Contracts Notes For Hannah 491h4a

CITATION:

International Filter Co v Conroe Gin, Ice & Light Co Commission of Appeals of Texas, 1925. 277 S.W. 631

PARTIES: Plaintiff: International Filter Co Defendant: Conroe Gin, Ice & Light Co CAUSE OF ACTION: breach of contract DEFENSE(s): No contract was made b/c (1) OK did not amount to approval or acceptance (2) notification of such approval, or acceptance, by IF was required to be communicated to Conroe Gin (D)

PROCEDURAL HISTORY: FACTS: The proposal document stated that it “becomes a contract when accepted by the purchaser and approved by an executive officer.” Defendant wrote “accepted” Feb. 10, 1920 and the notation “make shipment for Mar. 10″ and sent the proposal back to plaintiff. Plaintiff President wrote “O.K.” and the date and. his name on the document.

ISSUE(s): Whether the endorsement “O.K.” written on the paper by the President of the company was an “approval by an executive officer” as described in the proposal. Whether Plaintiff was required to give notice to Defendant of the “approval of the executive officer” in order to form the contract as contemplated.

RULES OF LAW: Form of the offer may require some final approval; however, it does not require notice to the other party of that approval unless the form expressly dictates that requirement. Court will construe meaning from the obvious meaning. HOLDING: The “OK” was an approval by the executive and that the paper then became a contract. The Court did not think it was essential that the approval by the executive be communicated to the defendant. The form of the offer did not show this was a requirement and to require it would be to change the obvious meaning of the language and change the “locus and time prescribed for meeting of the minds” contained in the offer. In any event, the subsequent confirmation letter would have sufficed as notice of the approval even though it was not expressly required. REASONING: The offeror has the power to express the and determine the acts which will constitute acceptance. Courts will construe those according to their plain meaning. Here,

the required executive approval but did not require the offered to give notice of the acceptance.

DISPOSITION:

COMMENTS: 2/10 - proposal from IF "for prompt acc" 2/10 - Con "accepted" - make shipment by Mar 10 <-- this is the offer 2/13 - IF endorsed "OK" 2/14 - IF writes "this will acknowledge & thank you" 2/28 - Conroe "Countermands" Conroe arguments: 1. IF didn't notify Conroe of its acceptance 2. No approval by exec. officer of IF Argument #2 - the person who "ok"'d it was Pres & VP - so it was approved by an exec officer - ridiculous argument that the court really doesn't address Argument #1 - IF didn't notify Conroe of its acceptance Conroe tried to establish that they were the offeror b/c IF reserved a say for themselves for being bound  Words don't matter - the test of whose court the ball is in does Conroe pointed to two places where this notification could have come from -> [court rejects this] ->Nature of the transaction  The proposal was drafted by IF but became the offer of Conroe - there was nothing in there that said you had to notify of acceptance. Nature of transaction - Conroe is stating they were not notified that the offer was accepted - that yes IF wrote it in his office, but he didn't share the information - the acceptance has to make its way back to them Wondertwin - the form of The ultimate step in the creation of a contract - ACCEPTANCE §50, and Corbin on p.156 The Offeror is the master of the offer - the Offeror has the power to determine how the offer is accepted. I offer you $500 to wash my car - if you want to accept - stand on your head for 5 second Offeror can alter all the default rules, but if you don't say then default rules kick in

What happens if the Offeror is silent about what shows acceptance  Default rules kick in o Default rule - rule that will govern unless you provide otherwise

Law of contracts is full of default rules Ways offeror empowers offeree to accept:  By completing performance that is sought Bilateral Contract - If you agree to mow my yard - execution 2 legal duties exist: 1. Pay him $50 2. Mow your yard Unilateral Contract - If you find my cat - performance 1. Pay him (he has already found the cat) Bi v Uni - how many duties remain at the time the contract is created. Don't confuse acceptance by performance and unilateral contract - they can accept by performance but it is still dependent on 2 duties remaining (ex. Pick up key if you accept - picked up key, but still needed to be paid and mow yard - 2 duties) True unilateral contracts are really rare - people usu. want assurance and once they have that they become bound and it is a bilateral contract

The offeror is the master of the offer - so the offeror gets to decide what the offeree has to do in order to get the contract: 1. Was he explicit in what he wanted him to do a. Can ask that offer be accepted by a promise - Bilateral i. Mow yard on Wed - pay you $50 ii. Refer back to when contract came into existence iii. Two legal duties remaining - duty to pay & perform b. Can ask that offer be accepted by performance - Unilateral i. Isn't going to be obliged to anyone until the cat is returned ii. Not bound until the cat is returned iii. One legal duty remaining - duty to pay

Hypo:   

Ill pay you $30 to mow my yard on Thursday - if you want to accept come over and get the key There is still obligation on each other's parts - pay and perform This is bilateral!!!

Many times will people will say bilateral - promise and unilateral - performance but that is not true!

Unilateral - absolute completion of performance Hypo - never finsihed Leave a note on kids bike If you mow my yard tomorrow I will pay you $20 He calls you back and says yes---> is this where the acceptance comes in? Wed morning you call him back and say forget it.  Was the person bound at the call back? Was it a valid acceptance? This is ambiguous - how should the offeree accept? Rsst §30 - anything that seems like a reasonable offer will suffice RSST §32 - accept either by promising to perform -or- performance, as the offeree chooses Default rule - in case of ambiguity - the offeree gets to choose promise or performance - any reasonable means of acceptance will suffice - any beginning of the performance will constitute as acceptance Leave a note: If you mow my yard I will pay you $30, let me know by noon the following day Kid just comes over and starts mowing before noon the next day  Are you bound to the kid? Yes, default rule kicks in because it isn't very clear Kid comes over and starts mowing - mows three strips & then stops. Old man goes out and starts waving his cane and said he is contractually bound - is he right?  Is the kid contractually bound to mow the yard?  Where is the wondertwins moment - when he starts mowing or when he stops mowing?  Kid is contractually bound §62 Because people don't speak in technical language - we have to have default rules when there is no clarity  Unless you are specific & clear - then the default rule of §32 will kick in § 62. (1) Where an offer invites an offeree to choose b/t acceptance by promise & acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance. (2) such an acceptance operates as a promise to render complete performance.