Moulton v. Kershaw

Supreme Court of Wisconsin · 1884 · Contracts

Contractsofferadvertisementpreliminary negotiationsdefinitenessstatute of fraudssale of goodsbusiness circular

Facts

The appellants sent the respondent a letter stating that they were authorized to offer Michigan fine salt at stated prices and terms and indicating that it was a bargain. In response, the respondent telegraphed an order for 2,000 barrels. The respondent contended that the letter was an offer to sell such reasonable quantity of salt as he might order. Because the alleged sale of personal property exceeded $50, the claimed contract had to be shown by the writings themselves.

Issue

Did the appellants' letter, together with the respondent's telegram ordering 2,000 barrels, constitute a binding written contract for the sale of salt? More specifically, was the letter a definite offer or merely a solicitation of business and preliminary negotiation?

Rule

When the alleged contract must be evidenced by writing, the court must determine from the writings alone whether a contract exists and may not supply essential terms by parol evidence. A writing that is general in language and fairly construed as a business circular or advertisement inviting trade, rather than as an offer to sell to a particular person, is not a binding offer capable of acceptance by an order.

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

Red Mesa Produce, a wholesaler in Denver, mails Jordan Pike, a grocer in Santa Fe, a one-page circular stating: "We are prepared to furnish Idaho potatoes at $18 per sack, shipment next week, minimum 100 sacks. Excellent buying opportunity." Jordan immediately wires back, "Ship 600 sacks at once."

Did Jordan's wire create a binding contract?

Explanation. The majority rule is that a general business circular or advertisement stating prices and inviting trade is ordinarily only preliminary negotiation, not a binding offer. Here, the writing uses general promotional language and does not fairly commit the sender to sell Jordan any quantity he orders. The court in the case insisted that the writings themselves must show a contract, and this circular does not.