Livingstone v. Evans
4 D.L.R. 769 (Alta. T.D. 1925)

  • Evans’ agent wrote to Livingstone and offered to sell some land in Canada. Livingstone wired Evans’ agent and said he’d take it at a lower price. Evans’ agent wired back and said he couldn’t lower the price. At the same time, the Evans sold the land to someone else. Then Livingstone wired to accept the offer, but it was too late, Evans had already sold it.
  • Livingstone sued to get the sale to the other guy nullified and to force Evans to sell him the land (aka he wanted specific performance).
    • Livingstone argued that Evans original offer was never terminated, and only the counteroffer was rejected.
    • Evans argued that when he rejected Livingstone’s counteroffer, that also rescinded the original offer.
      • The case of Hyde v. Wrench established the principle that the making of a counteroffer is a rejection of the original offer.
  • The Canadian Court found for Livingstone.
    • The Court found that if Evans’ 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 general rule is that a counteroffer is a rejection of the original offer.
    • However, the Court found that the specific wording of the message from the Evans’ agent was not just a rejection of the counteroffer but also a renewal of the original offer.
      • So as far as Livingstone knew, the offer was still open when he accepted at the original price.
  • The general rule illustrated by this case is that a counteroffer usually acts as a rejection of the original offer. However, a rejection of the counteroffer may act as a renewal of the original offer.
  • Also note that an inquiry is not a counteroffer. But you have to be specific in your wording or it could be interpreted as a counteroffer.