Stevenson Jacques & Co v McLean (1880) 5 QBD 346

Facts

• The case involved the sale of iron, with McLean offering to sell to Stevenson Jacques & Co at a specified price, the offer stated to remain open until a particular date.
• Before the deadline, Stevenson Jacques & Co sent a telegram inquiring about the possibility of buying the iron at a slightly lower price.
• McLean treated this inquiry as a rejection of the original offer and proceeded to sell the iron to a third party.
• Subsequently, Stevenson Jacques & Co telegraphed their acceptance of the original offer.
• The central dispute was whether the initial telegram was a counter-offer (terminating the original offer) or merely a request for information (leaving the original offer open).

Issues

1. Whether the plaintiffs’ inquiry about a different price constituted a counter-offer or a mere request for information.
2. Whether the original offer remained open and capable of acceptance after the plaintiffs' telegram.
3. How the distinction between counter-offer and request for information affects the formation of a binding contract.

Decision

• The court held that the plaintiffs' telegram was a request for information, not a counter-offer.
• It was found that the original offer had not been terminated and remained open for acceptance.
• Acceptance of the original offer by the plaintiffs was valid, resulting in a binding contract.

Legal Principles

• A counter-offer introduces new terms or modifies existing ones, thereby rejecting and terminating the original offer.
• A request for information seeks clarification without altering the offer, and does not terminate the original offer.
• The assessment is made objectively, considering how a reasonable person would interpret the communication between the parties.
• Clear and unequivocal acceptance is required to form a legally binding contract.
• Communications during negotiations must be carefully distinguished to avoid inadvertently terminating offers.

Conclusion

Stevenson Jacques & Co v McLean (1880) 5 QBD 346 established that a mere inquiry regarding terms does not amount to a counter-offer or rejection, ensuring the original offer may still be accepted and forming the basis for contractual certainty in negotiations.