CASE BRIEF: HYDE v. WRENCH, [1840]

CASE NAME	Hyde v. Wrench, [1840] EWHC Ch J90
CITATION	3 Bea 334,, 49 ER 132
COURT	Rolls Court
BENCH	Lord Langdale
PETITIONER	Hyde
RESPONDENT	Wrench
DECIDED ON	Decided on 8 December 1840

INTRODUCTION

According to Section 7 of the Indian Contract Act, which stipulates that “in order to convert a proposal into a promise, the acceptance must be absolute and unqualified,” an offer must be accepted unconditionally in order for it to be legally enforceable. When the offer terms are broken, a counteroffer is made, nullifying the offeror’s initial offer to the offeree. When an offer is rejected because the offeree does not comply with all of the terms of the original offer, counter-proposals are made. For instance, “A” writes to “b” stating that he wishes to sell one subject and that the consideration is Rs. 80. Rejecting the offer, “B” offers “A” Rs. 50 to purchase his subject. The term “counter offer” refers to such an offer. When counteroffers are made, the offeror is no longer subject to the conditions of the agreement.

One of the most important cases in the history of contract law is Hyde v. Wrench. By putting up a counteroffer in the event that the initial offer is refused, it addresses the issue of the particular performance of the original offer. In situations where the defendant breaches the contract, the court may grant the plaintiff specific performance, which imposes an obligation on the defendant to carry out the terms and provisions of the agreement. All of the disputes and problems surrounding counteroffers and their relationship to the first offers were resolved by this lawsuit.

FACTS OF THE CASE

Through his agent, Wrench, the defendant attempted to sell Hyde, the plaintiff, his Luddenham estate for £1200, but Hyde turned down the offer. Thus, on June 6, 1840, Defendant offered Plaintiff £1000 for the sale of the estate, promising not to change his offer and to consider another application if the £1000 was not deposited in the bank by Michaelmas until the estate was free of all taxes, expenses, and other charges. However, the plaintiff turned down the defendant’s offer and made an alternative offer of £950.

The defendant gave this counteroffer some thought for a few days. “I have written to my tenant for an answer to certain inquiries, and as soon as I receive his reply, I will correspond with you and endeavor to conclude the prospective purchase of my farm; I assure you I am not treating with any other person regarding said purchase,” he wrote in his letter to the plaintiff.T he plaintiff agreed to buy the estate for a certain sum after the defendant wrote to him on June 27 to say that he would not sell his estate to the defendant because he was unwilling to sell the farm for such a small sum.

“I humbly request that you acknowledge receipt of your letter dated the 27th instant, stating that you are not willing to accept £950 for your farm at Luddenham,” the complainant wrote. This being the case, I immediately accept the terms of your offer of £1000 for the farm through your tenant, Mr. Kent, as stated in your letter dated the 6th instant. You must give your solicitor instructions to get in touch with me very away regarding the title for the reason I stated to you.

Conversely, Wrench declined to sell Hyde the property. Because the defendant’s offer to sell was not withdrawn before it was accepted, even though the defendant responded to the plaintiff’s last letter by saying he would speak with his attorney about the matter, the plaintiff filed a lawsuit against the defendant, claiming specific performance of the contract. The defendant then responded to the plaintiff’s case for particular contract performance with a broad demurrer.

ISSUES RAISED

Does the initial offer become void in the event of a counteroffer, or is the defendant still required to fulfill the offer?
If Wrench, the defendant, has broken the terms of the agreement by declining to sell the property to Hyde, the plaintiff?
Was there a valid contract between Hyde and Wrench?

ARGUMENTS FROM BOTH SIDES

Argument on behalf of the Plaintiff

The plaintiff’s attorneys, Mr. Pemberton and Mr. Freeling said that the plaintiff was competent to accept the defendant’s offer as long as it remained, and the defendant was not surprised because it was not withdrawn before the plaintiff accepted it. They contend that the appellant can accept an offer if it is not retracted.

Argument on behalf of the Defendant

Mr. Kindersely and Mr. Keenee argued on behalf of the defendant that the acceptance must be clear for it to be a legally binding contract. Complete and unqualified approval is required. The following is the content: “The proposed terms must be simply accepted in order for there to be a genuine agreement. Plaintiff rejected the alleged offer to sell for £1000 on June 6th and instead made a counter-proposal, which ended Defendant’s offer and left only Plaintiff’s proposal up for discussion. That proposal has never been accepted, and Plaintiff could not bring Defendant’s original proposal back to life without Defendant’s approval.

JUDGMENT

The court rendered its ruling after taking into account the arguments made by each party. Lord Langdale’s ruling states, “I believe there isn’t a legally binding contract between the parties for the purchase of the property under the circumstances in this bill.” The Plaintiff made his own offer to buy the property for £950, rejecting the Defendant’s initial offer. The Defendant had offered to sell it for £1000, which, if immediately accepted unconditionally, would have unquestionably resulted in a perfectly binding contract. He was subsequently unable to revive the defendant’s proposition by offering an acceptance of it; as a result, there is no commitment of any kind between the parties, and the demurrer must be permitted. As a result, the court rejected the plaintiff’s arguments and decided to favor the defendant. It was decided that Hyde and Wrench had not entered into a legally enforceable agreement, and as a result, the defendant was not bound to carry out the terms of the agreement.

CONCLUSION

It is a well-known legal principle that for an acceptance to be enforceable, it must be unconditional and absolute. A modification to the terms and conditions of the initial offer renders it invalid. Simply put, the offeree can accept or negotiate if the offeror makes an offer to them. The parties have achieved a legally binding agreement when the offeree accepts the offer without negotiating or in an ambiguous manner. The first offer is terminated, though, and the offeree cannot go back and accept it if they attempt to haggle over the price or any other part of it. Consequently, the offeror is released from the obligation to fulfill the original offer.

In “Holland v. Eyre,” the plan was to buy a 97-year lease from Holland that he would then hold on to Burton. Holland agreed to provide Eyre a lease on the same terms that he had given Burton after accepting the proposal. It was decided that Eyre would not be bound. Eyre’s offer was to accept an assignment of the lease, and Eyre’s acceptance was restricted to providing a lease.

Additionally, in the case of Tinn v. Hoffman & Co., the plaintiff turned down the defendant’s offer to purchase 800 tons of iron for 69 sh per tonne. Unaware of the offer, the plaintiff likewise wrote to the defendant proposing to buy 800 tons of iron for 69 sh per ton. Since communication of the offer and acceptance is a necessary condition of a contract, and in this case, there was no communication of the offer, the court determined that there was no contract between the plaintiff and defendant.

One of the seminal rulings that established the idea of a counterproposal and attempted to clarify the significance of unconditional and unqualified acceptance when entering into a contract was Hyde v. Wrench. The ruling was correct in and of itself since it denied the plaintiff’s claim of the defendant’s breach of contract and said that the offer had not been accepted. It also clarified the circumstance in which the offeror is unwilling to return to the initial offer, and the offeree cannot accept the original offer after he makes a counteroffer. This case demonstrates unequivocally what constitutes complete acceptance of the offer and how crucial it is for the parties to agree in a contract.

The idea that “Acceptance must be absolute and unqualified” is based on this instance. Contracts ought to be clear, enforceable, and well-communicated (consensus). It conveyed to the contract’s parties that if there is any variation in the acceptance of an offer, then there is no acceptance. In that situation, a party cannot be held accountable fora breach of contract if they fail to fulfill their obligations (such as delivering goods) because there will not be a valid contract. The parties will be in the negotiating stage if there is even a small deviation from the conditions of the offer, and the party who made the original offer cannot accept it if the other party does not agree.