Livingstone v. Evans
Supreme Court of
 4 D.L.R. 769.
Facts: The defendantís agent wrote to the plaintiff and offered to sell some land.† The plaintiff wired the defendantís agent and said heíd take it at a lower price.† The defendantís agent wired back and said he couldnít 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 defendantís agentís 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 defendantís agent hadnít 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 defendantís 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.