Story Case

Prior to January, 1914, John Herman and James Malaney were negotiating with reference to the trade of Herman's automobile for a piano belonging to Malaney. During the last week of December, 1914, they had orally agreed upon terms. On the last day of the year, however, Herman said he was dissatisfied and negotiations were renewed. Finally, on January 2nd, terms were agreed upon and put in writing, but this writing was not signed by either party. It was agreed that the trade should be effective on January 10th. When that day came, Malaney refused to deliver the piano on the basis outlined in the writing, and demanded the terms originally laid down. Herman brought suit upon the writing, claiming that it was a written contract entered into by the parties, and therefore the oral terms originally stipulated could not be shown. Malaney maintained that this was not a written contract and, therefore, the entire negotiation could be put in evidence to show what the contract actually was. Which of the contending parties is correct ?

Ruling Court Case. Bracklin Vs. Waggerman, Volume 52 Illinois Re-Forts, Page 468

Bracklin, a building contractor, drew up a formal contract purporting to be between himself and Waggerman, by the terms of which Bracklin was to erect a building for Waggerman. Before this, however, Bracklin had furnished to Waggerman all the estimates for the erection of the building. After Bracklin had prepared the agreement in writing, he signed it and delivered the same to Waggerman. The latter took the written agreement and made many numerous and material changes therein, but never signed the same.

Bracklin began work on the building and, at that time, Waggerman told him that the estimates which had been furnished would govern in the construction of the building.

After Bracklin had finished the building, a disagreement arose between them as to the compensation to be paid therefor. Bracklin brought this action to recover what he understood was due him under their agreement. Waggerman then showed the written agreement, containing his alterations, but which was never signed by him. Bracklin argued that this agreement was not binding because it was never signed by Waggerman.

Decision

This contract, as drawn up by Bracklin, showed on its face that it was to be signed by both parties. It showed that it was not to be binding upon either until signed by both. As a general rule, it is not essential that a written contract should be signed by the parties. But if there is something which shows that they intended that it should be signed, it does not become a written contract until it is so signed. The estimates first furnished to Waggerman govern, rather than this unsigned agreement, because the contract consists of the estimates furnished by Bracklin and their oral acceptance by Waggerman when he said that these would govern in the construction of the building.

Accordingly, it was held that Bracklin could recover upon their oral agreement, and that he was not bound by the unsigned written agreement.

Ruling Law. Story Case Answer

Where persons reduce their contracts to writing, it may be stated as a general rule that such an agreement need not be signed. But if it appears from the agreement that it was contemplated that the agreement should be signed before it became binding upon either, obviously it must be signed.

In the Story Case, Herman properly brought suit upon a written contract. Although the parties did not sign the document, it was evident from the document itself that this writing included all the terms, and was meant to be the contract. Malaney cannot introduce the prior negotiations.