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44 Chapter 2Making a contract

The decision in this case makes good sense. If a business offers an asset for sale at a certain

price and receives a counter offer, then the counter offer is in effect a refusal of the offer to

sell. The business wishing to sell might therefore reasonably enough sell the asset to some-

one else. If the original offeree could then accept the original offer, and make the business

liable for breach of contract, this would be very harsh.

Figure 2.2 An outline of the postal rule

Hyde vWrench (1840)

The defendant offered to sell his farm to the claimant for £1,000. The claimant offered £950

for the farm. The defendant wrote to the claimant declining the counter offer of £950. The

claimant immediately wrote back, saying that he accepted the original offer to sell the farm

for £1,000. The defendant refused to sell the farm at this price.

HeldThere was no contract. The defendant’s original offer had been revoked by the

claimant’s counter offer. The original offer had therefore ceased to exist and could not later

be accepted.