Standard Box Co. v. Mutual Biscuit Co.

California District Court of Appeal · Contracts

ContractsOption contractsParol evidenceDuressreasonable timeoptionacceptanceparol evidence rule

Facts

Plaintiff had supplied defendant with boxes and related items under a written 1905 contract, and during that contract plaintiff sent defendant a September 1, 1905 letter offering an option for one additional year beginning July 25, 1906, at the same prices and discount. The option letter did not state a deadline for acceptance, and defendant did not send a letter purporting to accept until July 25, 1906, about ten months later. Defendant sought to prove by parol that plaintiff had orally agreed, when giving the option, that defendant would have through July 25, 1906 to accept it, but the trial court excluded that evidence and the July 25 acceptance letter. After plaintiff later sold goods to defendant at prevailing market prices, defendant claimed offsets and counterclaims based on the alleged option contract and on asserted duress in paying higher prices.

Issue

Whether defendant could use contemporaneous parol evidence to show that it had one year to accept a written option that was silent as to time of acceptance. Also, whether defendant's payments for goods at market rates could support counterclaims on the theory that they were compelled by duress or by breach of the alleged option contract.

Rule

If a written offer or option is silent as to the time for acceptance, the law implies that acceptance must be communicated within a reasonable time, and that implied term is part of the written agreement and cannot be added to, varied, or contradicted by contemporaneous parol evidence fixing a specific longer time. Where no contract obligates a seller to furnish goods, the seller may demand market price, and a buyer's payment of that price to obtain needed goods is voluntary rather than duress absent unlawful confinement, unlawful detention of property, menace, or some other unlawful threat or exaction.

🔒

See the holding & full analysis

Create a free KwikCourt account to unlock the rest of this brief — and practice the case.

The court's holding and reasoning
Doctrine tests, pitfalls & exam hypotheticals
10 practice questions + 4 AI-graded essays on this case

Free sample · practice this case

Test yourself

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

In Portland, Oregon, Cedar Vale Printing sent Maya Ortiz of Rainhouse Foods a signed letter offering to supply custom cartons for a future six-month season at stated prices. The letter said nothing about when Maya had to accept, and she sent a written acceptance eight months later after carton prices had risen sharply.

Is Maya's acceptance likely effective?

Explanation. The majority held that where a written option is silent as to the time for acceptance, the law implies acceptance must be communicated within a reasonable time, and the court treats reasonable time as a question of law. A many-month delay was held too long as a matter of law. Thus the late acceptance here is ineffective. (Derived from Standard Box Co. v. Mutual Biscuit Co. (n.d.).)