McGurn v. Bell Microproducts, Inc.

United States Court of Appeals for the First Circuit · Contracts

ContractsAcceptance by silenceCounterofferSummary judgmentsilence as acceptancecounterofferemployment offerseverance clause

Facts

Bell sent McGurn a signed employment offer stating that if he was terminated without cause within the first twelve months, he would receive a severance package worth $120,000. McGurn signed and returned the letter, but crossed out "twelve," inserted "twenty four," initialed the change, and did nothing else to call the modification to Bell's attention. Bell employed McGurn for about thirteen months and then terminated him without paying severance, asserting that McGurn's change was a counteroffer Bell never accepted. Bell officials denied seeing the alteration when the letter was returned, though the returned letter was received and there was evidence Bell's practice was to check returned offer letters for signature.

Issue

Whether Bell's silence after receiving McGurn's altered offer letter constituted acceptance of his counteroffer as a matter of law. More specifically, the question was whether the summary judgment record compelled the conclusion that Bell knew or had reason to know of the counteroffer and had a reasonable opportunity to reject it.

Rule

Under Massachusetts law, silence in response to an offer may constitute acceptance if an offeree who takes the benefit of offered services knew or had reason to know of the existence of the offer and had a reasonable opportunity to reject it. On summary judgment, if the evidence permits plausible but conflicting inferences about such knowledge or opportunity to reject, the issue must be resolved by the factfinder rather than as a matter of law.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Boston, Lila Moreno received a signed employment letter from Harbor Ridge Analytics offering a $30,000 retention bonus if she remained employed for six months. She signed and returned the letter after changing the bonus period from six months to twelve months and initialing the change, without otherwise mentioning it.

What is the strongest characterization of Lila's returned document?

Explanation. A reply that changes a material term is not an acceptance but a counteroffer. The majority opinion treated an altered acceptance changing the duration of a severance provision as a counteroffer by agreement of the parties. The signature does not eliminate the effect of the changed term. (Derived from McGurn v. Bell Microproducts, Inc. (n.d.).)