This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
9 England. Ridgway v. Wharton, 6 H. L. Cas. 238; Winn v. Bull, L. R. 7 Ch. D. 29; Watson v. McCallum, 87 Law T. 547.
United States. Couch v. McCoy, 138 Fed. 696. Alabama. Hodges v. Sublett, 91 Ala.
588, 8 So. 800; Graham v. Caperton, 176 Ala. 116, 57 So. 741.
California. Pacific, etc., Co. v. R. R., 90 Cal. 627, 27 Ac. 525; Spinney v. Downing, 108 Cal. 666, 41 Ac. 797; Las Palmas Winery & Distillery v. Garrett, 167 Cal. 397, 139 Ac. 1077; Mercantile Trust Co. v. Sunset Road Oil Co., 176 Cal. 461, 168 Ac. 1037. District of Columbia. Webb v. Jan-ney, 9 D. C. App. 41.
Florida. Hinote v. Brigman, 44 Fla.
589, 33 So. 303; McCrimmon v. Brund-age, 53 Fla. 478, 43 So. 431; Ocala Cooperage Co. v. Cooperage Co., 59 Fla. 390, 394, 52 So. 13; Strong & Trowbridge Co. v. Baars, 60 Fla. 253, 54 So. 92.
Georgia. Barnes Cycle Co. v. Scho-field, 111 Ga. 880, 36 S. E. 965.
Illinois. Dreiske v. Joseph N. Eisen-droth Co., 214 111. 199, 73 N. E. 379; Scott v. Fowler, 227 111. 104, 81 N. E. 34 [affirming Scott v. Fowler, 130 111. App. 172].
Iowa. Weitz v. Des Moines, etc., District, 79 la. 423, 44 N. W. 696; Lynn v. Richardson, 151 la. 284, 130 N. W. 1097; Alexandria Billard Co. v. Miloslowsky, 167 la. 395, 149 N. W. 504.
Kentucky. Tucker v. Sheeran, 155 Ky. 670, 160 S. W. 176.
Louisiana. Ferre Canal Co. v. Bur-gin, 106 La. 309, 30 So. 863; Kaplan v. Whitworth, 116 La. 337, 40 So. 723; Barrelli v. Wehrli, 121 La. 540, 46 So. 620.
Maine. Mississippi, etc., Co. v. Swift, 86 Me. 248, 41 Am. St. Rep. 545, 29 Atl. 1063.
Massachusetts. Edge Moor, etc., Works v. Bristol County, 170 Mass. 528, 49 N. E. 918.
Minnesota. Starkey v. Minneapolis, 19 Minn. 203.
Missouri. Eads v. Carondelet, 42 Mo. 113.
Montana. Hogan v. Shields, 20 Mont. 438, 52 Ac. 55.
Nebraska. Irish v. Pulliam, 32 Neb. 24, 48 N. W. 963.
New Jersey. Donnelly v. Hardware Co., 66 N. J. L. 388, 49 Atl. 428; Jersey, etc., Commissioners v. Brown, 32 N. J. L. 504.
New York. Wood v. Edwards, 19 Johns. (N. Y.) 205.
North Carolina. Elks v. North State Ins. Co., 159 N. Car. 619, 75 S. E. 808.
Oklahoma. Western Roofing Tile Co. v. Jones, 26 Okla. 209, 109 Ac. 225.
Oregon. Williams v. Burdick, 63 Or. 41 at 49, 126 Ac. 603 [denying rehearing 63 Or. 41, 125 Ac. 844].
Vermont. Congdon v. Darcy, 46 Vt. 478.
Virginia. Adams v. Hazen, - Va. - , 96 S. E. 741.
Washington. McDonnell v. Coeur D'Alene Lumber Co., 56 Wash. 495, 106 Ac. 135.
