Story Case

Mr. Judson owned a large farm in southern Illinois. He decided that he would discontinue his farming and move to Chicago, if he could dispose of his property. He told a neighbor, Mr. Jones, of his intention and offered to sell him his farm for $10,000. Mr. Jones also owned a farm, but it was less valuable than the one belonging to Mr. Judson. In reply to the offer of Mr. Judson he wrote him this letter:

"My dear Mr. Judson:

I would like very much to own your farm, but at present I cannot accept your offer. If I am able to sell my farm for a good price in the near future. I will buy yours, unless you have sold it in the meantime.

Respectfully, J. W. Jones".

Some months later Mr. Jones sold his farm for a very good price; when Mr. Judson heard of the sale, he went immediately to Mr. Jones and requested him to purchase the farm according to his agreement. Mr. Jones replied that he had concluded that he would not buy another farm. Thereupon, Mr. Judson brought an action against Jones for breach of a contract.

What should the court hold in this case ?

Ruling Court Case. Stagg Vs. Compton, Volume 81 Indiana Reports, Page 171

In this case the plaintiff Stagg had a horse which he desired to sell. When he heard that the defendant wished to purchase a horse, he wrote a letter, offering to sell the animal in question to the defendant for $200.

The defendant some days later wrote the following letter in reply to the plaintiff's letter:

"I think I might purchase your horse at $200, the price you ask me. How can I get it? I desire it at once if it will suit me; I am quite certain it will. Please reply at once, and oblige,

Yours truly,

A. B. Compton".

In an action brought for the price of the horse, the question was whether the foregoing constituted a written contract for the sale of the animal in question.

Decision

Those two letters in themselves do not make a written contract between the parties. The offer of the plaintiff was to sell unconditionally. But the defendant did not accept absolutely. He said only that he might purchase the animal, in case it suited him. Since there was no meeting of their minds, the two letters, recited above, did not make a contract between them.

Therefore it was held that there was no written contract for the sale of a horse.

Exiling Law. Story Case Answer

A contract is a relation which is voluntarily assumed by the parties to it. A contractual obligation, speaking of a contract in a strict sense, is never imposed upon a person without his consent. Thus it is a fundamental essential of a contract that there be mutual assent between the contracting parties.

If one party to an agreement is thinking of one thing, and the other is thinking of something else, obviously there is no contract, because their minds have never met upon a common basis. There is no mutual assent.

Again, the parties may understand clearly all the terms of a proposed agreement, but one party may be unwilling at that time to give his binding consent, notwithstanding the fact that he desires to enter the agreement at a future time or makes a favorable remark thereto. But unless he unequivocally and unconditionally assents, mutual assent is lacking and no contract results.

In the Story Case, mutual assent is lacking because Mr. Jones does not agree to the offer made by Jud-son. In fact he clearly states that there is no acceptance. It is obvious that Judson is not obligated to hold the farm for Jones, and that mutuality of contract is lacking. Therefore judgment should be given in favor of Jones.