Citation. Utah Sup. Ct., 62 Utah 226, 219 P. 539 (1923)
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Brief Fact Summary.
Allen (P) who was the official reporter for the Interstate Commerce Commission (Commission) alleged that a contacted was formed between him and Bissinger & Co (D) when Bissinger (D) accepted his offer for copies of the Commission’s official hearing reports relating to freight. This was however refuted by Bissinger (D) on the ground that there was no mutual assent between the two of them and therefore, there was no contract.
Synopsis of Rule of Law.
By applying a reasonable standard, a contract exists where an acceptance, not exactly portraying an offer, refers to the subject matter of the offer, which gives rise to the parties having an intention to agree on the same thing.
Notices of the Interstate Commerce Commission (Commission) pertaining to freight matters were sent to major shippers, including Bissinger & Co (D) by Allen (P), who was the official reporter of the Commission. Allen (P) also included in the notices sent to the major shippers, an offer for copies of the official reports of the hearings. Bissinger (D) responded to Allen’s (P) offer in writing, stating “We will be interested in your official report of the different changes in the handling of the freight and would ask you to put our name down for the copy of same”.
Allen (P) thereby made available to Bissinger (D), a copy of the hearings up to the 17th of August and a copy of the official reports for some subsequent hearings in October. Few days after the receipt of these reports, Bissinger (D) informed Allen (P) that the reports were immaterial to him, asking Allen (P) to take back the reports. Bissinger’s (D) also offered to pay a reasonable charge to cover the cost of all the reports Allen (P) had sent to him.
But the response Allen (P) gave Bissinger (D) was that the Commission could only accept the cancellation for reports prepared for hearings held after the 27th of September and not for reports for hearings held through the 27th of September, because a copy of the report for hearings up to that date had already been prepared. The copy of this report was made available to Bissinger (D) by Allen (P) in November at a cost of $1,047.50, which was the total amount for the 8,380 pages valued at 12.5cents, sent to Bissinger (D).
Bissinger (D) however refused to pay this invoiced amount because of the number of pages it had received and the associated cost attached to each page of the report. Allen (P) defended this invoiced amount by informing Bissinger (D) that the per-page cost was set by the Commission and not by him, that the rate had been in force for 10 years and that he could not determine ahead of time, the extensity of the hearings and how the report would be. To recover the debt owed by Bissinger (D), Allen sued Bissinger & Co (D). Judgment was given in favor of Allen (P) by the trial court but the state’s highest court granted review.
By applying a reasonable standard, can a contract exist where an acceptance not exactly portraying an offer, which refers to the subject matter of the offer, give rise to the parties having an intention to agree on the same thing?
Cherry, J). Yes. By applying a reasonable standard, a contract exists where an acceptance, not exactly portraying an offer, refers to the subject matter of the offer, gives rise to the parties having an intention to agree on the same thing. Bissinger (D) based his argument on the premise that both of them did not have the same intention of entering into a contract because the language of its letter, “official report of the different changes in the handling of freight” was different from the language in Allen’s (P) offer which was “a copy of the hearings”.
From this, Bissinger (D) pointed out that they did not have the same intention on the transaction and never had a common ground on the subject matter of the contract. But by applying a reasonableness standard, Bissinger’s (D) line of argument must be rejected because under the circumstances in the light of Allen’s (P) offer, the defendant reply is responsive and relevant. A description of only one official report was offered by Allen (P) and Bissinger (D), not only referred to the report but requested the copy of “your official report”, etc. This phrase alone in commercial practice can be understood to sufficiently refer to the subject matter.
Also, the additional descriptive words used, “of different changes in the handling of freight”, though seems general, can reasonably been seen as pointing to the subject of Allen’s (P) offer. Since there was no other official report known to the parties to which the acceptance could refer, this could be seen as true. Looking at the whole picture of the transaction, the parties’ communications portrays an intention to agree upon the same thing.
As a matter of law, the evidence was sufficient to support the finding of the trial court that the defendant accepted the plaintiff’s offer. Affirmed.
The principle that absent fraud or misconduct on the offeror’s part, once an offeree has accepted the offer is made lucid in this case by the court and this would not excuse it of its bargain merely because the bargain turns out to be unprofitable or burdensome. Hence, the court did not grant the prayers of Bissinger (D) that there was no contract because the reports were “absolutely useless” and that it had not expected to receive a “library”.