10 Scott v. Fowler, 227 111. 104, 81 N. E. 34 [affirming Scott v. Fowler, 130 111. App. 172]; Kaplan v. Whitworth, 116 La. 337, 40 So. 723; Barrelli v. Wehrli, 121 La. 540, 46 So. 620.
parties.11 If a contract for insurance provides that the risk shall not attach until the policy is issued and delivered, such contract does not take effect until the policy is issued and delivered, even though all the terms of the contract have been agreed upon and though the first premium has been paid.12 If the proposals of different contractors contemplate a formal written agreement, the act of awarding the work to one of the contractors is neither a contract nor a contract to make a contract.13 This is especially true in public contracts which are required to be in writing.14 So where the act of Congress required all contracts made by the commissioners of the District of Columbia to be copied into a book for that purpose and signed by the commissioners, a memorandum on the minutes of the commissioners of the appointment of a referee was not a contract;15 and where the bidder for printing knows that a formal written contract is required under the power given by the legislature to a joint committee the oral acceptance of his bid and awarding him the contract is not a valid contract.16 If the statute does not require a written contract, acceptance of a bid may make a complete contract.17
This principle often overlaps another, already stated,18 and in some of the foregoing cases the oral agreement is purely preliminary, certain terms being left open for future negotiation and possible modification. In such cases the oral agreement is, of course, of no validity.19
11 Clarke Bros. v. McNatt, 132 Ga. 610, 64 S. E. 795.
12 Chamberlain v. Prudential Ins. Co., 109 Wis. 4, 83 Am. St. Rep. 851, 85 N. W. 128; Summers v. Mutual Life Ins. Co., 12 Wyom. 369, 109 Am. St. Rep. 992, 75 Ac. 937.
13 Massachusetts. Edge Moor Bridge Works v. Bristol County, 170 Mass. 528, 49 N. E. 918.
Michigan. Central Bitulithic Paving Co. v. Highland Park, 164 Mich. 223, 129 N. W. 46.
Montana. Hogan v. Shields, 20 Mont. 438, 52 Ac. 55.
New York. Kayser v. Arnold, 124 N. Y. 674, 27 N. E. 360.
Virginia. Adams v. Hazen, - Va. - , 96 S. E. 741.
Washington. Megrath v. Gilmore, 10
Wash. 339, 39 Ac. 131; Stanton v. Dennis, 64 Wash. 85, 116 Ac. 650.
14 Haldane v. United States, 69 Fed. 819, 16 C. C. A. 447; Edge Moor Bridge Works v. Bristol County, 170 Mass. 528, 49 N. E. 918; Capital Print-ing Co. v. Hoey, 124 N. Car. 767, 33 S. E. 160; Hughes v. Clyde, 41 O. S. 339; State, exrel., v. Board of Public Service, 81 O. S. 218, 90 N. E. 389.
15 District of Columbia v. Bailey, 171 U. S. 161, 43 L. ed. 118.
16 Capital Printing Co. v. Hoey, 124 N. Car. 767, 33 S. E. 160.
17 Highland County v. Rhoades, 26 O. S. 411.
18 See Sec. 27.
19 Alabama. Bissenger v. Prince, 117 Ala. 480, 23 So. 67 (where the contractors were informed that they should
Whether the oral negotiations or informal letters and telegrams which show that a written contract is contemplated, are intended to take effect at once, or not to take effect until such written contract is executed, depends on the intention of the parties as ascertained from the language used and from the surrounding facts and circumstances.20 The courts have not agreed as to the effect of provisions for written contracts. If an oral or informal proposition is accepted orally or informally, the fact that the acceptance contains a statement that a written contract will be forwarded, does not render such acceptance conditional, or add a new term thereto.21 A telegram, "accept * * mailing contract," is an unconditional acceptance and does not incorporate the written contract thus mailed into the acceptance so as to add to such telegram, terms which prevent the so-called acceptance from completing the contract.22 A telegram, "Letter received: Will accept conditions. If satisfactory, answer and will forward contract," has been held to be an unconditional acceptance, leaving no terms open for future negotiations; and it is held that such contract takes effect at once, although no formal written contract is ever executed, the parties not being able to agree upon the terms to be inserted therein.23 An offer by telegraph which is accepted by telegraph as follows: "Night letter received will accept send contract signed at once," creates a contract at once; and the formation of such contract is not postponed until the written contract is executed.24 If an offer provided, "if this is agreed to, the contract can be drawn up and signed," it was held that such offer did not call for formal contract, but gave the promisee the option to demand one.25 have the contract before the character of the building was definitely determined).
