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Newman v. Schiff

United States Court of Appeals for the Eighth Circuit · 1985 · Contracts
778 F.2d 460 (8th Cir. 1985)
Updated
ContractsOffer and AcceptanceReward OffersMutual AssentRatificationobjective assentrewardpublic offer

Facts

On a live CBS Nightwatch broadcast, Schiff stated that if anybody called the show and cited any section of the Internal Revenue Code saying an individual is required to file a tax return, he would pay $100,000. Newman did not see the live program, but later saw a two-minute CBS Morning News rebroadcast that included Schiff's reward statement. After researching the issue, Newman called CBS Morning News the next day, cited several Code sections, and followed up by letter claiming he had performed the requested consideration. Schiff later denied liability, and Newman brought this breach of contract action.

Issue

Did Schiff's statement in the CBS Morning News rebroadcast constitute a renewed or extended offer that Newman could accept, or was the only offer the original Nightwatch offer, which Newman never accepted according to its terms?

Rule

Contract formation requires mutual assent judged primarily by an objective standard focusing on outward expressions. An offer is a manifestation of willingness to enter into a bargain that justifies another person in understanding that assent is invited and will conclude it; a public reward offer is enforceable only when accepted according to its terms, and the offeror may limit the time and manner of acceptance. Ratification authorizes an otherwise unauthorized act, but it cannot give legal effect to an act that was a nullity from the start.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.
During a live late-night call-in program broadcast from Chicago, Nolan Price says on air, "If anyone calls this show before we go off the air tonight and names the state statute requiring apartment owners to provide heat, I'll pay $25,000." Maya Chen hears a clipped replay of that statement on a breakfast news program the next morning and emails the station with the correct statute.

Is Nolan contractually obligated to pay Maya?

Explanation. Contract formation requires objective mutual assent. A reward offer is enforceable only if accepted according to its terms, and the offeror is the master of the offer. Here, "calls this show before we go off the air tonight" objectively limits both the manner and time of acceptance. A later news replay does not itself renew or extend the expired offer unless it objectively manifests a new offer.