The issue of a reasonable time is the case's main point. It emphasises that no acceptance after a certain amount of time has passed without being expressed cannot be regarded as valid. The proposal will nevertheless be regarded as having been cancelled if the reasonable time has passed even if the withdrawal is not conveyed before the acceptance is received.

Introduction
When it comes to contracts, time is of the importance. If not accepted until the end of a certain period of time, a proposal or offer may be withdrawn. This precise period may be specified in the proposal or in the actual following agreement. However, if no time frame is established, it does not follow that the proposition or offer is valid indefinitely. The acceptance must be communicated in this situation within a reasonable amount of time. The court will ultimately decide what constitutes a reasonable amount of time.

Background of the Case
The record was withdrawn by consent after Hilary Term in 1865, and the cause was entered for trial at the London sittings after that. The parties also agreed that each action should have a special case prepared for the court's consideration.[1]

Facts
On June 6th, 1864, The Ramsgate Victoria Hotel Company Ltd. was officially registered. According to its prospectus, a deposit of E 1 for each share was required upon application, and a deposit of €4 was required upon allocation. Furthermore, the deposit was to be returned in the event of non-allotment. Montefiore (the defendant in the case) applied for the shares on June 8th, 1864, paying E 50, asking to be given 50 shares in the Ramsgate Victoria Hotel Company Ltd. He received a bankers' acknowledgment receipt for the aforementioned payment.

There were as many as 17 sessions over the course of the following six months, from June to November of 1864. One such meeting was conducted on August 7, 1864, and the Secretary provided the board with a list of all applicants at the time. Later, the Secretary produced a comparable list with the names of the applicants, the number of shares requested, and the number of shares given to them. The Montefiore was listed in each of these lists. He did not, however, receive any notification or response regarding his application or subsequent allocation between the time of his application in June and November 23rd.

Additionally, he did not communicate with or receive any information from the agent, secretary, or even the company's directors. As a result, on November 8th, 1864, Montefiore sent a letter to the Ramsgate Victoria Hotel Company Ltd. retracting his request for the allocation of shares and asking for the return of the deposit. He also declined to sign the company's articles of association and accept any shares that were allotted to him by the company in the aforementioned letter. The Company accordingly received the letter.

Later on November 23, 1864, the Company's directors adopted a resolution mandating a $4 first call for shares that was due upon share allocation. The Secretary's Department also informed Montefiore in a letter that same day that he had been given the 50 shares he had requested and that he needed to pay the first call amount by December 5th, 1864, at the latest.

Montefiore declined to accept the shares and make the initial call payment. The Company then filed a lawsuit against him to recoup the money owed for the initial call. This case was combined with another one whose facts were similar. In that instance as well, the plaintiff, Ramsgate Victoria Hotel Company Ltd., had requested payment from the defendant, Goldsmid, on the initial call. Like Montefiore, Goldsmid had refused to make the required payment. The distinction between the two cases was that Goldsmid, unlike Montefiore, had not withdrawn his application via letter.

Arguments of the Parties
The court had to deal with the question of whether the plaintiff was entitled to any amount and if any, to how much amount.

Plaintiff's Arguments:

• The business is allowed to reclaim the sum owed from the initial call under the current circumstances. There is a legal contract between the business and the aforementioned defendants. They must therefore accept the assigned shares and make the required payment.
• In accordance with the Companies Act of 1862, the lists and registers created and submitted by the Secretary prior to the defendant's notice of withdrawal must be deemed to be a proper register of shares. Therefore, the list created on November 23rd, 1864, cannot be disregarded.
• Despite the fact that the shares weren't distributed until November 23rd, 1864, the allotment took place on that date. Given the circumstances, the defendant had no right to disregard the legally-binding contract that already formed between him and the business.
• In any case, Goldsmid must pay the sum due on the first call since he neither gave the notification to withdraw his request for share allotment nor did he demonstrate any intention of doing so. As a result, the Company is not obligated to return the deposits made by the defendants.

Defendants' Arguments

• The request for allotment was withdrawn long before the directors made their allocation or the defendant received any notification of the allocation, therefore there was no commitment to take the shares, and even if one did, it was not legally binding.
• There was no agreement to accept the share, and even if there had been one, it was not enforceable because the defendant was not notified or allotted the share in a timely manner.
• Before the names of applicants were listed in any document meeting the legal criteria of a company's register, requests were withdrawn.
• The defendants cannot be regarded as members of the Ramsgate Victoria Hotel Company Ltd. for a number of reasons. Therefore, they are not bound by the company's Articles of Association.
• The prospectus's information was taken into account when the request for the allotment was made. The prospectus indicated that the deposit money would be returned in the event of non-allotment. Therefore, the defendants have a right to the refund.

Issue Involved:
The current case is one of the earliest to deal with the idea of withdrawal of an offer due to the passage of a reasonable amount of time. According to the case, an acceptance cannot be considered valid unless it is communicated within a reasonable amount of time. This idea is of the utmost importance and is currently covered by Section 6 Clause 2 of the Indian Contract Act of 1872 as well as British contract law.

The case, however, did not make it clear exactly what constitutes a reasonable time frame. Even after more than 50 years, there is still no definitive answer to this question because it entirely depends on the specific facts and circumstances of each case.

Judgment
In this instance, the Court determined that the Company's attempt to compel the defendants to pay the sum owing on the initial call was ineffective. Because of the passing of time, the defendant's offer or proposal was no longer tenable.

The proposal may be revoked after a set period of time or a reasonable period of time. In this instance, the corporation ought to have conveyed the acceptance in a timely manner given that no fixed period was specified. The proposal expired since the corporation didn't follow through.

The plaintiffs lost the lawsuit. They had the right to receive their deposits returned and were not required to pay any money.

Conclusion
The current case is one of the earliest to deal with the idea of withdrawal of an offer due to the passage of a reasonable amount of time. According to the case, an acceptance cannot be considered valid unless it is communicated within a reasonable amount of time. This idea is of the utmost importance and is currently covered by Section 6 Clause 2 of the Indian Contract Act of 1872 as well as British contract law.

The case, however, did not make it clear exactly what constitutes a reasonable time frame. Even after more than 50 years, there is still no definitive answer to this question because it entirely depends on the specific facts and circumstances of each case.

References:

• https://www.lawteacher.net/cases/ramsgate-hotel-v-montefiore.php
• https://acasestudy.com/caseramsgate-victoria-hotel-v-montefiore/
• https://www.casemine.com/judgement/in/5ac5e2f64a932619d903d216
• https://www.trans-lex.org/922500/_/lapse-of-an-offer/
• https://advance.lexis.com/toc/

End-Notes:

1. Ramsgate Victoria Hotel Co. Ltd. v. Montefiore (1866) LR 1 Exch 109

Written By:

1. Avantika Rawat, BA LLB - University Of Petroleum And Energy Studies, School of Law
2. Devanshi Rana, BA LLB - University Of Petroleum And Energy Studies, School of Law