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.
An offer made in jest and known to be made in jest by the party accepting it, can not be the basis of any legal liability.1 Thus a marriage ceremony intended by both parties as a jest,2 or the giving of a check for three hundred dollars for a watch worth fifteen, both parties intending the transaction as a joke and neither intending a sale of the watch,3 or a promise to pay forty dollars for a cow which was worth less than fifteen dollars, if known to the offeree to be intended as a joke,4 or a promise to sell twenty thousand barrels of flour considerably below the market price, if made by a small retail dealer without the means to perform such contract, and if such transaction was intended as a mere "bluff," and known to the adversary party to be thus intended,5 are without legal effect.
2 State, exrel., v. Steel, 121 La. 215, 16 L. R. A. (N.S.) 1004, 46 So. 215.
3 Hicks Printing Co. v. Wisconsin Central Ry., 188 Wis. 584, 120 N. W. 512.
4 Wolfe v. Humboldt County, 36 Nev. 26, 45 L. R. A. (N.S.) 762, 131 Ac. 964.
5 Proctor v. Hobart M. Cable Co., 145 Mich. 503, 108 N. W. 992.
6 Shriner v. Craft, 166 Ala. 146, 28 L. R. A. (N.S.) 450, 51 So. 884.
7 Exchange National Bank v. Pant ages, 74 Wash. 481, 46 L. R. A. (N.S.) 484, 133 Ac. 1025.
8 Abrohams v. Revillon Freres, 129 Wis. 235, 107 N. W. 656.
1 Australia. Nyulasy v. Rowan, 17 Vict L. R. 663.
Michigan. Keller v. Holderman, 11 Mich. 248, 83 Am. Dec. 737.
New Jersey. McClurg v. Terry, 21 N. J. Eq. 225.
Pennsylvania. Theiss v. Weiss, 166 Pa. St. 9, 31 Atl. 63.
Vermont. Bruce v. Bishop, 43 Vt. 159.
2 McClurg v. Terry, 21 N. J. Eq. 225.
3 Keller v. Holderman, 11 Mich. 248, 83 Am. Dec. 737 (though the watch was not returned until the trial).
However, both parties must understand such a joke. An offer made in jest is enforceable by one who accepts it bona fide as a serious proposition.6 If A agrees to buy B's stock at a certain price within a certain time, and B accepts such offer, believing that A is in earnest, the fact that A makes such offer as a jest, does not relieve him from liability.7 A made an offer to B, his sister-in-law. who had been working for him for five years, to the effect that after she had worked for him ten years, he would give her a thousand dollars, and that when she married he would give her one thousand dollars and a five-hundred-dollar diamond ring. B accepted such offer and continued her work in her brother-in-law's house and in his store. Subsequently, A ordered B to leave his house because of a quarrel, which A had had with his wife, who was B's sister; and B sued to recover reasonable compensation for the work which she had done. A's defense was that he was jesting when he made such offer. It was held that if B accepted such offer in good faith, and rendered services thereunder, she could recover.8
A question which is apparently left open in the adjudicated cases is the effect of an offer which the offeror intends as a joke, and which an ordinarily reasonable and prudent man would understand to be a joke, and which the offeror believes is accepted as a joke, but which the offeree in question believes to be a serious offer, and which he accepts as such. The cases which have been cited apparently make the bona fide belief of the offeree the decisive test without considering whether an ordinarily reasonable and prudent man would have taken such offer seriously. In most of the cases, however, in which the offeror was held by an offer made in jest, there was nothing tending to show that the offeree was not an ordinarily reasonable and prudent person; and accordingly rules which were laid down with reference to the particular offeree might have been intended to apply to a reasonable and prudent man. It is possible that in one case the offeree was rather more susceptible than usual, to the practical joking of the offeror; but in that case the offeror also seems to have known and taken advantage of his extreme susceptibility, and the real question was said to be whether the offeree knew that the offer was a joke.9
4 Brace v. Bishop, 43 Vt. 161.
5 Theisa v. Weiss, 166 Pa. St. 9, 31 Atl. 63.
6 Theiss v. Weiss, 166 Pa. St. 9, 31 Atl. 63; Bruce v. Bishop, 43 Vt. 161:
Plate v Durst. 42 W. Va. 63. 32 L. R. A. 404, 24 S. E. 580.
7 Nyulasy v. Rowan, 17 Vict. L. XL 663.
8 Plate v. Durst, 42 W. Va. 63, 32 L. R. A. 404, 24 S. E. 580.