Minnesota Linseed Oil Co. v. Collier White Lead Co.

United States Circuit Court for the District of Minnesota · 1876 · Contracts

offermarket fluctuationtime limitationacceptancecontractstelegraph acceptancemailbox rulereasonable time

Facts

The plaintiff made an offer by telegraph to sell an article that fluctuated greatly in price. The defendant later deposited a telegraphic message accepting the offer at 8:53 a.m. on Tuesday, August 3. The court treated the delivery of that message to the telegraph office as the moment of acceptance if a contract was formed. The dispute turned on whether that acceptance was sent within a reasonable time after receipt of the offer.

Issue

When an offer is made by telegraph, does a contract arise upon deposit of the acceptance in the telegraph office if the acceptance was not sent immediately? More specifically, was the defendant's telegraphic acceptance on Tuesday, August 3, within a reasonable time so as to bind the plaintiff?

Rule

There is no difference between contracts negotiated by mail and by telegraph for purposes of acceptance: an acceptance is effective when it is deposited in the proper office for transmission, not when received. But if no definite time for acceptance is stated, the acceptance must be made within a reasonable time, and what is reasonable depends on the circumstances of the negotiation and the character of the subject matter, including whether the article is stable in price or subject to sudden market fluctuations.

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Granite Harbor Milling, based in Duluth, telegraphed Nora Patel in Milwaukee offering to sell 500 barrels of resin, a commodity known for sharp daily price swings. Thirty minutes later, Nora delivered a telegram stating, "I accept your offer," to the Milwaukee telegraph office, but the message was not delivered in Duluth until two hours after Granite Harbor had sent a telegram attempting to withdraw the offer.

Assuming Nora's acceptance was sent within a reasonable time, when was the contract formed, if at all?

Explanation. The governing rule treats telegraph and mail alike: acceptance is effective when deposited in the proper telegraph office for transmission, not when received. Thus, if the offer was still open and the acceptance was timely, the contract was concluded upon dispatch of Nora's telegram. The later delivery time and later messages do not change that point of formation. (Derived from Minnesota Linseed Oil Co. v. Collier White Lead Co. (1876).)