Facts
- Courteen Seed Company, a Wisconsin wholesale seed dealer, sought to buy a carload (about 50,000 pounds) of red clover seed from Abraham, an Oregon warehouseman and grain dealer.
- Abraham sent Courteen a sample of seed with writing indicating he was “asking” a stated price per pound.
- Courteen acknowledged receipt of the sample and initially indicated it would wait before taking further action.
- Abraham later wrote about unfavorable rainy conditions and that the seed was not yet ready for shipment.
- Courteen then wired Abraham requesting a “firm offer” and the “absolutely lowest” price, f.o.b.
- Abraham replied by telegram that he was “asking 23 cents per pound” and that he had “an offer 22 3/4 cents per pound” from another party.
- Courteen responded by telegram stating it “accept[ed] your offer” and directed prompt shipment, and Courteen arranged resale transactions anticipating a profit.
- Abraham did not ship and refused to complete the sale.
- Courteen sued for breach of an alleged contract, claiming lost-profit damages; the trial court denied Abraham’s motion for nonsuit, and a jury awarded Courteen $500.
- Abraham appealed.
Issues
- Whether Abraham’s telegram stating he was “asking 23 cents per pound” and referencing another buyer’s offer constituted a definite offer capable of acceptance, forming a contract upon Courteen’s responsive telegram.
Decision
- The Oregon Supreme Court reversed the judgment for Courteen.
- The court held Abraham’s telegram was not an offer, but a statement of price and invitation to negotiate.
- Because there was no offer, Courteen’s purported acceptance could not create a contract.
- The case was remanded with directions to dismiss the action.
Legal Principles
- A contract-forming offer requires a manifestation of present willingness to enter a bargain such that the other party’s assent alone will conclude the deal.
- A price quotation or “asking” language typically indicates preliminary negotiations, not an offer, absent clear words of commitment (e.g., “I will sell”).
- Courts determine whether an offer exists by construing the parties’ communications in context to ascertain objective intent to be bound.
- A response labeled an “acceptance” is ineffective if the prior communication was not a legally operative offer; without a contract, expectation damages for nonperformance are unavailable.
Conclusion
The court held that the seller’s telegram was only a price quotation and invitation to deal, not an enforceable offer; therefore, the buyer’s attempted acceptance formed no contract, and the buyer could not recover damages for the seller’s refusal to ship.