A proposal to accept, or an acceptance, upon terms varying from those offered, is a rejection of the offer, and puts an end to the negotiation, unless the party who made the original offer renews it, or assents to the modification suggested. The other party, having once rejected the offer, cannot afterwards revive it by tendering an acceptance of it.
On December 8, A offered to sell to B 2000 to 5000 tons of iron rails on certain terms specified, adding that if the offer was accepted A would expect to be notified prior to December 20. On December 16 B replied, directing A to enter an order for 1200 tons, "as per your favor of the 8th." On December 18, A declined to fulfil B's order. B filed a case against A for breach of contract. The trial court held that A did not breach any contract between the parties because no contract existed when A rejected B's offer. The case was appealed to the Supreme Court of the United States.
Was there a valid contract?
On review, the Court affirmed and found that when B received A's offer to sell to B between two thousand and five thousand tons of steel, B rejected the offer by placing an order for twelve hundred tons of steel. By accepting A's offered price, but ordering less than the specified quantity, B made a qualified acceptance of A's offer and thus rejected A's offer. Once B rejected the offer, the B could not revive it by accepting A's offer. A's notification to B that the order could not be filled closed negotiations between the parties.