Contract law and reward withdrawal in lost property cases

¶ … law that there must be at least two persons involved in a contract and that the two parties must agree on the same thing in an identical manner. Thus one person makes an offer to do or abstain from doing a thing while the other accepts the offer. On the acceptance of the other party the contract becomes binding subject to other legalities involved. The offeror thus makes a very clear promise or offer. In the given case, Cindy published an advertisement offering Pound 25 reward for the finding and return of her cat. In such cases the advertiser makes the offer to the whole public. This is same as in a case where in a window a commodity is offered for sale with a tag. In both cases the offer is made to all the public who may chance to read the advertisement and to those who see the goods in the shop window.

The law requires two or more parties in the contract. In this case the offerer was Cindy. The question is who are the offerees and how will they accept the offer? In general cases where the offer is made between persons the law is very clear and many rulings have laid down the position of offer and acceptance and the consequences. However the problem comes where a person advertises in a news paper either offering a service or requiring a service for which a sum of money or other value forms the consideration. The advertisement may merely be an invitation to offer. For example if a shop keeper keeps a certain coat in the window of his shop with the sign for sale, it is not an offer by itself but an invitation to offer. The offer comes from the side of the customer who requires the coat. On the other hand a person may directly make an offer, as in the case where property is lost and the advertisement says 'finders of X will be rewarded with money'. In such cases is it an offer? Courts have ruled that such a specific advertisement is an offer. The offer does not require specific parties to whom it must be made. It was called the 'unilateral offer.'

Discussion

Unilateral Offers

The law of contracts differentiates these types of offers as unilateral offers with only the offerer and an unknown quantity of offerees on the other side. This type of offer was discussed first in Carlill v. Carbolic Smoke Ball Company

The Case was that the Company advertised its Carbolic Smoke Ball as a preventive for influenza and made the statement "£100 reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the influenza after having used the ball three times daily for two weeks according to the printed directions supplied with each ball."

The advertisement was made to the general public through a news paper. It was contended by the respondent that the offer was not binding. The argument was that the offer was not made to anyone in particular. Lord Justice Lindley answered this with the reasoning that all those who perform the conditions of the advertisement have accepted the offer. His Lordship also relied on Williams v. Carwardine 4 B. Ad. 621; which relays the same import that was set out in this case regarding advertisements offering rewards.

Thus it can be established that when Cindy published the offering of 25 rewards for finding and return of the cat, any person who finds the cat Toby, or institutes a search for the cat has in effect taken Cindy on her offer. It is shown that Dozey, a neighbour, found the cat after two days of searching. At the point of returning the cat, Cindy tells him that the offer has been withdrawn. The question then is when and how could have Cindy told the claimant Dozey of her withdrawal even before he accepted it? In the Carbolic Smokeball Case reliance was placed on the ruling of Lord Blackburn (Brogdenv. Metropolitan Ry. Co. 2 App. Cas. 666, 691) -- "the person who makes the offer gets the notice of acceptance contemporaneously with his notice of the performance of the condition."

Thus while Dozey need not have expressly conveyed the acceptance of the offer, and the offer becomes binding on Cindy, the question now is when does Cindy's withdrawal get effect with regard to the offer as against Dozey. The general rule is that unilateral contracts cannot be revoked. Therefore Cindy is bound to pay.

Would it make any difference if Cindy had purported to withdraw the offer while Dozey was still searching for Toby?

The offer can be terminated by the offeror revoking it and effectively communicating the revocation, or the offeree by conduct rejects the offer, or there was too much lapse of time. Some conditional offers can be withdrawn, and some may be bad in law. In this case there are three things: 1) Unilateral offer was made by advertisement, 2) the acceptor of the offer signifies his acceptance by searching and finding the cat, 3) He then proceeds to deliver the cat at which point the offer and acceptance and thus performance becomes complete. As between this while it has been shown that revocation of an offer can occur before its acceptance, the fact that Dozey stated search for the cat is acceptance. The advertisement offer has been acted upon.

The question is if at this stage Cindy's revocation has any effect. The answer would depend on the way the revocation was done. Assuming that Cindy inserted another advertisement the next day or thereafter before Dozey found the cat, then Cindy would have effectively revoked her offer. That is because the advertisement for the lost cat given in the medium which was acted upon carries with it the surmise that the revocation in the same medium would be effective. In the case suppose that the cat came home on its own and Cindy to avoid persons from searching for her cat did give an advertisement o its return, would automatically end her offer. This would thus not create any obligation to Dozey though he had put in efforts and compiled with the offer.

Thus the rule in Dickinson v Dodds would have made the revocation complete. However, generally the contract especially a unilateral contract cannot be revoked when the opposite party begins acting on it. This rule was set out by Lord Denning in Errington v Wood [1952]

as: "The father's promise was a unilateral contract -- a promise of the house in return for their set of paying the instalments. It could not be revoked by him once the couple entered on performance of the act, but it would cease to bind him if they left it incomplete and unperformed, which they have done."

Thus as long as the offeree continues to do what was stipulated by the offeror, the contract or offer cannot be revoked.

There have been different views on this. There is a view by Lord Justice Goff in Dahlia Ltd. v Four Millbank Nominees Ltd. & Anr [1977]