Courteen Seed Co. v. Abraham, 129 Or. 427, 275 P. 684 (Or. 1929)

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

  1. 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.
  • 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.