Craft v. Elder & Johnston Co.

Ohio Court of Appeals · 1941 · Contracts

Contractsadvertisementsofferinvitation to negotiateunilateral offerwithdrawal of offeracceptancecontract formation

Facts

Defendant advertised an all-electric sewing machine in the Dayton Shopping News for $26.00 as a "Thursday Only Special." Plaintiff alleged that on the advertised day she tendered $26.00 for one machine, but defendant refused to deliver it. She claimed the machine was worth $175.00 and sought damages for the difference. The parties stipulated that the only issue submitted was whether the advertisement was an offer.

Issue

Did the defendant's newspaper advertisement offering a sewing machine for $26.00 constitute an offer that plaintiff could accept by tendering the stated price, thereby forming a contract when defendant refused to sell?

Rule

In the absence of special circumstances, an ordinary newspaper advertisement directed to the public generally is not a binding offer but an invitation to negotiate or to receive offers. Even if characterized as a unilateral offer to the public, where no contractual relation exists and no consideration supports the offer, it may be withdrawn before any consummated transaction or other special circumstance creates contractual liability.

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Summit Housewares, a department store in Columbus, places a newspaper ad stating: "Saturday Special—Deluxe blenders $19 each." On Saturday morning, Nora Patel goes to the store, places $19 on the counter, and asks for one blender. Before any blender is brought out, the clerk says the store will not sell any at that price.

Under the governing rule, is Summit Housewares contractually bound to sell Nora the blender for $19?

Explanation. The majority rule is that, absent special circumstances, an ordinary advertisement directed to the public generally is not a binding offer but an invitation to negotiate or receive offers. Tendering the advertised price and demanding the goods does not itself create contractual relations. Because no transaction was consummated before refusal, the store was not bound.