The ruling of the High Court of England and Wales in Gibbs v Lakeside Developments Ltd EWHC 2203 (Ch) reiterates the age-old principle that an offer must be accepted in its entirety for acceptance to be legally binding.
Prior to an appeal hearing of a dispute between the parties, one of the parties (Party A) made a settlement offer to the other (Party B). Party B responded to Party A accepting the offer, but also attached a draft consent order specifying a date for payment. This date was later than the date requested by Party A.
The Court was asked to decide whether Party B’s email, which on the face of it accepted Party A’s offer, was legally binding acceptance or whether the attachment constituted a counter-offer.
Party B argued that the attachment was ‘merely a proposed formal document to give effect to the agreement’ and that this proposal was intended to be amended in accordance with the instructions of Party A. The judge decided that given the lack of consensus between the parties, by virtue of attaching a conflicting draft order, Party B’s email and attachment constituted a counter-offer.
This decision reiterates the point that acceptance must unequivocally cover every part of the other party’s offer and that the entire communication is to be taken as a whole and must not vary the terms of the original offer.
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