Apparent Exception. The apparent exception to this rule in the law of guaranty, holding that an offer to guarantee future advances to be made or credit to be extended to a third person, does not become a contract by the making of the advances or extending of the credit, without notice of acceptance by the principal to the guarantor, is indefensible in principle unless it be considered that there is in the offer an implied condition that notice be given with due diligence, so that the guarantor may be on his guard to protect himself as against the principal.

When we pass from offers of a promise for an act to offers of a promise for a promise, we reach a situation where it is always necessary that the acceptance be communicated to the offeror in order to create a contract. If the offeree gives such notice in the mode indicated by the offer, it is a sufficient communication, whether actually received by the offeror or not. The case of acceptance by post or telegraph is a common example of "communication" without actual notice.

§ 12. Offer and Acceptance by Mail. An offer made by the delivery of a letter to the post office for transmission, remains open until the letter is delivered to the offeree and for a reasonable time thereafter. The postoffice is the offeror's agent and delays in delivery are at his risk. Thus, in a leading English case, one Lindsell offered to sell wool to Adams, by letter dated September 2, 1817, and asking answer "in course of post". He misdirected the letter so that Adams did not receive it until September 5. Adams posted a letter of acceptance on the evening of that day, but Lindsell meanwhile had sold the wool. Adams sued for breach of contract. It was held that the contract became binding when the letter of acceptance was posted.20 The fact that the letter of acceptance is lost or delayed in transmission does not render the contract any the less binding from the moment of its posting. Of course, the offeror, if he chooses, may make the formation of the contract dependent upon the receipt of the answer, and care20 Adams v. Lindsell, 1 B. & Aid. 681, 106 Eng. Rep. Reprint 250.

ful business men frequently make such a condition a part of every offer.

The offeror, in the absence of express directions pointing out some other mode of acceptance, impliedly authorizes acceptance by post whenever the post is used to make the offer or when, under all the circumstances, the post would be the ordinary, usual, and customary means of communication. In a leading English case, H who lived in a suburb of Liverpool, called at a real estate office in Liverpool and there received a written offer for his property. On the next day, before one o'clock, a letter was mailed to H withdrawing the offer, but which did not reach H until after 5 P. M. In the meantime, at 3:50 P. M., H had placed in the postoffice a letter accepting the offer. It was held that the contract became binding when H's letter was mailed and that, under the circumstances, this was the ordinary, usual, and customary means of communication and acceptance.21 The deposit of a letter of acceptance in a street letter box is equivalent to deposit in the postoffice, but, of course, it must be properly stamped and addressed. Offer and acceptance by telegraph are governed by the same rule.22

§ 13. Implied Terms in Offer and Acceptance. Express contracts, whether written or oral, usually contain some terms both of offer and acceptance, which are implied from the customs and usages of business. Business men are in too much of a hurry to write out or expressly state every detail of each contract and, unless expressly provided to the contrary, the customs and usages of the particular business or calling are as truly a part of the agreement as if expressly contained therein. An illustration of a commercial usage is the warranty of seaworthiness which is impliedly included in a contract of marine insurance, though not specially mentioned. Where a theatrical manager sued the owner of a theater for damages for breach of a contract of employment "at a weekly salary 21 Henthorn v. Fraser, (1892) 2 Ch. 27, 61 L. J. Ch. 373.

22 Minnesota Linseed Oil Co. v. Lead Co., 4 Dill. 431, Fed. Cas. No. 9,635.

of forty dollars per week", it was held that a custom of the theatrical business that managers were paid only during the theatrical season from September to June, was properly a part of the contract.23 Such usages and customs do not change the contract of the parties, but are parts of it and evidence concerning them is necessary to show the true contract. Offers in a particular line include these implied customs and usages, and acceptance must be with reference to them. For the implied elements in contracts of sales, contracts of agency, and other particular contracts, the articles on these subjects should be examined.

§ 14. Acceptance Makes Contract Irrevocable. A mere offer, when not made by an instrument under seal, binds no one, but when once duly accepted, the offer is changed to an irrevocable promise. Before acceptance, the offer may lapse or be revoked by the offeror, provided actual notice of the revocation is given to the offeree.

§ 15. Revocation of Offer. An offer may be revoked before acceptance, even though it specifies a definite time for acceptance.24 Thus, where A offers his house to B for a certain sum, stating that the offer will remain open for one week, he may revoke the offer during the week and sell the property to C, provided B is informed of the revocation before he accepts the offer. A could not revoke his offer, however, if he made it by an instrument under seal, or if B had furnished a consideration for A's offer, thus making it an option to purchase at the price named, within one week.

Since the post is the agent of the offeror and revocation must be by the offeror, it follows that a revocation, like an offer, is not effective until actual notice is received by the offeree. Thus, where one sends an offer by letter from Denver to New York on January 1, asking for reply by telegram, the contract becomes binding when acceptance is telegraphed on January 5, even though on January 2 the offeror posted a letter of revocation which was 23 Leavitt v. Kennicott, 157 Ill. 235, 41 N. E. 737.

24 Idem, footnote 17.

not received by the offeree until January 6. In such case the revocation should be by telegram, so as to reach the offeree before the offer could be accepted. An offeree who has notice that the offer has been revoked, cannot thereafter accept, even though the notice be received from a third person not an agent of the offeror.

Where the offer is to the public, it may be revoked before acceptance in the same manner that it was made. In a leading case, the government had, by a published proclamation, offered a reward for information which would lead to the arrest of a certain criminal. The plaintiff gave the information after the offer had been withdrawn by the same kind of notice, but without knowledge of the revocation. It was held that there was no contract and that, therefore, the plaintiff could not recover.25

§ 16. Lapse of Offer. An offer may lapse by the expiration of the time specified for acceptance in the offer. Acceptance after the time specified will have no effect. Or, if no time for acceptance is specified in the offer, it will lapse after what is a reasonable time under the circumstances. Thus, an offer to buy or sell land would not require so prompt an acceptance as an offer to buy or sell property of a perishable character or fluctuating value.

An offer may also lapse by a rejection or refusal of the offer, or by a conditional acceptance or in terms varying from those of the offer. Thus it was held by the Supreme Court of the United States that an offer to sell 2,000 to 5,000 tons of rails was rejected and, therefore, lapsed upon the offeree's replying, "Send me 1,200 tons as per your offer," and could not be revived by his later telegraphing, "Send me 2,000 tons."'26 The court said:

"A proposal to accept, or an acceptance, upon terms varying from those offered, is a rejection of the offer, and puts an end to the negotiation, unless the party who made the original offer renews it, or assents to the modification suggested."

25 Shuey v. United States, 92 U. S. 73, 23 L. ed. 697.

26 Idem, footnote 17.

Death or insanity of either party before acceptance, will terminate the offer. This is true even though the acceptance were sent in ignorance of the death or insanity of the offeror. But in cases of offers which may be accepted by post or by an act, the death of the offeror after acceptance, in the manner indicated, will not avoid the binding effect of the contract. The dissolution of a partnership which has made or received an offer, the destruction of the subject matter of the contract, or the bankruptcy of the offeror, causing the transfer of the subject matter of the contract to a trustee, are other situations where an offer may lapse before acceptance by the offeree.

§17. Time and Place of Contract. A contract dates from the acceptance and is made at the place where the acceptance is given.