Mesaros v. United States

United States Court of Appeals for the Federal Circuit · 1988 · Contracts

Contractsadvertisement not offerinvitation to dealobjective reasonablenessgovernment contractsMint coin salesmandamusstatutory duty

Facts

After Congress authorized limited-quantity Statue of Liberty commemorative coins, the Mint mailed promotional materials and order forms inviting prepaid orders before issuance and offering a pre-issue discount. Mary Mesaros submitted an order using Anthony Mesaros's credit card information, while later family orders paid by check were filled; the credit-card order was not processed before the 500,000 authorized gold coins were exhausted. The Mint had received hundreds of thousands of orders, including many credit-card orders that required outside verification by Mellon Bank, and about 13,000 unverified or uncertified credit-card orders ultimately were rejected. Plaintiffs sued, claiming the mailing created a contract or, alternatively, that the Coin Act required the Mint to accept their order.

Issue

Did the Mint's promotional materials and order form constitute an offer such that plaintiffs' submission created a binding contract for delivery of gold coins? If not, did the Coin Act impose a specific statutory duty on the Mint to accept plaintiffs' order, such that mandamus could compel contract formation or delivery?

Rule

General advertisements, circulars, and mailed solicitations are ordinarily invitations for offers, not offers themselves, unless a reasonable offeree would objectively understand the communication to manifest a present intent to be bound. Where the solicitation states or shows that customer orders are subject to verification or acceptance by the seller, the customer submission is the offer and no contract arises until the seller accepts. Mandamus is unavailable absent a specific statutory duty owed to the plaintiff, and a court cannot compel an agency to act beyond authority delegated by Congress.

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The National Heritage Archive mailed brochures from Washington, D.C. advertising a limited run of commemorative silver medallions for $85 each. The brochure included a detachable form stating, just above the signature line, "Please accept my order," and added that "all orders are subject to verification by the Archive." Elena Cruz in Phoenix mailed the signed form with her card information, but before the Archive verified it, the medallions were gone.

Did Elena most likely form a contract when she mailed in the order form?

Explanation. General advertisements, circulars, and mailed solicitations ordinarily are invitations for customers to make offers, not offers themselves. The key question is whether a reasonable recipient would objectively understand the communication as manifesting a present intent to be bound. Language such as "Please accept my order" and "subject to verification" shows the customer is making the offer and no contract arises until the seller accepts. That is the controlling reasoning here. (Derived from Mesaros v. United States (n.d.).)