A simple incremental model describing the pre-failure behaviour of granular soils is presented. The model describes both the dry/fully drained and undrained response. It takes into account an initial anisotropy of soil and an initial state defined as either contractive or dilative. A physically sound definition of loading/unloading is assumed, which differs from elasto-plastic approaches. The model is based on extensive empirical data and gives predictions conformable with experimental results. It also describes prefailure instabilities of granular soils, both dry/fully drained and undrained. The Hill's criterion was used to examine stability. It was shown that this condition can be formulated either in terms of the effective stresses or by the total stresses. In the extreme cases of either dry/fully drained or undrained conditions, these alternative formulations are equivalent. This is not so in the case of partial drainage of pore water and associated volumetric deformations as well as pore pressure changes. The model describes the prefailure instabilities well, and additionally allows for analytical derivation of the instability line. It was shown that the second order work, appearing in the Hill's condition, is equivalent to the entropy source.