Contracts Sep.20 PDF PDF

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Owen v. Tunison Plaintiff: W.H. Owen Defendant: R.G. Tunison Jurisdiction: Supreme Judicial Court of Maine Facts: On October 23, 1929, W.H. Owen (plaintiff) wrote a letter to R.G. Tunison (defendant) asking if he was willing to sell a lot he owned spanning one block of Main Street in Bucksport, Maine, referred to as the “Bradley block.” Tunison responded by letter from Cannes, France on November 12, stating that it would not be possible to sell the Bradley block unless he received $16,000 in cash, due to improvements he had made to the properties. Owen immediately sent another letter to Tunison stating his acceptance of the offer to sell the Bradley block for $16,000. However, Tunison promptly responded that he did not want to sell the Bradley block. Owen then brought an action for breach of contract against Tunison, claiming damages arising from Tunison’s refusal to sell the property. The case was reported to the Supreme Judicial Court of Maine for decision. Issue: Can a party’s statements made in negotiation create a binding offer? Held: No; Statements made in negotiation are not sufficient to constitute a binding offer where the language does not indicate the party’s intent to be bound by those statements. In this case, Tunison’s response to Owen’s offer—that Tunison could not sell unless he received $16,000 for the Bradley block—did not clearly state that he would sell the Bradley block for that amount. Hence, this language was not an offer because it did not indicate his intent to be bound to selling at that price. At most, Tunison may have made this statement with the intention of opening negotiations

for the sale of the Bradley block. Therefore, no binding offer was made to Owen for him to accept and no contract was formed. Judgment is granted for Tunison. Fairmount Glass Works v. Crunden-Martin Woodenware Co. Plaintiff: Crunden- Martin Defendant: Fairmount Glass Works Jurisdiction: Court of Appeals of Kentucky Facts: On April 20, 1895, Crunden-Martin wrote to Fairmount asking what was the lowest price Fairmount would charge for 10 car loads of green mason jars. The letter also asked for terms, including delivery terms and the amount of any cash discount. On April 23, Fairmount responded by letter, quoting prices for jars in various sizes, promising shipment by May 15, and offering a discount for cash paid within 10 days. The letter specified that these terms were offered for “immediate acceptance.” On April 24, Crunden-Martin sent a telegram to Fairmount, ordering 10 car loads based of Fairmount’s letter and confirming the letters terms. Also on the 24th, CrundenMartin sent a letter to Fairmount ordering specific quantities of each size of jar. Fairmount responded the same day, informing Crunden-Martin by telegram that Fairmount had sold its entire output and therefore couldn’t honor Crunden-Martin’s order. Crunden-Martin sued Fairmount, and Fairmount’s argued that by their quote didn’t specify the quantity of each size of jars they were prepared to sell, nor was that quantity set until CrundenMartin’s April 24 letter. Therefore, no contract existed and Fairmount could revoke by declining Crunden-Martin’s telegraph order. Issue: Can a party’s price quote inviting acceptance by the other party be revoked once accepted?

Held: No; By inviting acceptance from the other party, the price quote became a binding offer that could not be revoked once it was accepted by the other party. A quotation of prices alone is not an offer to sell and does not form a binding contract until the order made on the basis of that quotation is accepted. However, to determine the true meaning of the parties’ communications, courts review the communications to determine the parties’ intentions. Despite using the term “quote” in its response to Crunden-Martin’s request for Fairmount’s lowest price on Mason jars, Fairmount’s response was more than a quotation of prices because the letter invited “immediate acceptance.” Reading Fairmount’s April 23, 1895 letter as a whole, and viewed together with CrundenMartin’s April 20, 1895 letter requesting the lowest price for Mason jars, Fairmount’s April 23, 1895 letter constituted a binding offer that could not be revoked after Crunden-Martin accepted its terms in the April 24, 1895 telegram. Consequently, a binding contract was formed on April 24, 1895 upon Crunden-Martin’s acceptance of Fairmount’s April 23, 1895 offer letter, and Fairmount was not entitled to decline to fill the order. The judgment of the trial court is affirmed. Rule: Where a party quotes prices and invites acceptance by another party, a binding offer has been made that cannot be revoked once accepted.

Lefkowitz v. Great Minneapolis Surplus Store Plaintiff: Morris Lefkowitz Defendant: Great Minneapolis Surplus Store Jurisdiction: Supreme Court of Minnesota Facts: On April 6, 1956, Great Minneapolis Surplus Store, Inc. (defendant) published a newspaper advertisement stating that on the upcoming Saturday at 9:00 am, it would sell three fur coats described as “Worth to $100" for $1 each. The advertisement stated that the coats would be sold on a “first come, first served” basis. On April 13, 1956, the store published a similar advertisement with similar terms offering to sell a black lapin stole worth $139.50 for $1. On each sale date, Morris Lefkowitz (plaintiff) was the first person to present himself at the store and offer to buy the advertised items. However, the store refused to sell him the items on the ground that a “house rule” dictated that the offers were intended for women only. Lefkowitz brought suit against the store. The trial court held that the value of the fur coats in the first advertisement was too speculative to determine with any certainty and denied damages to Lefkowitz for these items. However, the trial court held that the value of $139.50 for the stole could be determined with sufficient certainty and awarded Lefkowitz the full value of the stole minus the $1 advertised purchase price. The store appealed. Issue: Is an advertisement a binding offer if it is clear, definite, and explicit, and leaves nothing open for negotiation? Held: Yes; The store’s advertisement is a clear, definite, and explicit offer, and acceptance by Lefkowitz formed a valid and enforceable contract. An advertisement constitutes a binding offer if it is clear, definite, and explicit, and leaves nothing open for negotiation. Whether an individual

newspaper advertisement constitutes an offer, as opposed to merely an invitation to make an offer, depends on the parties' intentions and the surrounding circumstances. Additionally, once an offer is made, the offeror can unilaterally modify the terms of the offer before acceptance. However, after acceptance, the offeror may not impose additional or arbitrary conditions on the offer. In this case, the advertisement by the store for the lapin stole was clear, definite, and explicit, and it left no terms open to negotiation. It stated that the stole would be sold on a given date at a given time to the first person who arrived and agreed to pay the $1 purchase price. Lefkowitz fulfilled this condition, and he thus accepted the store’s offer. This formed a valid and enforceable contract, and the store could not then impose additional and arbitrary conditions on the offer such as requiring the purchaser to be female. Accordingly, the trial court correctly awarded damages to Lefkowitz in the amount of the value of the stole minus the $1 purchase price. The trial court's judgment is affirmed....