The owner of a new building wanted four maple trees,each six metres tall,planted on the north side of the building.Lloyd Landscaper submitted his offer of four six-metre maples planted for $800.The owner said he would pay $600 for that.Lloyd said that for $600 he would supply four smaller,five-metre trees.The owner said,"$600 for five-metre trees plus a Christmas tree for my kids." Lloyd was disgusted and said,"Forget it.I don't need this job." As he was leaving,the owner said,"All right,I'll accept your offer of $600 for the five-metre maples planted." Lloyd kept on walking.Which of the following is true?
A)There is no contract because Lloyd's last offer had been rejected by a counter-offer.
B)There is no contract because Lloyd's last offer was revoked.
C)There is no contract because there is a presumption in law in these circumstances that the parties did not intend to create a legal relationship.
D)There is no contract because Lloyd's last offer had lapsed after a reasonable time.
E)There is a contract because at one point in the conversation Lloyd was willing to sell and the owner was willing to buy four trees.

Question

Quizplus · Accepted Answer

A counter-offer acts as a rejection of the original offer and creates a new offer. In this case, the owner's counter-offer of $600 for the five-metre trees and a Christmas tree rejected Lloyd's offer of $800 for the six-metre trees, and his subsequent walking away from the conversation indicated that he did not accept the counter-offer. Therefore, there was no acceptance of an offer and no contract was formed.

The Owner of a New Building Wanted Four Maple Trees,each