Site navigation

What is the legal effect of making a counter-offer on the original offer?

Under Section 7(1) of the Indian Contract Act, 1872, in order to convert a proposal into a promise, the acceptance must be absolute and unqualified. As established in Hyde…

Choose your answer

What is the legal effect of making a counter-offer on the original offer?

Select one answer
Answer and explanation

Correct answer C

Under Section 7(1) of the Indian Contract Act, 1872, in order to convert a proposal into a promise, the acceptance must be absolute and unqualified. As established in Hyde v. Wrench (1840) 3 Beav 334, a counter-offer proposing different terms is not an acceptance; instead, it operates as 'A rejection of original offer', terminating the original offer so that it cannot subsequently be accepted.

Option feedback

Option A

Incorrect. An invitation to an offer precedes an offer, whereas a counter-offer is a new proposal made in response to an existing offer that rejects the original offer.

Option B

Incorrect. Under Section 7(1) of the Indian Contract Act, 1872, acceptance must be absolute and unqualified; a conditional acceptance or counter-offer is not a valid acceptance.

Option C

Correct. Under Section 7(1) of the Indian Contract Act, 1872 and the principle in Hyde v. Wrench (1840), a counter-offer introduces variations to the terms of the proposal and operates as 'A rejection of original offer'.

Option D

Incorrect. 'Bargain' is a general colloquial term and does not state the legal effect of a counter-offer on the original proposal.

Practice for these exams

Related question papers

Related exam syllabi

Related questions in this topic