limits. An offer accepted beyond reasonable time will not be valid and will be automatically revoked. The time which would be considered reasonable depends on the subject matter and circumstances of the case.

2) What Is Revocation / Withdrawal Of An Offer?

Ans: ​Revocation means an offer is withdrawn. Section 5 of Indian Contract Act,1872 incorporates provision of revocation of offer and acceptance. It states ‘’

A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards.’’

According to section 6 of Indian Contract Act, 1872 offer can be revoked under following circumstances:

a) By communication of notice of revocation by Offeror

  • b)    By lapses of time
  • By failure of the offeree to fulfil conditions precedent to acceptance
  • By death or insanity of the offeror

References

  1. https://www.lawteacher.net/free-law-essays/contract-law/examples-of-offer-termination-c contract-law-essay.php

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