RAMSGATE VICTORIA HOTEL v MONTEFIORE
Offers will expire at the end of the time stated for the lapse (if it’s actually said) or after a reasonable time passes.
Ramsgate Victoria Hotel v Montefiore (1866) LR 1 Exch 109
In June, the defendant made an offer to buy shares in the plaintiff’s company. However, he did not hear back from them. Later, the plaintiffs decided to divide the shares of the company between people who had an interest in it in November, and claimed to accept the defendant’s offer. At that point, however, the defendant did not want to through with the deal.
The court said that, although the offer had not been formally withdrawn, it would expire after "a reasonable period of time". Given the ever-changing nature of the subject matter, the time interval had gone beyond what was reasonable.
Ramsgate applies to many cases which deal with lapse of offers. The nature of the goods is critical in applying this case. Stock shares fluctuate in price within seconds, and so it would be incredibly unreasonable to assume that an offer for shares of a volatile stock would remain valid for days or weeks. If the goods were say furniture, the offer could remain open longer than what would be expected for electronic goods.
Furthermore, Benjamin is stipulating by when acceptance must take place. This would suggest the offer is only open for a week so that Angela could think about it and the offer will lapse after this time. The leading case on this point is Ramsgate Victoria Hotel Co. v Montefiore (1866) LR 1 Ex 109 in which the courts said even if an offer which has not been formally withdrawn, would expire after “a reasonable time”. In this case, the offer was for the sale of shares and the court felt six months was beyond what was reasonable. So if Angela does not accept the offer before next Friday, it will expire and will be incapable of being accepted.