Madden Lonergan v. Scolnick

1 Lonergan v. Scolnick, 129 Cal. App. 2d 179, 276 P.2d 8 (1954) Court: California District Court of Appeal State: California Year: 1954 Plaintiff: Joseph A. Lonergan, buyer of land, Appellant Defendant: Albert Scolnick, seller of land, Respondent Cause of Action: Breach of contract Relief Sought: Specific performance or for damages in the event that specific performance was impossible. Basis for Dispute: Law Facts:  An Ad was placed in a Los Angeles paper to sell 40 acres of land. In response to an inquiry, defendant, who lived in NY, wrote to the plaintiff describing the land and stating that his rock-bottom price was $2,500.  On April 8, the defendant wrote that he found the land, the escrow of choice was okay, but that “if [the plaintiff] was really interested, he would have to decide fast, as [defendant] expected to have a buyer in the next week or so.”  The plaintiff received the letter dated April 8 on April 14. The defendant had sold the property to a 3rd party on April 12.  On April 15, the defendant wrote that he would “immediately proceed to have the escrow opened and would deposit $2,5000 therein “in conformity with your offer.”” Disputed Facts: None. Plaintiff’s Argument:  Plaintiff and defendant entered into a contract that was just and reasonable  Plaintiff had been damaged in the amount of $3,581.  Appellant – judgment is contrary to the evidence Defendant’s Argument:  Plaintiff and defendant did not enter into a contract  Nothing is due to the plaintiff Procedural History: Lower Court Disposition: Judge found that there was an offer of sale which was, however, qualified and conditioned upon prompt acceptance by the plaintiff; that in spite of the condition, the plaintiff delayed more than a week before notifying the defendant of his acceptance; and that since the plaintiff was aware of the necessity of promptly communicating 2 his acceptance to the defendant his delay was not the prompt action required by the terms of the offer. As conclusions of law, it was found that the plaintiff and the defendant did not enter into a contract as alleged in the complaint or otherwise, and that the defendant is entitled to judgment against the plaintiff. Judgment was entered accordingly, from which the plaintiff appealed. Issue(s): Had an offer been made? Court’s Holding(s): Judgment is afÏrmed. Court’s Analysis & Reasoning: There can be no contract unless the minds of the parties have met and mutually agreed upon some specific thing. Section 25 of the Restatement of the Law (Williston, Formalism) If a promise, or manifestation of intention, or from the circumstances existing at the time, the person to whom the promise or manifestation is addressed knows or has reason to know that the person making it does not intend it as an expression of his fixed promise until he has given a further expression of assent, he has not made an offer. Niles v. Hancock, (Supreme Court of California) – BINDING Precedent “It is clear from the correspondence that it was the intention of the defendant that the negotiations between him and the plaintiff were to be purely preliminary.”    The advertisement was a mere request for an offer. The letter of April 8 was not a definite offer. The statement “that he expected to have a buyer in the next week or so” indicated that the defendant intended to sell to the first-comer, and was reserving the right to do so. o From this statement, the plaintiff knew or should have known that he was not being given time in which to accept an offer that he was being made, but that some further assent on the part of the defendant was required. 3 Notes & Questions 1. Was there an offer? Applying Section 24 and 26, what factors are relevant to resolution of this issue? Would you agree with the court that the defendant’s letter of April 8 did not rise to the level of an offer? a. Section 24(Second) Restatement – Offer Defined i. An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it. b. Section 26 (Second) Restatement – Preliminary Negotiations i. A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intent to conclude a bargain until he has made a further manifestation of assent. Given the language in Restatement (Second) Section 26, it is clear to me that the correspondence between the plaintiff and the defendant in Lonergan v. Scolnick was, by definition, a preliminary offer. The language used in the correspondence indicated that, given the opportunity, the defendant would sell the property on a first-come, first-serve basis. This does not elude that the acceptance will conclude the bargain. It was a preliminary negotiations. I agree with the court. 2. An alternate basis for the Lonergan result: “The mailbox rule.” The trial court ruled that the plaintiff could not recover, but not because the defendant never made an offer; it ruled that the plaintiff had failed to make a timely acceptance. Does the Appellate Court’s basis for decision appear to you a better one? Yes, I like the Appellate Court’s rationale more than the trail courts. If, on that date, there was actually an offer still open for acceptance, would the plaintiff’s act of mailing that letter have completed the formation of a contract? Yes, I believe so.