California. Pacific, etc., Co. v. Riverside, etc., Co., 90 Cal. 627, 27 Ac. 525 (where the purchaser was to examine the title).
Florida. Strong & Trowbridge Co. v. Baars, 60 Fla. 253, 54 So. 92.
Kentucky. Cincinnati Equipment Co. v. Big Muddy River Consol. Coal Co., 158 Ky. 247, 164 S. W. 794.
New Jersey. Donnelly v. Currie Hardware Co., 66 N. J. L. 388, 49 Atl. 428.
20 See ch. LXIII.
21 Skeen v. Ellis, 105 Ark. 513, 152 S. W. 153; Sanders v. Pottlitzer Bros. Fruit Co., 144 N. Y. 209, 43 Am. St. Rep. 757, 29 L. R. A. 431, 39 N. E. 75; Williams v. Burdick, 63 Or. 41,
125 Ac. 844 [rehearing denied, 63 Or. 41, 126 Ac. 603]. See Sec. 168 et seq.
22 Williams v. Burdick, 63 Or. 41, 125 Ac. 844 [rehearing denied, 63 Or. 41,
126 Ac. 603].
23 Sanders v. Pottlitzer Bros. Fruit Co., 144 N. Y. 209, 43 Am. St. Rep. 757, 29 L. R. A. 431, 39 N. E. 75.
24 Billings v. Wilby, 175 N. Car. 571, 96 S. E. 50.
25 Allen v. Chouteau, 102 Mo. 309, 14 8. W. 869. An acceptance by telegraph,
A statement in a telegram of acceptance to the effect that a written contract would be forwarded, was said to imply that the details of the contract were still to be settled; but in this case the so-called acceptance contained a term which did not appear in the offer.27 An attempted acceptance, "subject to written contract," has been held to be insufficient, but to leave certain terms open for future negotiations.28 A cablegram which reads like acceptance, but adds "contract mailed," is not an acceptance.29 An attempted acceptance, "accepted, contract to be drawn in accordance with the above proposition or bid. This is about right and will be satisfactory to" the corporation to which the offer was made, was held invalid.30 It may be suggested that if the provision for a written contract is found in the acceptance, it may prevent a contract from existing, even though it was not intended to postpone the operation of the contract until it was reduced to writing.31 If the offer makes no provision for a written contract, an acceptance which is conditioned upon the ultimate reduction of such contract to writing adds a new term, even if it conforms to the offer in every other respect.
If the provision in the acceptance for a written contract is merely optional with the offeror, such provision does not prevent a contract from existing.32 A clause in a letter of acceptance, "we would also suggest that you forward us contract to cover these plugs in question so there will be no misunderstanding in the future,"33 does not prevent such letter of acceptance from taking effect and completing the contract.
If A promised B to begin work before the written contract is executed, and if B permits A to continue work when A refuses to sign the written contract, it is said that the provision requiring a written contract is waived and that A may recover upon the oral contract.34
"Letter received; offer accepted; writing," was held valid, though no writing was sent: Dalrymple v. Scott, 19 Ont. App. 477.
26 Adams v. Hazen. - Va. - , 96 S. E. 741.
27 Jacob Johnson Fish Co. v. Hawley, 150 Wis. 578, 137 N. W. 773.
28 Glenn v. S. Birch & Sons Const. Co., 52 Mont. 414, 158 Ac. 834.
29 Runyon v. Wilkinson, etc., Co., 57 N. J. L. 420, 31 Atl. 390.
30 Sparks v. Pittsburg Co., 159 Pa. St. 295, 28 Atl. 152.
31 See Sec. 171.
32 Mercer Electric Mfg. Co. v. Connecticut Electric Mfg. Co., 87 Conn. 091, 89 Atl. 909.
33 Mercer Electric Mfg. Co. v. Connecticut Electric Mfg. Co., 87 Conn. 691, 89 Atl. 909.
34 Hart v. Tremont Lumber Co., 131 La. 847, 60 So. 368.
If the parties to a contract have agreed that it shall be reduced to writing and executed in duplicate before it takes effect, and one of the parties signs it and sends it to the other, who signs it and returns it, the loss of such contract in the mail will not prevent its existence; although the burden rests upon the party who claims to have signed it and returned it.35