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Corbin on Contracts

Copyright 2007, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

CHAPTER 3 ACCEPTANCE AND REJECTION OF OFFER

1-3 Corbin on Contracts § 3.40

§ 3.40 Inquiries and Separate Offers Distinguished From Counter-Offers

Just as ''requests'' and ''suggestions'' do not turn an otherwise absolute acceptance into a conditional one, so too they do not constitute counter-offers. One reason for this is that they are not themselves offers of any kind. The offeree writes: ''Is this your lowest price?''; or ''If I doubled the amount, I suppose you would make the price lower'';n1 or ''You may send me 800 tons as offered by you, but I trust that you will make it 1200 tons at 68 shillings'';n2 or ''would you consider a structured settlement with a different payment arrangement?''n3 Most important, there is no rejection of the offer. In these cases, there is no counter-offer. Most importantly, there is no implicit rejection of the offer. In the first two there is a mere request for information as to possible lower prices, no power of acceptance being created in the original offeror. They do not affect the power to accept the offer previously made. In the third case, there is a valid acceptance of the offer of 800 tons. The contract thereby consummated is not affected by the fact that the acceptor makes an additional offer to buy 400 more tons at 68 shillings if the seller will accept settlement at that rate for the first 800 tons also.

An offer is not a ''counter-offer'' if it is so expressed as to show that it deals with a different subject matter, so that the contract that is proposed is not a substitute for the one proposed by the prior offer. A offers to sell Blackacre to B, and the latter replies, ''I am considering your offer; meantime I offer to sell Whiteacre to you for $5,000.'' B has made no counter-offer, as that term is used by the courts and in this treatise. The same would be true if B had replied, ''I accept your offer of Blackacre. I now offer to sell it back to you, along with my adjoining farm Whiteacre, for the sum of $10,000.''

An expression by the seller of a machine of a willingness and intention to make delivery a short time earlier than that fixed in the contract is not a ''counter-offer.''n4

Legal Topics:

For related research and practice materials, see the following legal topics:

Contracts LawFormationOffersGeneral OverviewContracts LawFormationCounteroffersContracts LawFormationAcceptanceGeneral OverviewContracts LawFormationOffersRejections

FOOTNOTES:

(n1)Footnote 1.

Conn. -This section is cited in Jaybe Constr. Co. v. Beco, Inc., 3 Conn.Cir. 406, 216 A.2d 208 (1965) , in holding that an expression of hope that defendant would reduce its price was not a counter-offer.

Va. - First Nat. Exchange Bank of Roanoke v. Roanoke Oil Co., 169 Va. 99, 192 S.E. 764 (1938) , inquiry as to a possible better offer.

Eng. - Stevenson, Jaques, & Co. v. McLean, 5 Q.B. 346 (1880) , offeree inquired whether the seller would allow a period of credit.

''A mere inquiry as to the terms of the proposal, or a request to modify or change the offer, does not have the effect of rejecting the offer, and, if the offer has not been revoked, a party may accept it, although he previously asked the proposer to modify it.'' Johnson v. Federal Union Surety Co., 187 Mich. 454, 153 N.W. 788 (1915) .

The authority of an agent to sell land at $7,000 an acre is not revoked by his submitting an offer by a buyer at $5,000 an acre. ''We are referred to cases which hold that, in order to establish a contract, an offer must be accepted as made, and that a counter offer is a rejection. But plainly those cases have no pertinency here. The defendant made no offer to sell the land to the plaintiff. What he offered to do was to employ the plaintiff as a broker, and that offer was accepted and the contract of employment became complete when the plaintiff undertook to act as broker, and to use his best efforts to find a buyer.'' Martin v. Crumb, 216 N.Y. 500, 111 N.E. 62 (1916) .

(n2)Footnote 2. See Tinn v. Hoffmann & Co., 29 L.T.R. (N.S.) 271 (1873).

(n3)Footnote 3. King v. Travelers Ins. Co., 513 So.2d 1023 (Ala.1987) .

(n4)Footnote 4. Nelson Equipment Co. v. Harner, 191 Or. 359, 230 P.2d 188, 24 A.L.R.2d 999 (1951) .