Contract Law - Case Analysis

Contract Law - Case Analysis

OFFER, ACCEPTANCE, and REPUDIATION: CASE ANALYSIS the Court will likely find that the parties had already formed an enforceable bilateral contract for the sale of the property and that Bradwell (hereinafter, "Buyer") performed under contract by tendering payment on the date specified by Seller and the Court will compel the performance by Stone (hereinafter, "Seller"). The seller will argue that the buyer's sending a cashier's check on March 10th violated Condition #3 of his letter specifying that the requirement to issue the $5,000 deposit by wire was not capable of being accepted through payment of a deposit by any other means. Seller will contend that Buyer's failure to issue the deposit payment in the only manner explicitly specified as acceptable in the Anderson letter to Larson constituted a counteroffer rather than an acceptance, because the purported acceptance changed an element of the offer.

Since, according to Seller, the deposit sent via cashier's check was a counteroffer, it revoked the original offer when it was made. The seller never accepted the counteroffer and is under no obligation to proceed with the sale. Furthermore, the seller will argue that the specific language of the offer very explicitly stated that the contract would be "null and void" if the buyer considered any of the conditions numbered 1 through 3 "unacceptable" and that tendering the deposit by other means constituted prima facie evidence that the buyer considered Condition #3 "unacceptable."

This is, essentially, the same argument that the Pennsylvania court rejected in Hatalowich, pursuant to which Seller in the instant case suggests that acceptance via wire transfer was the exclusive mode of creating the contract, not acceptance via cashier's check. As in Hatalowich, this Court will find that the cashier's check constituted a bona fide acceptance of the tendered offer, because the alternate form of payment was not a material variance of the terms of agreement recited in the Anderson letter. In Hatalowich, the Court decided that the form of acceptance was functionally equivalent to that of the terms and conditions in the offer. For the same reason, the Court will reject Seller's argument challenging Buyer's acceptance by virtue of any variance in payment method for the deposit.

In that regard, the instant case adds one element that could have led to a contrary result: namely, if Seller had rejected Buyer's timely tender of a different form of payment for the deposit than the wire transfer specified. In that case, the Court would probably have allowed the same argument, provided that the seller had simply notified the buyer that he rejected buyer's counteroffer (to pay the deposit by cashier's check instead of by wire transfer) within a reasonable time in conjunction with arranging for its prompt return instead of cashing it. Notwithstanding the functional equivalence of two modes of payment, parties may still require one or the other as an explicit term of an offer and reject any acceptance that varies from it. However, once Seller (or his representative or agent) actually deposited the alternate form of payment instead of rejecting it by virtue of the variance from the terms of the offer, that act constitutes an acceptance of the offer.

Alternatively, the Court might even agree that the cashier's check constituted a counteroffer, but that characterization will not help the seller escape his obligation under the contract, because the counteroffer was accepted just the same by his depositing the alternate form of deposit payment. Finally, with respect to the specific language of the offer rendering buyer's considering Condition #3 "unacceptable" and voiding the offer thereby, this is nothing more than a self-serving characterization on the part of the seller.

The fact remains that any right of the seller to reject the buyer's acceptance (or counteroffer, by Seller's earlier argument), ended upon Seller's de facto acceptance of the deposit payment as tendered.

Having failed to vitiate the obligations under contract by virtue of any variance between the specific mode of payment, the seller will argue that he revoked the offer on March 11th after the buyer tendered the deposit but before the buyer could have satisfied the second condition of the offer. Since the offer was revoked by Seller before all of the conditions specified in the offer could have been accepted by Buyer in the office of Anderson on March 14th, Seller will argue that Buyer could no longer accept, on March

14 th, an offer that was revoked on March 11th. but, as the Florida court in Kendel reiterated a rule expressed in the earlier Morrison case, (1963), "The right to withdraw and repudiate the acceptance of an offer is dependent on the initial determination of when that acceptance is effective and irrevocable."

In this case, Condition #3 of the terms of the offer was accepted by Seller's acceptance of the deposit by virtue of depositing it upon receipt. If the buyer appeared at the offices of Anderson on the date and time specified in Condition #2 and tendered the rest of the payment specified in Condition #1, then the seller was not entitled to reject that tendered payment. However, if the buyer showed up substantially later than the specified time of 12:00 PM, then the Court is likely to recognize the seller's right to reject that acceptance for lack of timeliness with respect to Condition #2.

Naturally, Buyer will counter that according to the rule expressed in Hatalowich, tendering the final element of acceptance as specified in Conditions #1 and 2 on the afternoon of the date specified was functionally equivalent to doing the same at precisely