Assent
Elements
– meeting of the minds was the old standard, of subjectivity…
o it assumes that both of the people come together at the same time with the same thought to assent
– the second standard is the reasonable person (objective standard)
o if a reasonable person would have thought that you intended to contract, then the court would see a contract.
o Problematic because actual intent doesn’t matter
Today, these standards have been combined
To determine Assent and a present intent to contract.
Would a reasonable person think an intent to contract?
Did the promisee actually believe an intent to contract?
– Further away to get from the business setting, less likely to have assent
o In Cohen, court found no assent. They weren’t thinking of a legally binding contract because they were talking about an ethical standard. Moreover, a reasonable person wouldn’t have thought an intent to contract because they were so far from the commercial setting.
– Mutual assent is unnecessary (ie. both parties wanted to assent) because the mentality of the promisor is irrelevant unless the promisee is aware of the promisor’s intent.
Lucy v. Zehmer (1954) – Lucy promises to pay 50K and Zehmer promises to sell the family farm in a bar (bilateral contract). Zehmer argues no assent because he whispered to his wife that it was a joke. Reasoning that mutual assent of the parties is unnecessary as long as a reasonable person would have thought there was an intent to contract and the promisee actually believed there was an intent to contract.
Note from Cohen Case –
Offer
Offer – a more objective standard vs. the reasonable assent standard
Ways to determine whether a given communication is an offer
would a reasonable person there was an intent to contract
Look at what is purported as an offer, and ask, could the person say “I accept” and close the deal
If not, then it’s negotiations, and the the deal can’t be closed
How general/specific the communication is
Quantity
Non-negotiable
Number of offerees (if it is to the general public, then it is an advertisement)
History between the parties (ie. Previous negotiations.)
Advertisements are not offers (unless it is clear, definite, and explicit, Lefkowitz v. Great Minneapolis Surplus Store)
Business quotes are not offers
Specific language ( a quotation that says for immediate acceptance shows a present intent to contract)
Owen v. Tunison (1932) – P sent letter to D asking to buy a certain property for 6K. D replies “it would only be possible to sell unless I was receive 16K cash.” P sends a message that he accepted the offer. D says he didn’t wish to sell the land. Reasoning that the D’s response “not possible to sell unless” was not an offer that empowered the P to bind a contract for sale, the D’s response was only intent to open negotiations.
Note: no specificity, P couldn’t accept and close the deal
Harvey v. Facey
Will you sell Bumper Hall Pen? Telegraph lowest cash price.
Lowest price for Bumper Hill 900
We will buy
Is there an offer (corresponds to the communications above)?
Seller couldn’t close the deal, it is clearly the beginning of negotiations
Buyer argues that there is an implied promise… you wouldn’t be telegraphing the lowest price if you weren’t intending to sell.
Court says that there are two questions? They were negotiating with other people (it could have been that this was the city’s lowest price) and the P knew about the negotiations. So not that this was their lowest price, but not the highest price. Moreover, there were two questions and Facey only answered one of the two questions.
On the other hand, it is clear that they are saying that they want to buy.
This is no offer because of the history.
Fairmount Glass Works v. Cuden-Martin Woodenware Co. (1899) –
4-20 What is the lowest price for ten car loads; state terms (D)
4-23 We quote you…; for immediate acceptance; shipment not later (Court finds an Offer because of its specificity)
4- 24 We want ten car loads; highest quality goods only (Acceptance)
4 – 24 No deal
– Court finds that the 4-23 correspondence is an offer (vs. a quotation) because it said for immediate acceptance (a reasonable person could say I accept), it’s specific (10 car loads, prices, shipping deadline), and they had a history.
o Difference from Harvey, a present intent to contract
– D argues not acceptance because the inclusion of ship the highest quality. Court says that this standard
Lefkowitz v. Great MN Surplus Store (1957) – Advertisment says that the first person will get a chair worth 139 for $1. P comes and they don’t give to him arguing that it was only open to females. Advertisements are normally not offers because the number of offerees are too large for a reasonable person to believe that they could purchase it. Here, because the advertisement was clear, definite, and explicit, and left nothing open for negotiation, it was held a valid contract. Quantity, volume, when it will happen, are very specific, Zierdt believes that this was done to combat bait and switch because the same thing happened last week, so there was no assent because he knew their intent.
Rescission of an Offer
Elements Statement: Rescission is available when one’s offer is material mistake that is not the result of neglect of a legal and enforcement would not be unconscionable to enforce.
General rules for rescission when one makes a mistake
Mistake
Mistake must be material (not a $1 mistake)
No neglect of a legal duty (the mistake must not be more than a clerical error)
Enforcement wouldn’t be unconscionable (excessive)
Prompt Notice
Elsinore Union Elementary School District v. Kastoroff– (1960) – D, a contractor submitted a low bid to make certain editions to P’s school. Due to a clerical error made on bid worksheet, the bid was 9.5K off. He was the k that evening, realized the consent and promptly notified the school board the next morning. Because of the nature of the bid for contracts practice, D did not neglect his legal duty. Court ruled that D properly rescinded his offer.
Rules Applied to Elsinore Union Elementa
eous
White v. Corlies & Tift (1871) – P was a builder and D wanted to furnish office.
– P sends an estimate to D – NEGOTIATION
– D then sends a note that says that upon agreement to finish the job in two weeks, the P can begin at once OFFER.
– P buys materials for the project, but does not reply to message sent – ACCEPTANCE?
o Court says no because D was looking for a promise
§ look to the history of the communications)
§ More advantageous to get a promise because he had a specific and short time period in mind. (time is of the essence and they even took different specs to make it happen more quicker)
o Purchasing the material – A reasonable person would not have reasonably believed that someone was accepting an offer.
Ever-tite v. Green (1955) – agreement signed by Green says that subject to a credit check, the contract happens with either written acceptance from company or commencement of performance. Home office clause, so this agreement is an offer. When Green’s made the offer, they were looking for a return promise to ensure that Ever-Tite would fix their roof (vs. performance where they could start then stop). Although Green’s never got a return promise, reasonable time hadn’t lapsed so performance was still valid. Reasoning that commencement of performance is acceptance, Green could not revoke his offer when Ever-Tite showed up to his house ready to re-roof his house.
– What Green’s looking for? Which is more advantageous? a return promise to ensure Ever-Tite promises to fix the roof. If looking for performance, then Ever-tite could start, then stop.
– Did Green revoke the offer before Ever-Tite accepted their offer?
o Never got a return promise (written approval)
§ An offer remains for a reasonable period of time. If it goes too long, then the offer is revoked.
§ Time didn’t lapse because 9 days is a reasonable time to get a credit check (in the 1950’s)
o Court defines commencement as loading the truck, not starting on the roof. Therefore, the Green’s lost.
– Note: adding a deadline
Termination of the Power of Acceptance
After a party has made an offer, conferring on another the power of acceptance, that power of acceptance can be terminated in four situations.
Lapse
Revocation
Death of the offeror
Rejection (they can’t come back later and accept the offer.
Lapse
If offer lapses, the offeree no longer has the opportunity to close the deal. After it has lapsed and the offeree tries to accept it, it becomes a new offer to original offeror.
