California Civil Jury Instructions (CACI)

311. Contract Formation—Rejection of Offer

[Name of defendant] contends that the offer to enter into a contract terminated because [name of plaintiff] rejected it. To overcome this contention, [name of plaintiff] must prove both of the following:

1. That [name of plaintiff] did not reject [name of defendant]’s offer; and

2. That [name of plaintiff] did not make any additions or changes to the terms of [name of defendant]’s offer.

If [name of plaintiff] did not prove both of the above, then a contract was not created.

New September 2003

Directions for Use

Do not give this instruction unless the defendant has testified or offered other evidence in support of his or her contention.

Note that rejections of a contract offer, or proposed alterations to an offer, are effective only if they are communicated to the other party. (See Beverly Way Associates v. Barham (1990) 226 Cal.App.3d 49, 55 [276 Cal.Rptr. 240].) If it is necessary for the jury to make a finding regarding the issue of communication then this instruction may need to be modified.

This instruction assumes that the defendant is claiming plaintiff rejected defendant’s offer. Change the identities of the parties in the indented paragraphs if, under the facts of the case, the roles of the parties are switched (e.g., if defendant was the alleged offeree).

Conceptually, this instruction dovetails with CACI No. 309, Contract Formation—Acceptance. This instruction is designed for the situation where a party has rejected an offer by not accepting it on its terms.

Sources and Authority

  • Civil Code section 1585 provides: “An acceptance must be absolute and unqualified, or must include in itself an acceptance of that character which the proposer can separate from the rest, and which will conclude the person accepting. A qualified acceptance is a new proposal.”
  • Section 39(2) of the Restatement Second of Contracts provides that “[a]n offeree’s power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counteroffer manifests a contrary intention of the offeree.”
  • Cases provide that “a qualified acceptance amounts to a new proposal or counter-offer putting an end to the original offer. . . . A counter-offer containing a condition different from that in the original offer is a new proposal and, if not accepted by the original offeror, amounts to nothing.” (Apablasa v. Merritt and Co. (1959) 176 Cal.App.2d 719, 726 [1 Cal.Rptr. 500], internal citations omitted.) More succinctly: “The rejection of an offer kills the offer.” (Stanley v. Robert S. Odell and Co. (1950) 97 Cal.App.2d 521, 534 [218 P.2d 162].)

  • “[T]erms proposed in an offer must be met exactly, precisely and unequivocally for its acceptance to result in the formation of a binding contract; and a qualified acceptance amounts to a new proposal or counteroffer putting an end to the original offer.” (Panagotacos v. Bank of America (1998) 60 Cal.App.4th 851, 855–856 [70 Cal.Rptr.2d 595].)
  • The original offer terminates as soon as the rejection is communicated to the offeror: “It is hornbook law that an unequivocal rejection by an offeree, communicated to the offeror, terminates the offer; even if the offeror does no further act, the offeree cannot later purport to accept the offer and thereby create enforceable contractual rights against the offeror.” (Beverly Way Associates, supra, 226 Cal.App.3d at p. 55.)

Secondary Sources

1 Witkin, Summary of California Law (10th ed. 2005) Contracts, § 163

13 California Forms of Pleading and Practice, Ch. 140, Contracts, § 140.22 (Matthew Bender)

5 California Points and Authorities, Ch. 50, Contracts, § 50.352 (Matthew Bender)

27 California Legal Forms, Ch. 75, Formation of Contracts and Standard Contractual Provisions, §§ 75.212–75.214 (Matthew Bender)

1 Matthew Bender Practice Guide: California Contract Litigation, Ch. 13, Attacking or Defending Existence of Contract—Absence of Essential Element, 13.23–13.24