CONTRACT LAW — Formation of Contract — Counter-Offer — Legal Effect
Ratio Decidendi
Per Adekeye, JSC, in Bilante Int'l Ltd v. NDIC (2011) NLC-123-177-1996(SC) at p. 19; Paras B—D:
"A counter offer is a statement by the offeree which has the legal effect of rejecting the offer and of proposing a new offer to the offeror. It puts an end to the previous offer of the initial offeror. The legal effect of a counter-offer is to terminate the original offer so that it cannot subsequently be accepted by the offeree."
Explanation / Scope
This principle establishes that a counter-offer rejects the original offer and proposes a new one, terminating the original offer so it cannot subsequently be accepted. The principle applies in contract formation. It ensures that counter-offers have the effect of rejection. The principle reflects the legal effect of counter-offers. It prevents subsequent acceptance of the original offer. The court must recognize the counter-offer. The principle provides guidance on offer and acceptance.