Facts
- Homeowners G.T. Green and Jessie Fay Green signed a written instrument for Ever-Tite Roofing Corp. to re-roof their home for a price payable in monthly installments.
- Ever-Tite’s sales representative also signed, but lacked authority to bind the company.
- The instrument stated it would become binding only upon written acceptance by an authorized company officer or upon commencing performance of the work, and stated the contract was not subject to cancellation.
- Because the job was to be financed on credit, Ever-Tite obtained a credit report and approval before proceeding; this type of delay was known in the transaction.
- After credit approval, Ever-Tite engaged workers, loaded trucks with roofing materials, and drove to the Greens’ residence to begin the job.
- When Ever-Tite arrived, another contractor was already re-roofing the house; the Greens said they had contracted with that company two days earlier and forbade Ever-Tite from working.
- The Greens had not communicated any withdrawal or cancellation to Ever-Tite before Ever-Tite arrived to begin performance.
- Ever-Tite sued for breach; the trial court found no contract and dismissed. Ever-Tite appealed.
Issues
- Whether Ever-Tite accepted the Greens’ offer in the contractually specified manner by “commencing performance of the work.”
- Whether acceptance occurred within a reasonable time when the offer stated no deadline for acceptance.
- Whether the Greens effectively revoked the offer before acceptance, or instead breached an already-formed contract.
Decision
- The appellate court reversed the trial court and rendered judgment for Ever-Tite.
- Ever-Tite accepted by commencing performance when it engaged workers, loaded materials, and transported men and materials to the job site.
- The acceptance occurred within a reasonable time given the need for credit investigation and financing arrangements.
- The Greens’ refusal to allow performance after Ever-Tite commenced performance constituted breach of contract, not timely revocation.
- The court awarded Ever-Tite approximately $311.37 (preparation/transport costs and lost profits), plus interest and costs, and denied attorney’s fees.
Legal Principles
- When an offer specifies modes of acceptance, acceptance is effective if accomplished by one of the specified modes.
- If an offer does not specify a time for acceptance, the power of acceptance lasts for a reasonable time, determined by the nature of the transaction, business practice, and surrounding circumstances.
- Where acceptance by performance is authorized, substantial preparatory acts that are integral to performance and undertaken to begin the job can constitute commencement of performance, even if the main work has not yet started at the site.
- An offer may be revoked before acceptance, but revocation is ineffective if not communicated before acceptance occurs.
- Contractual attorney-fee provisions are enforced according to their terms and do not apply outside the circumstances they cover.
Conclusion
The court held that a roofing contract became binding when the contractor began performance through preparatory actions necessary to start the job, that this acceptance was timely under a reasonable-time standard, and that the homeowners’ later refusal to permit performance was a breach warranting damages but not attorney’s fees.