Ardente v. Horan

Brief Fact Summary.

Defendants offered to sell their property to Plaintiff, who agreed to buy the house requesting that certain furniture and fixtures come with the property. Defendants refused to sell their furniture and fixtures, and returned the unsigned agreement as well as Plaintiff’s deposit. Plaintiff sued for specific performance.

Synopsis of Rule of Law.

A valid contract is formed when acceptance of an offer is definite and unequivocal and does not impose additional conditions on the offer. Conditional acceptances shall be construed as counteroffers.

Facts.

William and Katherine Horan (Defendants) offered to sell their property, and Ernest Ardente (Plaintiff) placed a bid of $250,000 for the property. After Defendants’ attorney said that the bid was acceptable, he forwarded to Plaintiff a purchase and sale agreement. After Plaintiff executed the agreement, Plaintiff’s attorney forwarded it back to Defendants along with a check for $20,000 and a letter asking if certain furniture and fixtures were a part of the agreement and requesting that they be. Defendants refused to have the furniture and fixtures be part of the agreements and returned to Plaintiff the unsigned purchase and sale agreement along with the $20,000 check. After Defendants refused to sell the property to Plaintiff, Plaintiff sued to seek specific performance. After ruling that Plaintiff’s letter constituted a conditional acceptance of Defendants’ offer and construing Plaintiff’s letter as a counteroffer, the trial judge granted Defendants’ motion for summary judgment. Since the Defendants never accepted the counteroffer, no contract was formed as a matter of law. Plaintiff appealed.

Issue.

Is a valid contract created when a contracting party accepts an offer with a condition?

Held.

No. A valid contract is not created when a contracting party accepts an offer with a condition. In this case, Plaintiff’s letter of acceptance has a condition, which operates as a counteroffer that the Defendants did not accept. If Plaintiff’s letter had not requested the furniture and fixtures, the delivery of the purchase and sale agreement by Plaintiff would have operated as a valid acceptance and thus, would have created a valid contract. Although Plaintiff’s letter inquires as to whether the additional furniture and fixtures are part of the agreement, he does not indicate that he would be willing to move forward with the agreement even without the furniture and fixtures. Thus, his letter is properly construed as a counteroffer with additional terms in which the Defendants could reject. The trial court’s decision is affirmed.

Discussion.

A valid contract is not created when a contracting party accepts an offer with certain conditions. These conditions are construed as a counteroffer and can be rejected by the other contracting party. However, an acceptance that has conditions may still be valid if the actual acceptance is clearly independent of the conditional language. Here, Plaintiff’s letter was not clearly an acceptance because he did not indicate that he will accept the property despite Plaintiff’s answer to his inquiry about the furniture and fixtures.