Hyde v. Wrench

A seller offered his farm for £1000 and called it his last offer. The buyer first offered £950, was put off, and then tried to accept the £1000. The Rolls Court held that the buyer's own offer had already rejected the seller's offer, so nothing was left to accept.

Quick Revision

Parties

Hyde — plaintiff; the alleged purchaser, who filed a bill for specific performance (a court order to carry out the contract). He acted through an agent.

Wrench — defendant; the owner of the farm, who filed a general demurrer to the bill. He also acted through an agent.

Procedural History

1. The case was heard in the Rolls Court (Chancery) on 8 December 1840, before Lord Langdale, the Master of the Rolls.
2. Hyde filed a bill for specific performance. The judgment reports the bill only "to the effect following".
3. Wrench filed a general demurrer (a legal objection that, even on the facts stated, the claim fails) to the bill.
4. The case came before the Court on that demurrer. The Court allowed the demurrer.

Facts

The facts below are those stated in the bill, as recorded in the judgment.

1. Wrench wished to dispose of an estate. Through his agent, he offered to sell it to Hyde for £1200. Hyde, through his agent, declined.
2. On 6 June, Wrench wrote to his own agent. He noted the refusal of £1200 and said he would make only one more offer, which he would not alter.
3. That offer was £1000, lodged in the bank until Michaelmas. The title was to be made clear, free of expenses, land tax and the like. Wrench expected a reply by return, as he had another application.
4. This letter was forwarded to Hyde's agent. He immediately called on Wrench.
5. Before accepting the offer, Hyde's agent offered £950 for the farm. Wrench wished to have a few days to consider.
6. On 11 June, Wrench wrote to Hyde's agent. He had written to his tenant for answers to certain enquiries. He would communicate with Hyde's agent the instant he received the reply and would try to conclude the prospective purchase. He said he was not treating with any other person.
7. Wrench afterwards promised an answer on the £950 offer on 26 June.
8. On 27 June, Wrench wrote to Hyde's agent. He was sorry he could not feel disposed to accept the offer for his farm at Luddenham at present.
9. Hyde's agent received this letter on 29 June. On the same day he wrote back, acknowledging that Wrench was not disposed to accept £950.
10. In that letter he said he at once agreed to the terms on which Wrench had offered the farm. These were £1000, through Wrench's tenant Mr Kent, by Wrench's letter of 6 June. He asked Wrench to instruct his solicitor to communicate with him about the title without delay.
11. The bill stated that Wrench gave a verbal answer to the last letter. He said he would see his solicitor about it.
12. The bill charged that Wrench's offer for sale had not been withdrawn before it was accepted.

Issues Raised

The judgment does not frame issues in so many words. The questions before the Court, on the demurrer, were as follows.

1. Did a valid, binding contract exist between Hyde and Wrench for the purchase of the farm, on the facts stated in the bill?
2. Did Hyde's offer of £950 reject Wrench's earlier offer of £1000?
3. If it did, could Hyde later revive Wrench's proposal by tendering an acceptance of it?

Arguments Contended

For the defendant (Wrench), in support of the demurrer (Mr Kindersely and Mr Keene):

• To make a valid agreement (a promise or set of promises both sides accept), there must be a simple acceptance of the terms proposed. They relied on Holland v. Eyre (2 Sim. & St. 194).
• Hyde did not accept the alleged proposal to sell for £1000 on 6 June. He rejected it and made a counter proposal.
• That counter proposal put an end to Wrench's offer. Only Hyde's own proposal was left under discussion.
• Hyde's proposal was never accepted. Hyde could not revive Wrench's original proposal without Wrench's agreement.

For the plaintiff (Hyde) (Mr Pemberton and Mr Freeling):

• While Wrench's offer subsisted (remained open), Hyde was free to accept it.
• The bill charges that the offer had not been withdrawn before Hyde accepted it. A valid subsisting contract therefore exists.
• They cited Kennedy v. Lee (3 Mer. 454) and Johnson v. King (2 Bing. 270). The judgment does not say what they stood for.

Court's Reasoning

The judgment is a single opinion by Lord Langdale, the Master of the Rolls. It has no numbered paragraphs, so no paragraph numbers are cited.

Lord Langdale, the Master of the Rolls

1. Held: on the circumstances stated in the bill, no valid binding contract exists between the parties for the purchase of the property.
2. Noted: Wrench offered to sell for £1000. Had that offer been at once unconditionally accepted, there would undoubtedly have been a perfect binding contract.
3. Held: instead of accepting, Hyde made an offer of his own to buy at £950. By doing so, "he thereby rejected the offer previously made by the Defendant."
4. Held: it was not afterwards competent for Hyde to revive Wrench's proposal by tendering an acceptance of it.
5. Held: so there exists no obligation of any sort between the parties. The demurrer must be allowed.

Authorities

The Court did not discuss any case. The judgment records only the cases counsel cited.

• Holland v. Eyre (2 Sim. & St. 194): cited by Wrench's counsel for the need for simple acceptance. The Court did not mention it.
• Kennedy v. Lee (3 Mer. 454): cited by Hyde's counsel. The Court did not mention it.
• Johnson v. King (2 Bing. 270): cited by Hyde's counsel. The Court did not mention it.

Provisions mentioned

• The judgment mentions no Act, section or article.

Judgement

1. The Master of the Rolls held that there was no valid binding contract between the parties.
2. The demurrer was allowed. Hyde's bill for specific performance therefore failed.
3. The judgment records no order on costs and no other direction.

Legal Principle / Ratio

A person who answers an offer by making an offer of his own on different terms rejects the original offer. He cannot afterwards revive it by tendering an acceptance. The key holding is that Hyde "thereby rejected the offer previously made by the Defendant."

Obiter: if Wrench's £1000 offer had been "at once unconditionally accepted", there would undoubtedly have been a perfect binding contract.

Critical Analysis

Analysis based on the judgment text.

• The report is short and has no numbered paragraphs. The Court's reasoning takes only a few sentences.
• The Court did not discuss the cases cited by counsel, and the report does not say what they stood for.
• The bill charged that Wrench's offer was not withdrawn before acceptance. The Court answered that charge by holding that Hyde had already rejected the offer.
• The Court did not say whether the 6 June letter, with its call for a reply by return, had lapsed for any other reason.
• The Court did not discuss whether Hyde's agent was only asking about a lower price. It treated his offer of £950 as an offer of Hyde's own.
• The Court decided on a demurrer, so it worked from the facts as the bill stated them.

Significance

• The case is cited for the rule that a counter proposal rejects the original offer.
• It also shows a plain case where a later "acceptance" of a rejected offer creates no contract.
• The judgment is brief, but its point is complete: an offeree who makes his own offer cannot later accept the first one.

Exam-Important Points

• Rule: an offer of one's own on different terms rejects the original offer. It cannot later be accepted.
• Facts in one line: Wrench offered a farm for £1000. Hyde offered £950, Wrench declined, and Hyde then wrote that he accepted £1000. Held: no contract.
• Procedure: the decision came on a general demurrer to a bill for specific performance.
• Trap: Wrench's 27 June letter refused only the £950 offer. It did not revive the £1000 offer.
• Trap: the Court said an unconditional and immediate acceptance of the £1000 offer would have made a contract.
• Bench: Lord Langdale, the Master of the Rolls. Date: 8 December 1840. Citation: (1840) 49 ER 132.

Prepared from the full text of the judgment. The judgment has no numbered paragraphs. The (1840) 3 Beav 334 citation is not in the judgment text.