## Facts

- A savings bank published a newspaper advertisement offering “Great Gifts” and a stated maturity payout in exchange for opening specified savings certificates.
- For a “Plan B: 3 1/2 Year Investment,” the ad stated: “Deposit $14,000” and receive specified gifts and “$20,136.12 upon maturity in 3 1/2 years,” at an 8¾% interest rate, along with standard CD-related conditions (e.g., early-withdrawal penalty).
- The plaintiffs deposited $14,000, received one of the advertised gifts immediately, and were issued a certificate of deposit.
- At maturity, the bank paid $18,823.93 rather than the advertised $20,136.12 and asserted the ad contained a typographical error (contending the deposit should have been $15,000 to yield $20,136.12).
- The bank did not notify the plaintiffs of any claimed error until after maturity; the bank had lobby materials with figures it considered correct.
- The plaintiffs sued for $1,312.19, the difference between the advertised maturity amount and the amount paid.
- A general district court entered judgment for the plaintiffs on stipulated facts; a circuit court reversed, ruling the ad was only an invitation to negotiate.

## Issues

1. Whether a newspaper advertisement that is clear, definite, and explicit in terms can constitute an offer that becomes a binding contract upon acceptance by performance.
2. Whether a bank may avoid the advertised payout by asserting an undisclosed typographical error after the depositor has performed as directed.

## Decision

- The Supreme Court of Virginia reversed the circuit court and reinstated judgment for the plaintiffs.
- The advertisement constituted an offer because it was clear, definite, and explicit and left nothing open for negotiation regarding the required deposit, term, and promised maturity amount and gifts.
- The plaintiffs accepted the offer by performing the specified act—depositing $14,000—creating a binding unilateral contract.
- The bank’s claimed typographical error did not negate the contract after acceptance; the bank owed the advertised maturity amount.
- The plaintiffs were entitled to recover $1,312.19.

## Legal Principles

- Advertisements are generally invitations to negotiate, not offers, but an advertisement can be an offer when it is clear, definite, and explicit and leaves nothing open for negotiation.
- An advertisement that specifies the performance required for acceptance, and states the promised return with sufficient definiteness, may be accepted by performance, forming a unilateral contract.
- A promisor’s undisclosed unilateral mistake in published terms, asserted only after the other party’s performance, does not ordinarily relieve the promisor of the contractual obligation created by the offeree’s reasonable acceptance of the stated terms.

## Conclusion

A detailed newspaper advertisement promising a specific maturity payout and gifts in exchange for a stated deposit was an enforceable offer; the depositors accepted by depositing the stated amount, and the bank remained bound to pay the advertised maturity amount despite its later claim of typographical error.


Chang v. First Colonial Sav. Bank, 242 Va. 388 (1991)