Hyde v Wrench [1840] 49 ER 132

📌 Facts

The defendant, Mr Wrench, offered to sell the farm he owned to the complainant, Mr Hyde. He offered to sell the property for £1,200, but this was declined by Mr Hyde. The defendant decided to write to the complainant with another offer; this time to sell the farm to him for £1,000. He made it clear that this would be his final offer regarding the property. In response, Mr Hyde offered £950 for the farm in his letter. This was refused by Mr Wrench and he confirmed this with the complainant.

Mr Hyde then agreed to buy the farm for £1,000, which was the sum that had previously been offered.  However, Mr Wrench refused to sell his farm.

📌 Issue

Mr Hyde brought an action for specific performance, claiming that as Mr Wrench refused to sell the farm, this was a breach of contract. The issue in this case was whether there was a valid contract between the parties and if a counter offer was made in discussions, whether the original offer would still remain open.

📌 Decision

The court dismissed the claims and held that there was no binding contract for the farm between Mr Hyde and Mr Wrench. It was stated that when a counter offer is made, this supersedes and destroys the original offer.

Lord Langdale ruled as follows:

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

In other words, the court concluded that a counter-offer is a rejection. This reflects what is often described as the mirror image rule—acceptance must mirror the offer exactly.

📌 Analysis

A counter-offer kills off the original offer. Once a counter-offer has been made, the original offer is no longer available. The case also establishes the doctrine of unequivocal acceptance, which holds that an acceptance must be clear and unqualified to create a binding contract.

The case should, however, be distinguished from Stevenson v Mclean (1880), in which the court found that there was no counter-offer and instead only a mere request for further information.

Commercial Practicality

The decision makes perfect sense - imagine if parties could continually resurrect previously rejected offers. Negotiations could become highly uncertain, with parties never knowing whether a rejected proposal might suddenly be revived weeks or months later.

Protecting Freedom

Once Hyde rejected the £1,000 offer, Wrench was entitled to change his mind. Had Hyde been allowed to revive the original offer unilaterally, Wrench would have remained bound by a proposal that Hyde himself had previously rejected. The court considered this inconsistent with the principle of mutual agreement.

However, some argue that the decision can occasionally favour an offeror who wishes to escape a transaction after learning that the offeree is prepared to pay the original price. Despite this, contract law generally prioritises certainty over flexibility.

Further Reading

• Offer and Acceptance Revision Sheet

• Stevenson v Mclean Case Summary

• What is a Counter-Offer?