Story Case

The following advertisement appeared in the county paper for several days:

"I am looking for a buyer for my family horse, Bess. She is six years old, perfectly broken, and I trust my children behind her. Will sell for a reasonable price as I am leaving for Alaska.

James Tropper".

On the second day he received the following letter:

"I accept your offer in the county paper and I will pay $150 for Bess.

(Signed) Wm. J. Howe".

Mr. Tropper had previously offered the horse for sale at $100.00 but he decided to keep her until he returned' from Alaska. He wrote to Mr. Howe telling him of his decision and Mr. Howe immediately started suit for breach of contract.

Mr. Tropper defended the suit on the grounds that he had made no offer of sale to Howe.

Is the defense a valid one!

Ruling Court Case. Moulton Vs. Kershaw, Volume 59 Wisconsin Reports, Page 316

C. J. Kershaw was a wholesale dealer in salt, doing business in the city of Milwaukee. Moulton was a retail dealer in the same article in La Crosse. Sometime during the year of 1882, Kershaw wrote the following letter to Moulton:

"Milwaukee, Sept. 19, 1882. J. H. Moult on, Esq., La Crosse, Wis.

Dear Sir: In consequence of a rupture in the salt trade,we are authorized to offer Michigan fine salt, in full carload lots of eighty to ninety bbls., delivered at your city, at 85c per bbl. At this price it is a bargain, as the price in general remains unchanged. Shall be pleased to receive your order.

Yours truly, C. J. KERSHAW".

On the following day, Moulton sent a telegram to Kershaw in which he requested a shipment of 2,000 barrels at the price mentioned in the letter above given. "When Kershaw received the letter he had decided not to sell the salt at that price. Moulton then brought this action for damages. He contended that the letter he received from Kershaw was an offer to sell at the price mentioned and that his acceptance made a binding contract. But Kershaw argued that his letter was not an offer, but was only a method of advertising; a means of apprising the public that they were willing and ready to receive offers.

Decision

It is a fundamental principle that one of the contracting parties must make an offer in some manner, which must be accepted by the other party, before a binding contract results. An offer must be an unequivocal willingness on the part of one making it that his statements are to be considered as offers. Negotiations by which he advertises his willingness to receive an offer is a different thing. In this case, Kershaw was merely holding out that he was in a position to receive offers; he was not making an offer at that time. Consequently, the acceptance of Moulton did not make a contract because there was no offer.

Mr. Justice Tyler said in part: "The language in Kershaw's letter is not such as a business man would use in making an offer to sell to an individual, a definite amount of property. The word "sell" is not used. They say "We are authorized to offer Michigan fine salt, etc.," and volunteer an opinion that the terms stated constitute a bargain. They do not say we offer to sell you. They use general language proper to be addressed generally to those who were interested in the salt trade. It is clearly in the nature of an advertisement or business circular to attract the attention of those interested in that business to the fact that a good bargain in salt could be had by applying to them, and not as an offer by which they were to be bound, if accepted for any amount the persons to whom it was addressed might see fit to order".

It was therefore decided that there was no offer. Therefore no contract resulted and judgment was given for Kershaw, the defendant.

Ruling Law. Story Case Answer

It is a fundamental principle of the law of contracts that the relation is one voluntary assumed. The law does not impose this relation upon parties without their consent, either express or implied. The first step in arriving at a mutual agreement between the parties to contract is the expression of a willingness on the part of one to be bound by the contract. The expression of this willingness to be bound is what the law terms an "offer." Before a contract can be made one party must always take an offer, either expressly or by implication. He must in some way manifest his desire and willingness to assume a relation with another party whereby he is bound to such party.

It is not always easy to determine whether a person has manifested this willingness to be bound; or to state it otherwise, it is sometimes very difficult to tell whether a person has made an offer.

Negotiations by one party with another do not always constitute an offer. For example, one person may advertise his business, stating that he is engaged in selling. These statements only inform the public that he is in a position to make proposals but do not constitute an actual offer.

Thus, in the Story Case, Mr. Tropper announced only that he was willing to receive offers for Bess. The fact that he put no definite price on her is almost conclusive that he made no offer of sale. Therefore, there was no contract and his defense is good.