## Facts

- John M. and LynnDee Melvin owned rural real property in McIntosh County, North Dakota.
- Paul Ehlen expressed interest in buying the property through an intermediary.
- On February 16, 2011, Ehlen sent the Melvins a signed document titled “Purchase Agreement,” offering to buy the property for $850,000, with closing and full payment on or before March 1, 2011, along with other stated terms.
- Ehlen also provided an additional page titled “Amendment to Purchase Agreement” listing further terms.
- On February 18, 2011, after consulting with their attorney, the Melvins reviewed the documents and made handwritten changes before returning them.
- The Melvins’ edits included both corrections and new substantive terms, including that the property would be sold “as is,” that the land was subject to a federal wetland easement and an agricultural lease, and that the Melvins wanted to remove certain equipment from the property.
- The Melvins initialed each handwritten change, signed the documents, and sent the modified agreement back to Ehlen.
- After receiving the modified documents, Ehlen had no direct contact with the Melvins and did not initial or sign the handwritten revisions.
- The intermediary told the Melvins on February 24, 2011, that the deal was off because Ehlen was concerned about some of the modified terms, but later told them the deal was back on.
- Ehlen did not pay or deposit the purchase price by March 1, 2011.
- On March 2, 2011, the Melvins’ attorney sent Ehlen a letter stating the contemplated transaction was terminated.
- Ehlen sued to enforce the alleged purchase agreement; after a bench trial, the district court found the Melvins’ revisions were a counteroffer that Ehlen did not accept, dismissed the action, and awarded costs to the Melvins in an amended judgment.
- Ehlen appealed from the dismissal judgment, the costs judgment, and the amended judgment.

## Issues

1. Did the Melvins’ handwritten modifications constitute an acceptance of Ehlen’s February 16 purchase offer or a counteroffer?
2. If the Melvins made a counteroffer, did Ehlen accept it by words or conduct sufficient to create a contract for the sale of the property?
3. Was the district court’s finding that the parties lacked mutual consent clearly erroneous under Rule 52(a)?

## Decision

- The North Dakota Supreme Court affirmed the judgment dismissing Ehlen’s action and affirmed the costs judgment and amended judgment.
- The court held the district court did not clearly err in finding no mutual consent and therefore no contract.
- The court concluded the Melvins’ handwritten, substantive additions were a qualified acceptance that operated as a counteroffer.
- The court concluded Ehlen did not accept the counteroffer, as shown by the absence of direct assent, the lack of initials or signature on the changes, and the failure to pay by the March 1 deadline.

## Legal Principles

- A contract requires mutual consent; consent is not mutual unless all parties agree to the same thing in the same sense.
- An acceptance must be absolute and unqualified; a qualified acceptance that adds or alters terms is a counteroffer.
- Material changes to essential or negotiated terms prevent formation of a contract unless the other party clearly accepts the revised terms.
- Whether mutual assent existed is a question of fact; appellate review of a trial court’s finding on mutual consent is for clear error under N.D.R.Civ.P. 52(a).

## Conclusion

Because the Melvins’ handwritten revisions added substantive terms and therefore constituted a counteroffer, and because Ehlen never clearly accepted that counteroffer by direct assent, signing/initialing the revisions, or timely payment, the parties never formed an enforceable contract for the land sale; the North Dakota Supreme Court affirmed dismissal and the related cost awards.


Ehlen v. Melvin, 823 N.W.2d 780 (2012)