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Dalton Jewelers in Chicago engaged in lengthy negotiations

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Dalton Jewelers in Chicago engaged in lengthy negotiations with Repp Realty company in new York city for the purchase of a new building. The price of building kept the parties from concluding an immediate agreement. Repp's written offer to sell was 500000. The representative for Dalton jewelers finally replied by telegram offering 400,000 saying take it or leave it. Repp reality filed the telegram for future reference but did not respond. Dalton then sent a letter stating that repp should disregard its prior communications offering 400,000 and that it accepted the offer of 500,000. Repp reality wrote back stating the price is now 600,000. Take it or leave it. Dalton promptly sent a telegram to repp saying that it held repp to its original offer of 500,000. Is repp legally bound to sell the building to Dalton for 500,000
On april 13, afton offered by mail to sell his lawn care to baird for 175,000.on april 19 baird telegrammed his acceptance which was delayed until april 21. On april 20 afton died. Was there a legally binding agreement.
Submitted: 6 years ago.
Category: Business Law
Expert:  Law Girl replied 6 years ago.

DearCustomer

Thank you for your question.

Dalton's subsequent letter was an attempt to reopen the negotiations constituted an offer. Repp then had the ability to agree to Dalton's terms but chose not to by extending a counteroffer.

Repp is not legally bound to sell at $500k because that was merely an offer presented by Repp, to which Dalton countered. Since offers generally remain open until: (1) accepted, (2) rejected, (3) retracted prior to acceptance, (4) countered, or (5) expired by their own terms, by sending a counter offer, the $500k was taken off the table when the counteroffer was exchanged. A contract requires a meeting of the minds, since there is obviously no meeting of the minds here, no contract was formed. Repp cannot be held responsible for selling at $500k.

With regard to Afton v. Baird, it is likely to find that a contract existed. Although death of a party terminates an offer, it is important to remember that the general rule is that acceptance is effective at the time it is dispatched (defined as being delivered to the agency of communication) if it is established if the offeree accepts by the "authorized means of communication." Since the original offer was extended through mail, it is likely that response by telegram will be an "authorized form of communication". Therefore, the contract was formed on April 19th when Baird telegrammed his acceptance of the offer. (An acceptance is still valid when communicated to the telegramming agency, even if it does not reach the other party.)

Again, keep in mind that under the traditional contract rule, the offeror impliedly authorizes the offeree to employ the same means as the offeror used in communicating the offer. More recently, the authorized means concept has been expanded to include an offeror who is silent on the means of communication and in such cases, authorizes acceptance by any reasonable means. A telegram in this situation is undoubtedly a reasonable means.

Please let me know if you have any other questions, or require clarification of this matter. Otherwise please hit "ACCEPT", so I may receive credit for my response. Tips and feedback are also appreciated.

Good Luck!

-KAT

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