Minnesota Linseed Oil Co. v. Collier White Lead Co.

Circuit Court, District of Minnesota

17 F. Cas. 447 (1876)

Facts

The contract is alleged to have been made by telegraph. The plaintiff is Minnesota, the defendant is Collier/St. Louis.

 

July 29th, 1875 – Minnesota Linseed to Collier White of St. Louis:

“Please wire your best offer for round lot named by you.”

 

July 30th – St. Louis to Minnesota:

“300 barrels, 55 cents here, 30 days, no commission… August delivery”

 

July 31st – Minnesota to St. Louis:

“Will accept 58 cents, on terms named in your telegraph.”

Dispatch was sent at 9:15 PM, was not received by St. Louis until somewhere between 8-9 AM on Monday August 2nd.

 

August 3rd – 8:53 AM – St. Louis to Minnesota:

“Offer accepted.”

 

August 3rd – After the last telegram – Minnesota to St. Louis:

“We must withdraw our offer” from July 31st.”

 

Procedural History

This is the first court to hear case.

Issue

Is there an acceptance if the minds do not meet in regards to an acceptable time frame to accept an offer? Can an offer expire depending on the circumstances of the deal, even if the offeree has accepted an offer via the unbreakable mailbox rule?

Arguments for Both Parties

 

Defendant urges court that the dispatch of Tuesday August 3rd, accepting the offer of the plaintiff transmitted July 31st and delivered Monday morning August 2nd, concluded a contract for the sale of 12,450 gallons of oil.

 

The plaintiff claims:

  1. The dispatch accepting the proposition made on July 31st was not received until after the offer had been withdrawn.
  2. That the acceptance was not in due time
  3. The delay was unreasonable and therefore no contract was completed.

 

Holding

The court holds that the length of time between the July 31st offer and the alleged acceptance on August 3rd was not transmitted within the timeframe in which a reasonable person would describe as, acceptable, given the incredible fluctuations of the commodities market in which the deal was being negotiated.

 

Rule

Superseding the mailbox rule of acceptance by an offeree, is the defining rule of intention in contracts. If the parties have not specifically declared an element for the contract to be valid, then the validity will rest upon what is reasonable given the circumstances. If no specific acceptance period is given for an offer to be valid, then a reasonable man will decide what constitutes the valid time period for acceptance, and any alleged acceptance that occurs after that reasonable time period will be deemed an acceptance for an offer that is no longer valid as it has expired.

Policy Arguments

We know the revocation was not valid. The lapse in time makes the contract expire.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s