Story Case

Silas Defor offered his fast trotting horse to Hohn Hostetter for $250. Hostetter was a notorious horse trader and tried to secure a better bargain. Defor said:

"I won't take a cent less than $225".

Then Hostetter said:

"I'll give you $215".

Defor refused to take this price and prepared to leave. Hostetter then said:

"All right, I'll give you $225".

But Defor would not then accept that price and refused to negotiate with Hostetter further. Hostetter brought suit on the ground that Defor broke his promise to sell for $225.

Defor defended the suit on the ground that the offer of $225 was terminated by the counter offer of $215 which Hostetter made. Do you think that the defense is sufficient?

Ruling Court Case. Hyde Vs. Wrench, Volume 3 Beavan's English Reports, Page 334

Wrench, desirous of disposing of an estate by him owned, offered to sell it to Hyde for 1,200 pounds. Hyde -declined to accept the offer, claiming the price asked for the estate was too high. Thereupon, Wrench stated by letter that he would make one more offer, from which he would not withdraw; that this offer was to sell the estate for 1,000 pounds; and he demanded a return reply. When he received this offer, Hyde sent back the proposition that he would give 950 for the estate. Wrench refused absolutely to accept 950 pounds. Then Hyde wrote that he would accept the offer at 1,000 pounds; this, Wrench refused to consider. In the meantime, he sold the estate to another person. Hyde, thereupon, brought this action for damages.

Wrench contended that no contract ever resulted; that when he made his offer of 1,000 pounds, and Hyde replied that he would give 950 pounds, this was a new offer, and his original offer was gone.

The Master of the Rolls said in part: "Under the circumstances stated, I think there exists no valid binding contract between the parties for the purchase of property. Wrench offered to sell it for 1,000 pounds, and if that had been at once unconditionally accepted, there would have been a perfect binding contract ; instead of that, Hyde makes an offer of his own, to purchase the property for 950 pounds, and he thereby rejected the offer previously made by Wrench. I think that it was not afterwards competent for him to revive the proposal of Wrench by tendering an acceptance of it; and, that, therefore, there exists no obligation of any sort between the parties".

Accordingly, judgment was given for the defendant, Wrench.

Ruling Law. Story Case Answer

A conditional acceptance operates as a rejection of the offer. It is well to analyze a case and see what the reason for this result is. Suppose that A says to B: "I will sell you my watch for $50." To this B replies: "I will give you $40." B has not expressly rejected the offer made by A, but by implication he has. He virtually says: "I reject your offer of $50, and will make you an offer of $40." Thus, a so-called conditional offer is two things: It is, in the first place, a rejection of the offer made; and in the second place, is the making of a new offer on different terms. This is what happened in the Story Case; Defor made an offer to sell for $225; Hostetter apparently rejected that offer, and made a new offer of $215. Of course, this new offer does not impose any obligation upon Defor unless he accepts it. Thus, the defense of Defor is good and sufficient.