In every contract, there must be an offer and an acceptance thereof.
Offer and acceptance are essential to contract. That is, there must be, as the courts say, a meeting of the minds. It is true that in some instances we may hold parties to a contract although their minds have not absolutely met on every point, as where one party has not read his contract. And some educators have criticized the statement that there must be a "meeting of minds." But the criticism does not seem sound from a practical standpoint. It is true, as a general proposition, that in every contract there must be an offer, complete enough to result in obligation, either by its express terms or by its implications, and an acceptance of that offer consisting in an agreement with it on every term. If, in any particular case, we hold a person to a term to which he claims he has not in reality assented, as for instance, that he was ignorant of a custom which we must charge him with as entering into the contract, or because he has not read the contract, we do so upon the theory that he must be charged with the knowledge of those terms, Whether in fact he knew them or not. This may be a fiction, but it is a fiction necessary to any reasonable and workable rule. In the same way we are not concerned with a person's secret thoughts, where he claims they were different from what the party with whom he was contracting was entitled to believe them from the words used or acts done by him.
With these explanations we may say that the rule is that in every contract, one party must make a definite offer, intended as such when judged by usual standards of interpretation, complete and definite enough to be enforceable against him if accepted, and the party to whom the offer is made must accept the offer as made, that is, without qualifications, (if he does qualify it, he thereby makes a counter offer which the original offeror may accept).
The party who makes an offer is called an "Offeror," the party to whom it is made is called the "Offeree." An offeree may be, (and usually is), a definite person or persons, or may be any person or persons in a class, as an offer to anyone who will secure a certain number of subscriptions to a newspaper.
B. What Constitutes Offer.
There is no contract where the offer is not communicated to the offeree.
Cases occur in which an offer is made, and then the person who would have accepted the offer does the very thing that the offer calls for yet without knowledge of the offer; there is no contract.
Example 12. A offers a public reward to any one who will furnish information as to the whereabouts of an accused person. B, ignorant of the reward, furnishes him such information. He is not entitled to the reward, as he did not act in response thereto, what he did he would have done had there been no reward.21
Though an offer is framed, offeree cannot accept it if it lacks utterance or delivery to him.
Clearly an offer is not legally made, even if put in final form, unless it is uttered to or delivered to offeree. We all know of cases in which letters are written, and even signed, but not sent. The final act of delivery is essential to the offer, otherwise it is not an offer.
Example 13. A writes a letter to the janitor of the building, explaining that he has lost a ring about the premises and offering a certain reward to the janitor if he will find the ring. He signs this letter and leaves it on his desk intending to think it over before he delivers it in the morning. The janitor sees it on the desk and reads it. Whether this is an offer would depend on whether the letter were left in such a way that the janitor would be entitled to suppose it was meant to be read by him.
Example 14. A tells B he will give C $200.00 for his horse Dick. B tells this to C. Here is no offer unless A intended B to tell C, or unless B were C's agent for that purpose.
Example 15. The Board of Directors of the X Corporation vote to offer a reward for certain information.
21. Broadnax v. Ledbetter, 100 Tex. 375.
The X Corporation does not, however, offer the reward. A learns of the vote and furnishes the information. There is no contract, for the offer lacked delivery.22
Announcements made in a preliminary way, in the nature of advertisements meant to attract trade are not offers and cannot be accepted. Responses to them are the offers which the original announcer can accept or reject as he chooses.
Cases frequently arise in which a person claims that a contract is complete because he has ordered goods or taken some action in response to a proposition which the proposer claims was not intended as an offer, but as a mere advertisement or preliminary proposition intended to invite offers. Whether such a proposition is an offer or not, depends of course on the construction that the alleged acceptor would be entitled to place on it, according to reasonable rules of interpretation.
Example 16. The Johnson Company, a manufacturer of firearms, selling only to jobbers, sent out a circular letter to its prospective customers, setting forth the terms upon which revolvers would be sold to the jobbing trade. Ward, having received the letter, sent in an order for revolvers. This is not a contract without acceptance by The Johnson Company, as the circular letter was not an offer.23
It is very clear that circular letters are not intended as offers, even if they contain the phrase, "We offer," and even if there is no reservation of right to reject. It is wise business policy to include in any such letter a statement that the right to reject orders is reserved, for that may save a lawsuit, but such letters are clearly not offers.
