Normile v. Miller

1 Normile v. Miller, 313 N.C. 98, 326 S.E.2d 11 (1985) Court: Supreme Court of North Carolina Year: 1985 Plaintiff: Normile & Kurniawan – Buyer Defendant: Miller, owned real-estate in Charlotte, NC - seller Cause of Action: Breach of Contract Relief Sought: Specific performance – sell them the house Basis for Dispute: Facts: Normile & Kurniawan drafted a written offer to purchase the property with the help of the real estate broker, Richard Byer. Included a provision in Paragraph 9 that said “Offer & Closing Date: Time is of the essence, therefore this offer must be accepted on or before 5:00pm Aug. 5 th, 1980.” A signed copy shall be promptly returned to the purchaser. The defendant returned the document with changes to (1) increase the earnest money deposit ($100 to $500); (2) increase in the down payment due at closing ($875 to $1,000); (3) a decrease in the unpaid principal of the existing mortgage amount; (4) a decrease in the term of the loan from seller (25years to 20 years); (5) and a purchase qualification contingency added in the outer margin of the form. The counteroffer was returned to the plaintiff’s. Byer said that Normile did not have the $500 for the deposit and that Normile stated “he did not want to go 25 years because he wanted lower payments). Byer was under the impression, at this point, that Normile thought he had first option on the property and that “nobody else could put an offer in on it and buy it while he had this counteroffer, so he was going to wait awhile before he decided what to do with it.” Byer thought he had rejected the counteroffer. At 12:30am on Aug. 5, Byer went to the home of Plaintiff Segal with terms similar to the counteroffer by defendant. This offer was accepted, without change by the defendant. At 2:00pm the same day, Byer notified Normile that defendant had revoked the counteroffer and commented, “You snooze, you lose, the property had been sold.” Prior to 5:00pm on the same day, Normile and Kurniawan initialed the offer to purchase form containing defendant’s counteroffer and delivered the form to the Gallery of Homes, with the $500 deposit. Disputed Facts: None. Plaintiff’s Argument: We had first option, no one else could have put an offer in, we accepted the counteroffer before the inclusion date and therefore want the contract to be completed and the title given to us. Defendant’s Argument: In her answer, recognized the validity of the contract between her and Plaintiff Segal. However, because of the action for specific performance commenced by Plaintiffs Normile & Kurniawan, defendant contended that she was unable to legally convey titled to Plaintiff Segal. Procedural History: Both Plaintiff’s filed a motion for summary judgment. Plaintiff Segal’s motion for summary judgment was granted by the trial court, and defendant was ordered to specifically perform the contract to convey the property to Seal. Plaintiff’s Normile & Kurniawan appealed to the Court of Appeals from the trial court’s denial of their motion for summary judgment. The court unanimously affirmed the trial court’s actions. Discretionary review was allowed by this Court on petition of Plaintiffs Normile & Kurniawan. Discretionary Review: the authority appellate courts have to decide which appeals they will consider from among the cases submitted to them. Issue(s): Did the defendant-seller accept plaintiff-appellant’s offer prior to the expiration of the time limit contained within the offer? Rule: Restatement (Second) of Contracts Section 35 The offeror is the creator of the power, and before it leaves his hands, he may fashion it to his will…if he names a specific period for its existence, the offerree can accept only during this period. If the seller purports to accept but changes or modifies the terms of the offer, he makes what is generally referred to as a qualified or conditional acceptance. “The effect of such an acceptance so conditioned is to make a new counter-proposal upon which the parties have not yet agree, but which is open for acceptance or rejection” (Richardson, 223 N.C. at 347, 26 S.E.2d at 899). Such a reply from the seller is actually a counteroffer and a rejection of the buyer’s offer. S. Williston, supra Section 51 The reason is that the counter-offer is interpreted as being in effect the statement by the offeree not only that he will enter into the transaction on the terms stated in his counteroffer, but also by implication that he will not assent to the terms of the original offer. Mini-Conclusion: Defendant did not accept offer prior to the expiration of the time limit contained within the offer. The offerree, defendant-seller, changed the original offer in several material respects, most notably in the terms regarding payment of the purchase price (Williston, Section 77, any alteration in the method of payment creates a conditional acceptance). Issue2: If a seller rejects a prospective purchaser’s offer to purchase but makes a counteroffer that is not accepted by the prospective purchaser, does the prospective purchaser have the power to accept after he receives notice that the counteroffer has been revoked? 3 Conclusion: No. Reasoning: 1. The Plaintiff-appellants’ original offer was rejected and ceased to exist. (Williston, 51) 2. The counteroffer by the offeree requires the original offeror, plaintiff-appellants, to either accept or reject. Issue3: Did Plaintiff-appellants, the original offerors, accept or reject defendant-seller’s counteroffer? Rule: Justice Bobbit in Howell v. Smith (binding) “The question whether a contract has been made must be determined from a consideration of the expressed intention of the parties – that is from a consideration of their words or acts.” Reasoning: In their brief, Byer said the neither accepted nor rejected. Therefore, the plaintiffappellants did not manifest any intent to agree to or accept the terms contained in defendant’s counteroffer. Although Normile’s mistaken belief that he had an option is unfortunate, he still failed to express to Byer his agreement to or rejection of the counteroffer made by defendantseller. o Plaintiff-appellants did not accept, either expressly or by conduct, defendant’s counteroffer. Absent either an acceptance or rejection, there was no meeting of the minds or mutual assent between the parties, a fortiori, there was no contract. Court’s Holding(s): Regardless of whether or not the seal imported the necessary consideration, we conclude that defendant-seller made no promise or agreement to hold her offer open. Accordingly, we hold that the defendant’s counteroffer was not transformed into an irrevocable offer for the time limit contained in the original offer because the defendant’s conditional acceptance did not include the time-for-acceptance provision as part of its terms and because defendant did not make any promise to hold her counteroffer open for any stated time. Court’s Disposition: The decision of the Court of Appeals is modified and affirmed (in favor of the seller). Court’s Analysis & Reasoning: A qualified acceptance was in reality a rejection of the plaintiff-appellants original offer because it was coupled with certain modifications or changes that were not obtained in the original offer. There was no meeting of the minds, since the parties failed to assent to the same thing in the same sense. There was no language indicating that defendant-seller in any way agreed to sell or convey her real property to plaintiff-appellants at their request within a specified period of time. Nowhere is there companion language to the effect that Defendant Miller “hereby agrees to sell or convey to the purchasers” if they accept by a certain date. Thus, a necessary ingredient to the creation of an option contract, i.e., a promise to hold an offer open for a specified time, is not present. By entering into the contract with Plaintiff Segal, the defendant manifested her intention to revoke her previous counteroffer to plaintiff-appellants. Rule: Restatement, supra, 42 “It is a fundamental tenet of the common law that an offer is generally freely revocable and can be countermanded by the offeror at any time before it has been accepted by the offeree.