Livingstone v. Evans
4 D.L.R. 769 (Alta. T.D. 1925)
Evans' agent wrote to
Livingstone and offered to sell some land in Canada. Livingstone wired
Evans' agent and said he'd take it at a lower price. Evans' agent wired
back and said he couldn't lower the price. At the same time, the Evans
sold the land to someone else. Then Livingstone wired to accept the offer,
but it was too late, Evans had already sold it.
Livingstone sued to get the
sale to the other guy nullified and to force Evans to sell him the land
(aka he wanted specific performance).
Livingstone argued that
Evans original offer was never
terminated, and only the counteroffer was rejected.
Evans argued that when he
rejected Livingstone's counteroffer,
that also rescinded the original offer.
The case of Hyde v.
Wrench established the principle
that the making of a counteroffer is a rejection of the
The Canadian Court found for
The Court found that if
Evans' agent hadn't sent the message about not being able to lower the
price, there would be no question that there was no contract because the
general rule is that a counteroffer
is a rejection of the original offer.
However, the Court found
that the specific wording of the message from the Evans' agent was not
just a rejection of the counteroffer
but also a renewal of the
So as far as Livingstone
knew, the offer was still open
when he accepted at the original price.
The general rule illustrated
by this case is that a counteroffer
usually acts as a rejection of the original offer. However, a rejection of the counteroffer may act as a renewal of the original offer.
Also note that an inquiry is not a counteroffer. But you have to be specific in your wording
or it could be interpreted as a counteroffer.