## Facts

- T.J. Evans (defendant), through an agent, wrote to Livingstone (plaintiff) offering to sell certain land for $1,800 on stated terms.
- Livingstone replied by telegram: “Send lowest cash price. Will give $1,600 cash. Wire.”
- Evans’s agent responded by telegram: “Cannot reduce price.”
- Immediately after receiving “Cannot reduce price,” Livingstone wrote back stating that he accepted the $1,800 offer.
- Before the transaction was completed, Evans entered into a contract to sell the same land to a third party.
- Livingstone sued for specific performance, claiming a binding contract had been formed by the communications.

## Issues

1. Whether Livingstone’s telegram offering $1,600 was a counter-offer that rejected and ended Evans’s $1,800 offer.
2. If the $1,800 offer was ended by the counter-offer, whether Evans’s reply “Cannot reduce price” renewed the $1,800 offer so that Livingstone could accept it.
3. If a contract existed, whether Livingstone was entitled to specific performance.

## Decision

- The Supreme Court of Alberta, Trial Division (Walsh J.) held that Livingstone’s $1,600 telegram was a counter-offer and, under the usual rule, operated as a rejection of the $1,800 offer.
- The court held that Evans’s telegram, “Cannot reduce price,” was not only a refusal of the $1,600 counter-offer; it amounted to a renewal (or reaffirmation) of the original $1,800 offer.
- Livingstone’s subsequent written acceptance therefore accepted a renewed offer, forming a binding contract for the sale of the land at $1,800.
- The court awarded judgment for Livingstone, ordering specific performance (with costs).

## Legal Principles

- A counter-offer generally rejects the original offer and ends the offeree’s ability to accept that original offer (Hyde v. Wrench).
- A communication that proposes a different price is ordinarily a counter-offer rather than a mere request for information.
- Even after a counter-offer has ended an original offer, the offeror may revive the original offer by words or conduct showing the original terms are again open for acceptance.
- Whether an offer has been revived depends on the reasonable meaning of the parties’ communications in context.
- For land-sale contracts, specific performance may be ordered where a valid contract is shown and damages are not an adequate substitute.

## Conclusion

Livingstone’s $1,600 telegram operated as a counter-offer that would normally end Evans’s $1,800 offer, but Evans’s reply “Cannot reduce price” was interpreted as renewing the $1,800 offer; Livingstone’s prompt acceptance then formed a binding contract for the land, so the court ordered specific performance.


Livingstone v. Evans, 4 D.L.R. 769 (1925)