Evans wrote to Livingstone proposing to sell a piece of land for $1,800. Livingstone wired in return "Send lowest cash price. Will give $1600 cash. Wire." Evans responded with "Cannot reduce price." Livingstone then wrote to accept the original offer of $1,800. Evans no longer wanted to sell to Livingstone, Livingstone sued for specific performance.
- Was the first telegram from Livingstone a counter-offer?
- If so, did this counter-offer constitute a rejection of Evans' offer and free Evans from it?
Finding for the plaintiff, order of specific performance granted.
Walsh held that under Hyde v Wrench a counter-offer constitutes a rejection, very firmly established. Because of this long standing precedent, Livingstone's first telegram is a counter-offer and an inquiry and would have put an end to Evans' liability under their offer. However Walsh finds that Evans' second telegram, "cannot reduce price" constitutes a renewal of the original offer and Livingstone's acceptance makes it a binding contract.
- A counter-offer constitutes a rejection.
- An offer can be renewed after a counter-offer through ambiguous language.