Business Law Essay

The issue which arises in the given situation is whether the revocation of offer by post of Peter Pan is effective as against Captain Hook.

Section 2(h) of the Contracts Act 1950 defines contract as an agreement enforceable by law. In order for an agreement to be enforceable by law, it must consist of 6 essential elements which are offer, acceptance, intention to create legal relation, consideration, certainly and capacity. Offer is defined in Section 2(a) of the Contracts Act as something which is capable of being converted into an agreement by its acceptance. Section 5(1) Contracts Act stated that a revocation of proposal may be revoked at any times before the communication of its acceptance is complete as against the proposer, but not afterwards. Section 6 Contracts Act also stated that a proposal can be revoked by the communication of notice of revocation by the proposer to the other party. However, in order for the revocation of the proposal to be effective, it must be communicated by the proposer to the other before it accepts. Besides that, in the event of acceptance by post or telegram, the acceptance is complete as against the proposer upon posting or delivery of the telegram.

In the case of Byrne v. Tienhoven, defendant posted an offer letter to plaintiff on 1 October. On 8 October, defendant posted a letter revoking the offer. On 11 October, plaintiff received the letter of offer and sent acceptance by telegram on the same day. However, only on 20 October did the defendant's letter of revocation was received by plaintiff. The court held that there is a contract between the parties and the revocation of the offer posted on 8 October had no longer effective until 20 October when it was received by the plaintiff. But in the meantime, the letter had already accepted the offer on 11 October when the telegram was sent.

In the given situation, Peter Pan posted an offer letter to Captain Hook offering to sell his house on 21st of April, but he changes his mind the next day after he posted the offering letter and wrote a revocation letter to Captain Hook for reject the offering. However, the offer letter was received by Captain Hook on 25th of April, and he sent his acceptance by post on the next day immediately. Only on 30th of April Captain Hook received the revocation letter and Peter Pan had sold his house to Tinker Bell in the meantime. According to Section 6 Contracts Act, the acceptance by post of Captain Hook on 26th of April is complete once upon posting of the letter. Although he had received the revocation letter on 30th of April, the acceptance is still effective because the revocation letter of Peter Pan posted on 22nd of April was not effective till 30th of April when it was received by Captain Hook.

In conclusion, the revocation of offer by Peter Pan is not affective as against Captain Hook and there is a contract between them.