Facts
- A seed company in Omaha sought to buy millet seed from a Nebraska farmer.
- The farmer wrote that he had “about 1,800” bushels of recleaned millet seed, enclosed a sample, and stated he wanted $2.25 per hundredweight, f.o.b. Lowell.
- After receiving the letter and sample, the company telegraphed that it “accept[ed] your offer” at $2.25 and asked how soon the farmer could load.
- The company also sent a confirming letter stating it had “booked” a purchase of 1,800 bushels, equal to the sample, and requested prompt shipment to Omaha.
- The farmer refused to deliver, asserting that his letter was not a binding offer and that no contract was formed.
- The company sued for breach of contract; a jury found for the company and judgment was entered against the farmer.
- The farmer appealed.
Issues
- Whether the farmer’s letter stating an approximate quantity on hand and the price he “want[ed]” constituted an offer to sell capable of acceptance.
- If not, whether the buyer’s telegram and confirming letter could nonetheless create an enforceable contract without the farmer’s further assent.
Decision
- The Nebraska Supreme Court reversed the judgment for the buyer.
- The court held the farmer’s letter was not an offer but a preliminary negotiation or price quotation.
- Because there was no offer to accept, the buyer’s response could not operate as an acceptance forming a contract.
- Without mutual assent, no enforceable contract of sale existed; the buyer could not recover for breach.
Legal Principles
- A contract of sale may be formed by correspondence, but courts will not treat communications intended as preliminary negotiations as binding agreements.
- A mere statement of the price at which property is held, even with a described quantity, is not ordinarily an offer to sell.
- When an initial communication is only a price/availability statement, the recipient’s purported “acceptance” is treated as an offer that requires acceptance by the original sender to form a contract.
Conclusion
The court held that the seller’s letter describing available millet seed and stating a desired price was a nonbinding step in negotiation rather than a definite offer; therefore, the buyer’s attempted acceptance did not create a contract, and the seller was not liable for breach.