BetterLawNotes-5 (2)

CONTRACT LAW

An offer will come to an end where the offeree responds by making his own offer, what is called a ‘counter-offer’.

Hyde v Wrench (1840) 3 Beav 334

W offered to sell a farm to H for £1,000. H replied that he would pay £950. W refused. H then agreed to pay £1,000 but W refused to sell. The Court of Chancery/Lord Langdale MR held that by making an offer of his own, H had rejected W’s earlier offer. As H could not revive W’s offer by tendering an acceptance, there was no contract.

Note that a purported acceptance which contains new material terms will generally be treated as a counter-offer. It follows that no contract will come into being at that point and the original offer will no longer be open for acceptance. It is important to distinguish between a counter-offer and a request for more information about the terms of the original offer. Such a request is not a counter-offer and will leave the offer ‘alive’ for acceptance.

Stevenson Jacques & Co v McLean (1880) 5 QBD 346

S offered to sell a quantity of iron to B at 40s. per ton saying he would keep the offer open until the following Monday. S knew that B would only accept the offer if B could in turn find a buyer for the iron. Early on the Monday, at 9.42 am, B sent a telegram to S and asked ‘Please wire whether you would accept forty for delivery over two months, or if not, longest limit you would give.’ S sent no response but at 1.25 pm sent a telegram to B saying he had sold the iron to a third party. Before receiving this telegram B, at 1.34 pm, sent a telegram purporting to accept S’s original offer. Lush J held that B’s telegram at 9.42 am contained nothing specific by way of offer or rejection but was a mere inquiry. Consequently, the offer was still open when B accepted it at 1.34 pm.

Pickfords Ltd v Celestica Ltd [2003] EWCA Civ 1741

P offered to undertake the relocation of C’s business equipment to new premises, quoting a rate per vehicle load with various extras. Two weeks later, P submitted a fixed price offer. C purported to accept the first offer. P subsequently carried out the relocation of C’s equipment. The Court of Appeal held that on the facts, P’s first offer had been revoked by its second offer. It followed that P’s first offer was not capable of acceptance when C purported to do so. C’s ‘acceptance’ amounted to a counter-offer which was accepted by P’s conduct in undertaking the relocation of the equipment. There was therefore a contract based on the ‘per vehicle’ rate.

Notwithstanding the decision in Pickfords, it would seem that in principle an offeror may make two or more offers any one of which will remain capable of acceptance and that a later offer will not necessarily revoke an earlier one.

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