Several distinctly different patterns are found in the approach of modern legal systems to the problems of whether an offeror is free to revoke his offer before acceptance and of when an acceptance is effective to form a contract.
A takeover with many conditions, particularly a due-diligence condition, signals that an offeror is waiting to negotiate with the target.
The rule that the acceptance is effective upon dispatch creates a situation in which the offeror who wishes to revoke his offer is uncertain whether or not he can still do so, since his revocation is not effective until receipt, whereas the offeree's acceptance, if one is made, takes effect on dispatch.
The formal statement said he had no authorisation from the board to talk with "the potential offeror" and had failed to disclose a possible interest in the outcome of these talks.
(Recall that the Restatement's definition of offer refers not to the offeror's actual state of mind but rather to manifestations that "justify another person in understanding" that assent is invited).
This uncertainty makes the consequences of an attempted revocation unpredictable and thereby inhibits an offeror who might otherwise seek to revoke.
In the German view, an offer binds the offeror for any stipulated period or, when the offer is silent as to time, for a reasonable period unless the offeror has expressly made the offer revocable.
"The board of Brit Insurance reviewed this proposal and concluded that it significantly undervalues the group and has accordingly advised the potential offeror that it does not represent a basis on which the board is prepared to engage in any further discussions".
In German law the acceptance takes effect when it reaches the offeror, in the sense that he either knows or can learn of it.
In their joint statement the companies said: "In relation to the proposed transaction, no decision has yet been taken as to whether 888 would be an offeror or offeree company in respect of certain of the steps that may be taken in order to implement the proposed transaction".
In a joint statement, the companies said: "In relation to the proposed transaction, no decision has yet been taken as to whether 888 would be an offeror or offeree company in respect of certain of the steps that may be taken in order to implement the proposed transaction".
