Counter-offer CASES
In English law, a counter-offer occurs when an offeree responds to an offer by proposing altered terms, effectively rejecting the original offer and substituting it with a new one.
Definition and Principles
A counter offer terminates the initial offer, shifting roles—original offeree becomes the offeror, and the original offeror can choose to accept, reject, or counter the new offer.
Legal Implications
- Original offer is no longer valid after a counter offer.
- Acceptance must match the terms exactly; otherwise, it constitutes a new counter offer (mirror image rule).
Practical Example
If a buyer responds to a seller’s price offer with a lower price, this is a counter offer, terminating the original offer and creating a new offer open for acceptance or rejection.
Practical Importance
Recognising counter offers helps parties maintain clarity in negotiations, ensuring they are aware when original offers are terminated and when new proposals arise.
Home » Counter-offer
A seller offered iron for sale. The potential buyer replied with an inquiry about payment terms. The seller sold to a third party, but the original buyer then accepted the offer. The court held the inquiry was a request for information, not a counter-offer, so a binding contract existed. Facts The defendant, McLean, offered to sell warrants for iron to the plaintiffs, Stevenson, Jaques & Co., for ’40s. per ton, net cash,’ specifying the offer was open ’till Monday.’ On Monday morning, the plaintiffs sent a telegram to the defendant asking: ‘Please wire whether you would accept forty for delivery
An owner offered to sell a farm for £1,000. The claimant offered £950, which was rejected. The claimant then tried to accept the original £1,000 offer. The court held that the counter-offer had terminated the original offer, so no contract existed. Facts The case concerned a negotiation for the sale of a farm. The defendant, Mr Wrench, offered to sell his farm to the claimant, Mr Hyde, for £1,000. This offer was made on 6th June. In response, on 8th June, the claimant made a counter-offer to purchase the farm for £950. The defendant took time to consider this counter-offer
In a 'battle of the forms', a seller offered a machine tool with a price variation clause. The buyer replied with their own terms, lacking the clause. The seller returned the buyer's tear-off acknowledgement slip, which was deemed acceptance of the buyer's counter-offer. Facts On 23 May 1969, the sellers, Butler Machine Tool Co Ltd, offered to sell a machine tool to Ex-Cell-O Corporation for £75,535. The offer was made on Butler’s standard terms and conditions, which were printed on the reverse of the quotation. These terms included a price variation clause, allowing the price to be increased if there
Facts Brogden & Sons had a long-standing informal business relationship supplying coal to the Metropolitan Railway Company. To formalise their arrangement, the parties decided to create a written contract. The railway company’s agent drafted the terms and sent the document to Brogden for consideration. Brogden’s agent made some minor alterations to the draft, notably inserting the name of an arbitrator to resolve any future disputes. He then signed the document, marked it as ‘approved’, and returned it to the railway company’s agent. The railway company’s agent simply placed the document in his desk drawer and never formally communicated his acceptance
