International Filter Co. v. Conroe Gin, Ice & Light Co.

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.

Facts.
The proposal document stated that it “becomes a contract when accepted by the purchaser and approved by an executive officer.”
Defendant wrote “accepted” Feb. 10, 1920 and the notation “make shipment for Mar. 10” and sent the proposal back to plaintiff.
Plaintiff President wrote “O.K.” and the date and. his name on the document.

Issue.
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.

Held.
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.