22. See Sears v. Kings Co. El. Co., a L. R. A. (Mass.), 117.
23. Montgomery Ward & Co. v. Johnson, 209 Mass. 89.
If the letter is by one person to another, it may still have the nature of a circular letter, even though of a definite nature, if, by its terminology it suggests that it is such a letter as may have been sent generally to other customers, whether in fact it has been or not. Thus, a statement by a merchant that he has on hand a quantity of material which he is offering at certain prices and on certain terms is not an offer.
Example 17. Harsh wrote Nebraska Seed Company, "I have about 1800 bushels of millet seed, of which I am mailing you a sample. This millet is recleaned and was grown on sod and is good seed. I want $2.25 per cwt. for this seed, f. o. b. Lowell." Held, not an offer and an attempted acceptance would not complete a contract. The court said, "The language used is general and such as may be used in an advertisement or circular addressed generally to those engaged in the seed business, and is not an offer by which he may be bound, if accepted, by any and all persons addressed." 24
It is very clear, however, that there may be cases of this sort where it is very hard to draw the line. It took a Supreme Court decision to convince the loser in the above example, and the winner would have saved his trouble if he had put a reservation in the letter. But, of course, if one really intends an offer, he would not care to put in such reservation.
24. Harsh v. Nebraska Seed Co., L. R. A. 1915 F. 824 (Nebr.).
On the other hand, if one party makes a definite proposition to another in terms the reasonable construction of which indicates an offer, an acceptance thereof completes the contract and the offeror is bound.
Advertisements in public newspapers or by public announcement of any sort may or may not be offers according to how the same are worded. Thus advertisements of rewards are clearly offers to those who will do what is called for, but advertisements of goods for sale or of sales to be held are not offers.
Catalogues are generally not offers, as catalogues sent out by mail order houses and the like. They are in the nature of circular letters. But catalogues may contain offers. So in fact may circular letters, if that is the reasonable construction of them, as where they offer a reward.25
If the proposition is too indefinite to be enforceable, if accepted it is clearly not an offer, even though intended as such.
A proposition, although intended as such, may be either too indefinite or too incomplete to constitute an offer. An offer must be definite enough so that a contract may be made out of it by the mere reply, "I accept." In other words it must be definite enough and complete enough to be enforceable.
Example 18. A offers B 100 acres of land, if B will work for him until B's marriage. B accepts and performs. A's promise is unenforceable because "100 acres of land" is too indefinite. It may mean fertile or barren land, improved or unimproved land, valuable or poor land.26
25. Bank v. Griffin, 66 111. Ap. 577.
26. Sherman v. Kitsmiller, 17 S. & R. (Pa.) 45.
Example 19. A promise by an oil dealer to sell oil on favorable terms so that the buyer could compete successfully with other parties selling in the same territory is too indefinite to constitute an offer.27
If the propo sition, although definite enough to be an offer, so far as stated, is incomplete in its terms, it is not an offer; but where by fair interpretation the terms alleged to be lacking were meant to be implied, the offer may thereby be rendered complete.
The alleged offer must be of sufficient completeness to constitute a valid offer. This is of course very closely connected with the subject matter of the last section, but here we refer to those cases in which the offer as far as it goes is definite enough, but it omits details that are essential to make it complete, as an offer to sell a certain farm, no price being stated. Clearly there is no offer here that an acceptance can turn into a contract.
But another consideration presents itself in these cases. It is a .very common occurrence to have terms' included in an offer by implication, provided, the implication is a reasonable one to make under the circumstances. In the case supposed above of the sale of the farm no terms as to price could be implied, but if one orders goods stating no price and they have a market value, it is to be assumed that he intends to pay the prevailing prices. By reasonable construction, the price is a part of his offer.
Contracts which may be reduced to certainty by reference to events stipulated in the contract are good, as sales for future market prices.
27. Marble v. Standard Oil Co., 169 Mass. 553.