Livingstone v. Evans
Supreme Court of
[1925] 4 D.L.R. 769.
Facts: The defendant’s agent wrote to the plaintiff and
offered to sell some land. The plaintiff
wired the defendant’s agent and said he’d take it at a lower price. The defendant’s agent wired back and said he
couldn’t lower the price. At the same
time, the defendant sold the land to someone else. Then the plaintiff wired to accept the offer,
but to no avail. The plaintiff sued for specific
performance.
Issue: Did the offer, followed by the counteroffer, the defendant’s
agent’s reply and the subsequent acceptance together constitute a binding contract?
Rule: A counteroffer acts as a rejection of the original
offer. A rejection of the counteroffer may
act as a renewal of the original offer.
Analysis: The court says that if the defendant’s 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 counteroffer was a rejection of
the original offer. However, the court
finds (narrowly) that the message from the defendant’s agent was not merely a
rejection of the counteroffer but also a renewal of the original offer. In that case, as far as the plaintiff knew,
the offer was still open when he accepted at the original price. The court thus finds that a binding contract
was formed.
Conclusion: The court finds that there was a binding contract
between the parties.