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.
If A makes an offer in certain terms, and B, through a misunderstanding as to A's offer, accepts terms different from those offered, it is held in many jurisdictions that no contract exists, although each party may, for the time being, believe that the contract as understood by himself is in force.1 If the parties to a contract for the sale of land misunderstand each other as to the time when possession is to be taken under the contract, equity will not enforce specific performance.2 If through a misunderstanding in oral negotiations the buyer is making an offer for the purchase of two lots at a price which the seller thinks is the price of each lot separately and if the buyer prepares a deed in accordance with his understanding and the seller executes such deed without reading it over, and if he accepts the seller's check without examining it, equity will give relief because of such mistake, if notice of such mistake is given promptly by the seller to the buyer.3 If A offered to sell two lots at $2,500 each, and B understanding it to be $2,500 for the two, accepted,4 or if A makes an offer to B for $165, and B accepts, under-
7 Woldenberg v. Riphan, 166 Wis. 433, 166 N. W. 21.
1 Connecticut. Hartford, etc., R. R. v. Jackson, 24 Conn. 514, 63 Am. Dec. 177; Rowland v. Ry., 61 Conn. 103, 29 Am. St. Rep. 175, 23 Atl. 755.
Georgia. Werner v. Rawson, 89 Ga. 619, 15 S. E. 813.
Illinois. Rupley v. Daggett, 74 111. 351.
Maryland. Somerville v. Coppage, 101 Md. 519, 61 Atl. 318..
Minnesota. Bancharel v. Patterson, 64 Minn. 454, 67 N. W. 356.
Missouri. Norton v. Bohart, 105 Mo. 615, 16 S. W. 598.
Texas. Gulf, etc., Ry. v. Dawson (Tex. Civ. App.), 24 S. W. 666.
2 Somerville v. Coppage, 101 Md. 519, 61 Atl. 318.
3 Werner v. Rawson, 89 Ga. 619, 15 S. E. 813.
4 The fact that A signed a deed and delivered it on receiving a check for $2,500 did not bring the case within the rule as to written contracts. See ch. LXIX. But A could not read without his glasses, and he was carrying something in each hand. He put the check into his hat, walked over to the bank to get it cashed, and on learning the amount, returned it within fifteen minstanding the offer to be $65,5 or A makes an offer of sale to B for $850, and B accepts, thinking that the offer is for $750,6 or where A asks the freight to a given station X, and the agent of the railroad understands that the station in question is Y, and gives a rate to T, which is six dollars less than the rate to X,7 or where A asks the rate for a carload of melons and grapes, and the agent of the railroad company understands that the car is to contain melons and vegetables, and accordingly gives a lower rate,8 or where A asks the price for transporting five hundred bundles of lath, and B, the agent of the carrier, understands that only one hundred bundles of lath are to be transported, and gives him a rate accordingly,9 no contract exists.
Since no contract exists, the one party can not have the written contract made in accordance with the supposed oral contract reformed so as to express his own understanding;10 nor can he have specific performance of the contract as he understood it,11 but rescission may be had.12 If each party can be placed in statu quo, rescission is the only remedy where the contract is performed by one party in whole or in part.13 If the parties can not be placed in statu quo, the one who has received property or services of value must pay a reasonable compensation therefor, irrespective of what his understanding of the terms was.14 Thus where under a misunderstanding as to freight rates, a railroad transports goods for A, A must pay a reasonable price therefor, though higher than the rate which A understood.15 In other cases the principle which applies to written offers16 has been applied to oral offers where the offer was madSec. in such a way that the ordinarily reasonable and prudent man would have understood it, and where the offeror believed that the offeree understood, and acted in such belief; and the contract as made by such offer and acceptance has been held to be valid in spite of such mistake.17 If an offer by telephone is repeated to the offeror as it is received by the offeree, and the offeror assents thereto and sends a written acceptance of "your proposition of this date," the offeror is bound by the form of the offer as thus repeated to him, at least after the adversary party has altered his position in reliance on such contract.18 If a shipper states the value of his goods correctly and the carrier misunderstands him and quotes a rate on a lower valuation, the shipper is not bound by such lower valuation if he is free from fault and acts in good faith.19 If A offers money in compromise of a disputed claim and B could have understood the terms of A's offer by the use of due care, B can not avoid such contract after acceptance of such payment under such offer.20 If A misunderstands an oral agreement with B through the fraud of X, who was not B's agent, A can not avoid such contract after B has altered his position in reliance thereon.21 If A has attached X's property and agrees to dismiss such attachment in consideration of B's assigning to A a deposit in a savings bank as security for A's claim against X, and B assigns such deposit as acceptance, B can not avoid such assignment on the ground that he could not speak English and that X had told B that such assignment was for a smaller amount and for a different purpose.22
Utes after he received it, took back the deed and destroyed it: Werner v. Rawson, 80 Ga. 610, 15 S. E. 813.
5 Rupley v. Daggett, 74 111. 351.
6 Rovegno v. Defferari, 40 Cal. 459.
7 Rowland v. Ry., 61 Conn. 103, 29 Am. St. Rep. 175, 23 Atl. 755.
8 Gulf, etc., Ry. v. Dawson (Tex. Civ. App.), 24 S. W. 566.
9 Hartford, etc., R. R. v. Jackson, 24 Conn. 514, 63 Am. Dec. 177.
10 Bancharel v. Patterson, 64 Minn. 454, 67 N. W. 356.
11 Windust v. Sutton, 54 Wash. 340, 103 Ac. 10.
12 Werner v. Rawson, 89 Ga. 619, 15 S. E. 813; Baneharel v. Patterson, 64 Minn. 454, 67 N. W. 356.
13 Norton v. Bohart, 105 Mo. 615, 16 S. W. 598.
14 Rowland v. Ry., 61 Conn. 103, 29 Am. St. Rep. 175, 23 Atl. 755; Gulf, etc., Ry. v. Dawson (Tex. Civ. App.), 24 S. W. 566.
15 Rowland v. Ry., 61 Conn. 103, 29 Am. St. Rep. 175, 23 Atl. 765. 16 See Sec. 270 et seq.
The fact that one party to an oral contract contends that a certain price was agreed upon, while the other party contends that a different price was agreed upon, does not establish mistake or misunderstanding as to the price.23 Which of the two parties is correct is a question of fact; but the court can not assume upon such evidence that no contract had been made.