More Acceptance . . .

Contracts – Prof. Merges

2.10.2011

White v. Corlies & Tift

• Procedural History

• Plaintiff, Contractor, won at trial, affirmed on appeal; Ct of Appeals reversed, ordering a new trial

White v. Corlies & Tift

• Facts

The Communications

• 9/1865: Owner (Δ) specs

• 9/28/1865: Estimate by π

• 9/28/1865: Change in spec by Owner

• 9/28/1865: Signature from π on this change

• 9/29/1865: Note from Owner to Contractor

The Key Communication

• 9/29 letter, owner to contractor:

“Upon an agreement to finish the fitting up of offices 57 Broadway in two weeks from date, you can begin at once.

The writer will call again, probably between 5 and 6 this pm.

Signed, White & Corlies”

Was this an offer?

Was this an offer?

• Yes

• Court sees it that way: “a proposition, and must have been accepted by the plaintiff before wither was bound”

What mode of acceptance was specified?

What mode of acceptance was specified?

• “The offeror is master of the offer”

• This includes the mode of acceptance

Mode of Acceptance

• What does the NY Ct of Appeals say about this?

Acceptance

“[T]he acceptance of [the offer] must be manifested by some appropriate act”

Page 153, top

What acts would have been “appropriate” for

acceptance?

What acts would have been “appropriate” for

acceptance?

• How about a written “I accept” from White?

What acts would have been “appropriate” for

acceptance?

• How about a written “I accept” from White?

• Verbal – if “W.H.R” from Corlies really had stopped by between 5 and 6 on the 29th?

What acts would have been “appropriate” for

acceptance?

What acts would have been “appropriate” for

acceptance?

• How about commencing work?

Acceptance?

• π/Contractor’s argument

–Purchase of lumber and start of

work by π

Does the court agree?

• This work was not a clear, objective indication of plaintiff’s acceptance of defendant’s offer

• The purchase of materials and commencement of work on it might have been for any job

Was acceptance by commencement of

performance ruled out?

Was acceptance by commencement of

performance ruled out?

• NO!

• Performance unambiguously tied to Corlies and observed by Corlies would have been ok

Variation

• Note p. 154: What if Corlies had written: “If you want to do the work, let me know by return mail and you can begin at once.”

“upon an agreement”

• Does this mean “now that we have an agreement”

• Or, “if and when we were to have an agreement”?

§ 30. Form Of Acceptance Invited

(1) An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing a specified act, or may empower the offeree to make a selection of terms in his acceptance.

(2) Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances.

R2 § 53. Acceptance By Performance

In the absence of a contrary indication, the question is whether acceptance by performance is reasonable under the circumstances. See § 30(2). Where either acceptance by performance or acceptance by promise is reasonable, the offeree may choose between them.

R2 § 56. Acceptance By Promise; Necessity Of Notification To

Offeror

Except as stated in § 69 or where the offer manifests a contrary intention, it is essential to an acceptance by promise either that the offeree exercise reasonable diligence to notify the offeror of acceptance or that the offeror receive the acceptance seasonably.

R2 § 56. Acceptance By Promise; Necessity Of Notification To

Offeror

Except as stated in § 69 or where the offer manifests a contrary intention, it is essential to an acceptance by promise either that the offeree exercise reasonable diligence to notify the offeror of acceptance or that the offeror receive the acceptance seasonably.

R2 § 69: Acceptance by Silence

(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:

(a) Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.

Does “notice” have to be explicitly communicated?

• What if Tift, Contractor, had bought special wood and begun carving the name “White and Corlies” in it?

Does “notice” have to be explicitly communicated?

• What if Tift, Contractor, had bought special wood an begun carving the name “White and Corlies” in it?

• What if Corlies & White observed this and said nothing?

Ever-Tite Roofing v. Green

• Procedural History

• Facts

• Holding

“Willy [Loman] is caught in a cycle of acceptance and rejection . . .”

Ever-Tite Roofing v. Green

• Who was the offeror?

• Who was the offeree?

• How like Int’l Filter v. Conroe?

K Formation

• Terms of the offer

K Formation

• Terms of the offer

“This agreement shall become binding only upon written acceptance hereof, by the principal or authorized officer of the Contractor, or upon commencing performance of the work.”

Why the 2 modes of acceptance?

Why the 2 modes of acceptance?

• Home office approval, as in Int’l Filter

• But: if they actually begin work, make sure they get paid

K Formation

• Trial court: K formed?

K Formation

• Trial court: K formed?

• Why not? What happened to offer?

Revocation here

• When was the offer revoked?

Appellate court

• Offer revoked?

Appellate court

• Offer revoked?

• Why not?

Appellate court

• Offer revoked?

• Why not?

When precisely did Acceptance occur?

Appellate court

• Offer revoked?

• Why not?

When precisely did Acceptance occur? – “Loading the trucks” -

How long would the Greens have to wait before hiring someone

else?

• When does an offer lapse?

Allied Steel

Hankins v. Ford; Ford v. Allied

Allied Steel

• Procedural history

• Facts

Indemnification

• Contractual assignment of a risk of loss

• “Risk shifting” via K

• Private insurance function

Communications

• 8/19/1955 – Ford Purchase Order Form

• 7/26/55 – Amendment No. 2 to PO

Offer; Terms of Acceptance?

“This purchase order agreement is not binding until accepted. Acceptance should be executed on acknowledgement copy which should be returned to buyer [Ford].”

Timing issues . . .

• P. Top p 159

What is Allied’s Position?

What is Allied’s Position?

• Arguments?

“Offeror Master of Offer”

• “Exclusive” mode of acceptance vs. “suggested” mode

“Offeror Master of Offer”

• “Exclusive” mode of acceptance vs. “suggested” mode

–Application here?

“It is well settled . . .” - 159

• Be careful! “. . . In accordance with the terms of the offer . . .”

R2 § 56. Acceptance By Promise; Necessity Of Notification To

Offeror

Except as stated in § 69 or where the offer manifests a contrary intention, it is essential to an acceptance by promise either that the offeree exercise reasonable diligence to notify the offeror of acceptance or that the offeror receive the acceptance seasonably.

R2 § 69: Acceptance by Silence

(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:

(a) Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.

§ 30. Form Of Acceptance Invited

(1) An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing a specified act, or may empower the offeree to make a selection of terms in his acceptance.

(2) Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances.

R2 § 53. Acceptance By Performance

In the absence of a contrary indication, the question is whether acceptance by performance is reasonable under the circumstances. See § 30(2). Where either acceptance by performance or acceptance by promise is reasonable, the offeree may choose between them.

What about an “exclusive” mode of acceptance, not complied with

--

• But then offeror acquiesces in offeree’s performance or tender of performance?

Waiving the “exclusive mode” of acceptance

- Venters case, cited 159

- Carbolic Smoke Ball, P. 157