Owen v. Tunison

Maine Law Court · Contracts

ContractsOffer and AcceptanceReal Estate Contractsofferacceptancepreliminary negotiationsprice quotationreal estate sale

Facts

Plaintiff wrote defendant on October 23, 1929 asking whether defendant would sell his Bucksport store property for $6,000. Defendant replied on November 12, received by plaintiff on December 5, that because of improvements and expenditures, it would not be possible for him to sell unless he received $16,000 cash. Plaintiff immediately sent a telegram stating that he accepted defendant's offer for the Bradley Block at $16,000 cash and asked that the deed be sent to a bank in Bangor. Four days later, plaintiff was notified that defendant did not wish to sell, and plaintiff sued for damages.

Issue

Did defendant's letter stating that he could not sell the property unless he received $16,000 cash constitute a legal offer to sell, so that plaintiff's telegram created a binding contract by acceptance?

Rule

A binding contract for sale requires an actual offer or proposal of sale and an acceptance creating a meeting of the minds. A statement that property will not be sold for less than a stated amount, or that the owner could not sell unless he received a stated price, is not itself an outright offer to sell but may amount only to preliminary negotiation.

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

Lena Ortiz emailed Ravi Mehta from Portland, Maine asking whether he would sell a duplex he owned in Concord, New Hampshire for $280,000. Ravi replied, "With the renovations I've done, I could not let it go unless I received $365,000 cash." Lena immediately sent back, "I accept your offer for $365,000 cash and am ready to close."

If Lena sues for breach after Ravi refuses to sell, what is the strongest argument against contract formation?

Explanation. A binding contract requires an actual offer or proposal of sale and an acceptance creating a meeting of the minds. A response stating that the owner could not sell unless he received a stated amount is treated as preliminary negotiation or a statement of minimum acceptable price, not as a present commitment to sell. Because Ravi did not make an actual offer, Lena's attempted acceptance could not create a contract. (Derived from Owen v. Tunison (n.d.).)