## Facts

- The Margaret H. Wayne Trust owned a condominium in Ketchum, Idaho, which was listed for sale by its trustee, Margaret H. Wayne, a licensed real-estate salesperson.
- Allan G. Lipsky, also a licensed real-estate salesperson, was shown the property by Alan Reynolds, an associate real-estate broker.
- Using Reynolds’s standard printed real-estate purchase-and-sale (earnest money) form, Lipsky made three written offers to buy the condominium.
- Wayne rejected the first offer as too low; the second did not proceed because a financing contingency was not satisfied.
- Lipsky’s third offer, dated September 23, 1987, required $1,000 earnest money and included (a) a liquidated-damages provision and (b) a clause stating that if either party defaulted, the defaulting party would pay the broker’s commission.
- The form stated the offer was subject to seller acceptance on or before September 28, 1987; Lipsky changed the acceptance date to October 2, 1987, and initialed the change before returning it.
- Wayne did not sign the agreement until October 12, 1987, initialing by the changed acceptance date when she signed.
- Reynolds notified Lipsky by telephone that Wayne had signed; Reynolds testified that his normal practice would be to mail a copy of the signed agreement to the purchaser.
- The parties scheduled closing for November 2, 1987. After learning that Wayne had signed, Lipsky obtained a bank loan, obtained insurance for the property, and negotiated through Reynolds to buy some of Wayne’s furniture.
- After the stock market began a sharp decline in October 1987, Lipsky reconsidered buying a vacation home and, shortly before closing, told Reynolds he would not close.
- Wayne sued Lipsky for damages for breach of the purchase-and-sale agreement. After a bench trial, the court entered judgment for Wayne and included $4,460 for Reynolds’s commission even though Wayne had not claimed that item and Reynolds had already settled his commission claim directly with Lipsky before trial.

## Issues

1. Did a binding purchase-and-sale contract exist when the seller signed after the stated acceptance deadline, where the buyer proceeded toward closing after being told the agreement was signed?
2. Did the trial court err by awarding the seller damages for the broker’s commission when the broker had settled that commission claim with the buyer and the seller did not plead it as her own loss?

## Decision

- The Idaho Supreme Court held that a valid, enforceable contract existed between Wayne and Lipsky, and Lipsky breached it by refusing to close.
- The Court reasoned that even if Wayne’s late signature operated as a counteroffer, Lipsky accepted that counteroffer by conduct after notice—securing financing and insurance and negotiating related purchases consistent with a closing.
- The Court held the trial court erred by adding $4,460 for the broker’s commission to Wayne’s damages because the commission had already been settled directly between Reynolds and Lipsky and Wayne neither sought nor proved that amount as a loss to her.
- The Court affirmed the judgment as to liability and damages other than the commission, and modified the judgment to delete the $4,460 commission award (affirmed as modified).

## Legal Principles

- An offer that specifies a time for acceptance generally lapses if not accepted within that time; a late “acceptance” is commonly treated as a counteroffer.
- A counteroffer may be accepted through objective manifestations of assent, including performance-oriented conduct after the offeree receives notice of the counteroffer.
- Conduct consistent with moving forward under an agreement (such as arranging financing and insurance for a scheduled closing) can show acceptance even when formal timing requirements were not met.
- Contract damages must reflect losses suffered by the plaintiff; a court should not award amounts that create duplicate payment for the same obligation.
- A seller generally may not recover a broker’s commission as damages when the broker has already settled the commission claim with the buyer and the seller has not shown she remained liable for, or paid, that commission.

## Conclusion

Margaret H. Wayne Trust v. Lipsky held that the buyer’s actions after learning the seller signed—obtaining a loan and insurance and taking steps toward closing—showed acceptance of the seller’s late-signed agreement and created an enforceable contract that the buyer breached by refusing to close; however, the Idaho Supreme Court removed the broker-commission component of the damages because the broker had already settled that claim with the buyer and the seller did not claim or prove it as her own loss.


Margaret H. Wayne Trust v. Lipsky, 123 Idaho 253 (1993)