When the offeree offers to qualified acceptance of the offer subject to modifications and variations in the terms of the original offer, he is said to have made a counter offer. Counter offern amounts to rejection of the original offer. In such a case an offer may be revoked.
Example: Hyde (vs) Wrench (1840)
Facts: ‘W’ offered to sell a farm to ‘H’ for L 1000 (pounds). ‘H’ offered L 950 (pounds) ‘W’ refused the offer. Subsequently, ‘H’ offered to purchase the farm for L 1000 (pounds).
Judgment: There was no contract as ‘H’ by offering L 950 (pounds) had rejected the original offer. Because the counter offer to a proposal amounts to its rejection.