Counter-offers and the rejection of an original offer
On Monday Rhys emails Ola offering to sell her his vintage campervan for £18,000, adding: 'This offer is open until Friday.' On Wednesday Ola replies: 'I will pay £16,500 for it.' Rhys replies the same day: 'No, sorry.' On Thursday Ola emails: 'Fine, I accept your offer at £18,000.' Rhys has meanwhile decided to keep the campervan and refuses to sell.
Which of the following best describes the legal position?
Choose one answer to see the reasoning.
Worked answer
Correct answer D: There is no contract: Ola's counter-offer rejected Rhys's offer, so her Thursday email was a fresh offer, which Rhys may refuse.
THE RULE TO REMEMBER
A counter-offer rejects and destroys the original offer, which cannot then be accepted.
Counter-offers and the rejection of an original offer
A counter-offer operates as a rejection of the original offer, which cannot afterwards be revived by a purported acceptance (Hyde v Wrench (1840)). Ola's Wednesday email proposed a new price and so was a counter-offer. Rhys's original offer was destroyed, and Ola's Thursday email can only be a new offer, which Rhys may decline.
Why A is wrong: A promise to keep an offer open is not binding without consideration, and in any event the counter-offer ended the offer.
Why B is wrong: Rhys expressly rejected the £16,500 counter-offer, so there was nothing to accept at that price.
Why C is wrong: 'I will pay £16,500' is a firm proposal of new terms, not a mere enquiry about whether Rhys would accept less.
Why E is wrong: The timing of email acceptance is irrelevant here, because there was no subsisting offer to accept.
That's today's practice done. Another featured question tomorrow.
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