Story Case

Whelpley and Keefe Brothers were negotiating by mail for the sale of a carload of brick. On February 3, 1915, Keefe Brothers made the following offer to Whelpley by mail:

"We will sell you the carload for $17.50 per thousand".

This reached Whelpley on the 4th and he immediately mailed an acceptance. On the evening of the 4th, Keefe Brothers telegraphed a revocation of the offer which was not received until after the acceptance was mailed. The acceptance reached Keefe Brothers in due course on the 5th.

Keefe Bros, refused to deliver the bricks, on the ground that they revoked the offer before it was accepted. Whelpley sued, however, claiming that the offer was accepted upon the mailing of the letter of acceptance ; and that, as soon as an offer is accepted, it becomes a contract and then can be terminated only by mutual consent. Which should win?

Ruling Court Case. The Boston & Maine Railway Company Vs. Bartlett, Volume 3 Cushing's Massachusetts Reports, Page 224

Bartlett was the owner of certain land, located in the city of Boston. On the first day of April, 1844, Bartlett, in writing, agreed to convey the land to the Boston & Maine Railway Company for the sum of $20,000, if the latter so desired and requested within thirty days from the date of the agreement. This agreement was extended thirty days from the first of May, under a similar offer. On the 29th day of May, while this offer was in force and unrevoked, the company elected to purchase the land at the price named. They notified Bartlett of their desire and offered him the money therefore. Bartlett, thereupon, stated that he had decided not to convey the land for that price, and refused to consider the offer. The company brought this action.

Bartlett contended that there was no consideration for his offer; and that an acceptance by the company, even before it was withdrawn, did not make a binding contract.

Decision

Although an offer, unsupported by a consideration, may be withdrawn by the person making it, at any time before it has been accepted; nevertheless, if it is accepted before it is withdrawn, the offer disappears and there results a binding contract between the parties. In this case, the offer was so accepted, and a binding contract resulted.

Mr. Justice Fletcher, in the course of his opinion, said: "In the present case, though the writing signed by the defendant was but an offer, and an offer which might be revoked, yet while it remained in force and unrevoked, it was a continuing offer during the time limited for acceptance; and, during the whole of that time, it was an offer every instant; but as soon as it was accepted, it ceased to be an offer merely and then ripened into a contract. When the offer was accepted, the minds of the parties met, and the contract was complete. There was then the meeting of the minds of the parties, which constitutes and is the definition of a contract".

Accordingly, judgment was given for the Boston & Maine Railway Company.

Ruling Law. Story Case Answer

An offer may terminate in several ways. It will terminate when the offeree accepts it; it then becomes merged into the contract. The offer and acceptance make the contract. If, then, the offer disappears when accepted, it follows, of course, that the offeror cannot thereafter revoke the offer.

Thus, in the Story Case, an acceptance of the offer of Keefe Brothers was made before he attempted to revoke it. Immediately upon acceptance, the offer merged into the contract, and therefore, could not be withdrawn by Keefe Brothers.