ProfessorMelissa A. Hale
CaseCast™ – "What you need to know"
Brief Fact Summary. Plaintiff produced machinery for water purification and submitted a proposal to sell certain machinery to the defendant who manufactured Ice. The proposal stated that if accepted it would become a contract if approved by an executive officer of the plaintiff’s company.
Synopsis of Rule of Law. Form of the offer may require some final approval; however, it does not require notice to the other party of that approval unless the form expressly dictates that requirement. Court will construe meaning from the obvious meaning.
Likewise the order in International Filter Co. v. Conroe Gin recited that This proposal is made in duplicate and becomes a contract when accepted by the purchaser and approved by an executive officer of the International Filter Company, at its office in Chicago.View Full Point of Law
Whether the endorsement “O.K.” written on the paper by the President of the company was an “approval by an executive officer” as described in the proposal.
Whether Plaintiff was required to give notice to Defendant of the “approval of the executive officer” in order to form the contract as contemplated.
The “OK” was an approval by the executive and that the paper then became a contract.
The Court did not think it was essential that the approval by the executive be communicated to the defendant. The form of the offer did not show this was a requirement and to require it would be to change the obvious meaning of the language and change the “locus and time prescribed for meeting of the minds” contained in the offer. In any event, the subsequent confirmation letter would have sufficed as notice of the approval even though it was not expressly required.
Discussion. The offeror has the power to express the terms and determine the acts which will constitute acceptance. Courts will construe those terms according to their plain meaning. Here, the terms required executive approval but did not require the offered to give notice of the acceptance.