Mutual Assent & Offers

September 9th, 2019

Lucy v. Zehmer

Lucy v. Zehmer, 196 Va. 493, 84 S.E.2d 516, 1954 Va. LEXIS 244

Facts

P offered D $50k for a tract of land. D wrote out a short contract and signed it.

Procedural History

Unknown

Issue

Did the two parties make a real contract?

Was there mutual assent?

Holding

It was indeed a real contract. It must be performed.

Reasoning

The D was not so intoxicated to not remember all the events of the night (and the lawyers agreed under x-exam). There was no mention that the contract was in jest to the P until after the contract was signed. Whether or not the D privately held it was in jest did not matter.

Empro Mfg. Co. v. Ball-Co Mfg., Inc.

Empro Mfg. Co. v. Ball-Co Mfg., Inc., 870 F.2d 423, 1989 U.S. App. LEXIS 3992

Facts

P created a “Letter of Intent” to purchase D factory & land “subject to” terms being ironed out. There were several ways for P to walk away from the deal (incl. vote of shareholders and board). D did not like some of the terms, and tried to find other buyers.

P sued saying the “Letter of Intent” was binding and gave them sole discretion to buy.

Procedural History

District court ruled in favor of D.

Issue

Is the Letter of Intent binding?

Holding

Affirmed lower court

Reasoning

Nothing in the text said it was one-sided. P had many escape hatches that had nothing to do with the deal (see: shareholders), D would have the same right.

Q: Did this not have mutual assent because both parties didn’t have equal belief it was a contract?

Int’l Casings Group, Inc. v. Premium Std. Farms, Inc.

Int’l Casings Group, Inc. v. Premium Std. Farms, Inc., 358 F. Supp. 2d 863, 2005 U.S. Dist. LEXIS 3145, 56 U.C.C. Rep. Serv. 2d (Callaghan) 736

Facts

P & D had a protracted negotiation over terms.

Terms were complete on 6/21, pricing implemented as if it were signed on 6/24. 8/2 a new person supervised D’s plant, tried to get out of contract.

Procedural History

N/A: Preliminary injunction

Issue

Could this be a contract?

Holding

Motion granted

Reasoning

“Mutual manifestations of assent that are in themselves sufficient to make a contract will not be prevented from operating by the mere fact that parties also manifest an intention to prepare and adopt a written memorial thereof…” Restatement of the Law of Contracts Ch 3 § 26.

Both negotiators acted as official actors of their respective companies, and the companies acted as if the contract was complete— therefore it was (most likely) complete.

Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher

Joseph Martin, Jr., Delicatessen, Inc. v. Schumacher, 52 N.Y.2d 105, 417 N.E.2d 541, 436 N.Y.S.2d 247, 1981 N.Y. LEXIS 2110

Facts

A (Schumacher) leased a unit 5 years ago to R with an ability to extend 5 years “at annual rentals to be agreed upon”. R wanted to continue, A said it would be $900— R said that is crazy, here is a fair value. R brought suit.

Procedural History

Supreme Court, Suffolk County ruled for A Appellate court ruled for R

Issue

Without clear indications of what the rent should be, can the automatic extension be enforceable by the court?

Holding

Ruled for A (Schumacher). (Reversed appellate court, reinstated Sup. Court, Suffolk Co)

Reasoning

There was no methodology to determining rent in the contract, it was too vague. There was no recourse or anything in the contract to move forward to improve clarity.

Interstate Industries, Inc. v. Barclay Industries, Inc.

Interstate Industries, Inc. v. Barclay Industries, Inc., 540 F.2d 868, 1976 U.S. App. LEXIS 7431, 20 U.C.C. Rep. Serv. (Callaghan) 280

Facts

D sent a letter with price quotations to P for panels. P sent in two purchase orders. D said they could not provide the panels, P files complaint for breach of contract.

Procedural History

P filed in US District Court for the Northern District of Indiana

D motioned to dismiss for lack of personal jurisdiction (denied)

D motioned to reconsider (denied) but given permission to file an interlocutory appeal