Tinn v Hoffman & Co [1873] 29 LT 271

📌 Facts

Hoffman & Co wrote to Tinn offering to sell him 800 tons of iron at 69 shillings per ton. The letter requested a reply by return of post. However, before Tinn received Hoffman’s letter, Tinn had independently written to Hoffman offering to buy the same quantity of iron at the same price. The two letters therefore crossed in the post.

Although both parties appeared willing to contract on identical terms, neither letter had been written in response to the other. Each party was unaware of the other’s offer at the time their own letter was sent. Tinn later argued that the matching letters created a binding contract because the parties had agreed on the same subject matter, quantity and price. Hoffman denied that a contract had been formed.

📌 Issue

The issue was whether two identical offers, made independently and without knowledge of each other, could amount to an offer and acceptance. The court therefore had to determine whether the cross-offers created a binding contract.

📌 Decision

The court held that no contract had been formed. Although the offers contained substantially the same terms, neither letter was sent in response to the other. Each party had made an offer, but neither party had accepted the other’s offer.

Blackburn J explained:

“The promise or offer made on each side in ignorance of the promise or offer made on the other side, neither of them can be construed as an acceptance of the other.”

In other words, although there may be some subjective agreement between the parties (i.e. there are two identical offers), there must have also been objective outward indication of the agreement.

Obiter Dictum

One of the most important obiter comments concerns the offeror's ability to specify a method of acceptance.

The court suggested that where an offer asks for acceptance by a particular method, that method will not necessarily be the only valid method unless the offeror makes it clear that no other method will suffice. The court indicated that if an equally advantageous or faster method of communication is used, acceptance may still be effective.

For more information on modes of acceptance, read our Contract Law Questions article here.

📌 Analysis

The case is the leading authority on cross-offers.

It established that:

• two parties may independently make identical offers to one another;

• matching terms alone do not create a contract;

• one party must accept the other party’s offer; and

• a person cannot accept an offer of which they are unaware.

  
  

The decision confirms that a contract requires a clear sequence of offer and acceptance. There must be an objective indication that one party has agreed to the offer made by the other. Blackburn J arrived at the same reasoning in his judgement:

"When a contract is made between two parties, there is a promise by one in consideration of the promise made by the other... But I do not think exchanging offers would, upon principle, be the same thing. The promise or offer made on each side in ignorance of the promise or offer made on the other side, neither of them can be construed as an acceptance of the other."

Cross-Offers

A cross-offer occurs where two parties send identical or substantially similar offers to each other without knowing about the other offer.

For example, A writes to B offering to sell a car for £5,000. At the same time, B writes to A offering to buy the same car for £5,000. Even though the terms match, there is no contract because neither letter accepts the other. One party must subsequently communicate acceptance before a binding agreement is formed.

Knowledge of the Offer

The case also illustrates the principle that a person must know about an offer before they can accept it. Tinn’s letter could not amount to acceptance because it was written before he received Hoffman’s offer. It was therefore an independent offer rather than a response demonstrating agreement.

In an American case (Fitch v Snedaker (1868)) that was heard at a similar time to the Tinn v Hoffman judgement, Woodruff J asked:

"How can there be consent or assent to that of which the party has never heard?"

In other words, although there may be some kind of unanimity of mind in the case, there is no communication in the form of a transmission which conveys the idea of some agreement between the parties. There is no conjoining of each party's willingness to enter into the contract.

Saved by the Postal Rule?

Students often wonder whether the postal rule could have saved the claimant's case. The answer is no.

The postal rule provides that acceptance takes effect when it is properly posted, even if it has not yet been received.

However, the rule only applies where there is already:

• A valid offer; and

• A letter intended as an acceptance.

In this case, neither letter was an acceptance. Both letters were offers. Since the postal rule only affects the timing of an acceptance, it could not transform an offer into an acceptance.

You can read more on the postal rule here.

Not a Counter-Offer

Students often study Tinn v Hoffman and Hyde v Wrench [1840] together because both concern situations where acceptance is absent.

In Hyde v Wrench [1840], the court held that a counter-offer amounts to a rejection of the original offer. However, in Tinn v Hoffman, the issue was that matching offers sent simultaneously do not create a contract. By way of a comparison:

Hyde v Wrench	Tinn v Hoffman
Counter offer made	Cross offers made
Original offer rejected	No acceptance communicated
No contract formed	No contract formed
Parties aware of communications	Parties unaware of communications

Further Reading

• Offer and Acceptance Revision Sheet

• Hyde v Wrench Case Summary

• What is the Postal Rule and How Does it Apply?

• What is a Mode of Acceptance in Contract Law?