Brief Fact Summary. In response to an ad in the Wall Street Journal, Plaintiff, acting as the business merger broker for Bush Hog, Inc. (B-H), contacted Defendant in an attempt to broker a deal between the two companies. When B-H and Defendant decided to negotiate without the use of Plaintiff’s services, Plaintiff brought suit, seeking the recovery of his broker’s fees.
Synopsis of Rule of Law. This case stands for the proposition that an offer can be accepted by full performance.
The Delaware Supreme Court has stated that the overt manifestation of assent—not subjective intent—controls the formation of a contract; that the only intent of the parties to a contract which is essential is an intent to say the words or do the acts which constitute their manifestation of assent.View Full Point of Law
Plaintiff was able to recover his brokering fees from B-H, on the grounds that his actions were the procuring cause of the merger and gains that B-H received. The Trial Court, however, found Plaintiff did not expressly accept Defendant’s offer and that Defendant did not owe broker fees. Plaintiff appealed against Defendant.
Issue. Was Deutsch, in opening communications between B-H and (Defendant), accepting Defendant’s offer to broker a merger?
Held. Reversed and Remanded.
• In his opinion, Judge Hermann relied on the Restatement of Contracts, §20, which allows for acceptance of an offer by an overt act that manifests assent. Defendant made its offer, in the Wall Street Journal, to buy industrial product lines. In contacting Defendant and opening communication between them and B-H, Deutsch acted in acceptance of their offer to buy. Defendant tried to contend that, because they offered to protect brokers via their advertisement, they had offered a guarantee and that Plaintiff did not manifest consent in the appropriate manner; however, the court dismissed this contention, claiming that Plaintiff did give proper notice of acceptance, when he identified B-H to them and implied his broker-client relationship.
Discussion. While this case, at first, appears complex, the important contract issue to remember is that an overt act toward performance can be seen as a manifestation of assent to an agreement.