Garden Removal – Damages; Oral Revocation of a Counteroffer #137
CATEGORY: Legally Speaking
TAGS: Breach of Contract Contract of Purchase and Sale Counter-offers Damages
By Gerry Neely
A Victoria couple's love of their garden led them to take it with them when they moved. Its absence was not noticed at first by the purchasers, who had taken possession on a dreary rainy January day. However when the weather cleared, as it occasionally does in Victoria, the pockmarked shrubless back garden looked more like the roadsides leading to the garbage dump than the award winning English garden featured in the ad which captured their attention.
Since the charm of the cozy cottage they had purchased depended upon the beauty of the garden for its value, the purchasers sued for breach of contract and conversion. Damages were given to the deflowered purchasers for $5,000 for breach of contract and $5,000 for punitive damages.1
* * *
The standard form Contract of Purchase and Sale states that notice of the acceptance of the offer or counter offer is to be given in writing to the other party. Must communication of the revocation of the counter offer also be in writing?
This question arose upon the interpretation of the standard form contract in connection with the purchase of a lot for $550,000. A counter offer to the written offer to purchase was made at the price of $590,000, open for acceptance for three days. Within a few hours of having made the counter offer, the owner accepted a better offer, which was subject to revocation of the counter offer.
The owner was unable to reach her agent until early the next morning. At that point, notice of acceptance of the counter offer had not been received by the owner's agent. The owner asked her agent to advise the purchasers that the counter offer was revoked. The agent telephoned this information to the purchasers who said that they had accepted the counter offer the previous evening by initialling the changes to the offer.
The vendor denied that there was a contract for the sale of the lot, and the purchaser sued for specific performance. The lawyer for the purchaser had to overcome the fact that the owner's agent had given notice of revocation orally to the purchasers before they had communicated their acceptance of the counter offer in writing.
He argued that the course of conduct between the parties could only lead to the conclusion that they had agreed that all communications relating to the offer and counter offer were to be in writing. In support of this argument, he argued that the original offer was in writing as was the counter offer, and that both provided that acceptance had to be in writing. Therefore, oral revocation wasn't sufficient.
The Court disagreed, stating that revocation can be given orally or in writing. If the intention to revoke is clear, and notice of revocation is given before acceptance of the counter offer is communicated to the owner, then the revocation is valid.
The purchasers, lawyer also argued that the counter offer was open for acceptance for another two days. However, the agreement by the vendor to keep the counter offer open for the three day period was not supported by consideration from the purchaser. The vendor had not bound herself by a separate specific contract to keep her offer open, and was therefore free to revoke her counter offer at any time before notice of acceptance of it by the purchaser was received by her.
The separate contract to keep the offer open for three days, could have been created by the addition of the following words to the contract "Purchasers hereby pay $10 to the vendor as consideration for the vendor keeping this counter offer open for acceptance until 5:00 p.m. June 3, 1988".2
|1.||Freeman v. Champagne, SCBC 871193 (Judgment given May 11 1989).|
|2.||Hughes v. Gryratron Developments Ltd., SCBC Vancouver Registry C883072.|
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