Hyde v Wrench [1840] 49 ER 132 is a leading authority on the effect of counter-offers in English contract law. The general principle derived from this case is that a counter-offer effectively destroys an original offer, meaning it can no longer be accepted.

Facts of the Case

The claimant, Hyde, sued for specific performance of a contract for the sale of a farm. The defendant, Wrench, initially offered to sell the farm for £1,000. Hyde replied that he would purchase it for £950. Wrench took a few days to consider this before declining it. Hyde then immediately wrote back purporting to accept the original offer of £1,000. Wrench did not respond, and Hyde argued that, because the original offer had not been formally withdrawn, a binding contract had been formed.

Legal Issues

The central question was whether a valid contract had been formed through offer and acceptance — specifically, the legal effect of Hyde’s proposal to pay £950 on Wrench’s original offer of £1,000, and whether that original offer remained open after Hyde had suggested a different price.

Judgement

Lord Langdale MR held that no contract had been created. Hyde’s communication to buy for £950 was not an acceptance but a counter-offer, with the same legal effect as a rejection of the original offer. Because the counter-offer nullified the original offer, it no longer stood open and Hyde could not later revive and accept it; it was not “competent” for him to revive the proposal by subsequently tendering an acceptance.

Authority

Hyde v Wrench is the leading authority for the principle that a counter-offer kills the original offer. Once an offeree rejects an offer — including by making a counter-offer — they cannot change their mind and accept it; the original offer is “dead” and cannot become a contract without a fresh offer.

Related Discussion and Commentary

  • Acceptance vs. counter-offer: a valid acceptance must be a simple assent to the terms without deviation; a response that deviates (such as offering £50 less) is a counter-offer.
  • Requests for information: a counter-offer must be distinguished from a request for further information — asking whether a price includes delivery does not “kill” the offer, whereas proposing a different price does.
  • The “battle of the forms”: these principles are still used to resolve modern disputes such as in Butler Machine Tool Co. Ltd v Ex-Cell-O Corporation, where the court identifies the final counter-offer that was accepted.
  • Criticisms and rationale: the approach provides certainty, though some (such as Lord Denning MR) argue it is out of date for modern commerce; a counter-offer implicitly shows the offeree is unwilling to meet the original terms, justifying closure of that offer.