Case Name: Lonergan v Scolnick
Citation: California District Court of Appeal; 129 Cal. App. 2d 179, 276 P.2d 8 (1954)
Key Facts: Correspondence was sent and received between the plaintiff and defendant regarding a property that defendant was selling and plaintiff was interested in purchasing. Plaintiff wrote to the defendant what of his “rock bottom price of $2,500 cash” and where the property could be found while stating that “This is a form letter.” Defendant expressed interest in the property and recommended the use of an escrow agent. Plaintiff wrote that the escrow agent would be “O.K.” but that the plaintiff would have to decide fast because he anticipated selling the property with the next week or so. The defendant sold the property to a third party for $2,500 five days before the plaintiff opened an escrow account.
Procedural History: It was found that the plaintiff and defendant did not enter into a contract and that the defendant is entitled to judgment against the plaintiff. The trial court held that the plaintiff could not recover because he did not make a timely acceptance, not because the defendant didn’t make an offer. The plaintiff appealed to the higher court.
Issue: Does written communication between a buyer and a seller of final price, description of the property, and logistics of payment constitute an offer?
Holding: The lower court’s judgment was affirmed.
Reasoning: There can be no contract unless the minds of the parties have met and mutually agreed upon some specific thing. Based on the correspondence, the court found it evident that the negotiations between the defendant and the plaintiff were purely preliminary and that no offer was ever made by the defendant. The correspondence indicated that that defendant was trying to discover if the plaintiff was interested and did not intend to make a definite offer to the plaintiff. From the final letter from the defendant, it shows that he expected to have a buyer in the next week or so and that the defendant intended to sell to the first-comer, and was reserving the right to do so.
In accordance with Section 25 of the Restatement of the Law on Contracts:
“If from a promise,…the person to whom the promise is addressed knows or has reason to know that the person making it does not intend it as an expression of his fixed purpose until he has given a further expression of assent, he has not made an offer.”
Judgment: The defendant is entitled to judgment against the plaintiff.