Allen R. Krauss Co. v. Fox

Brief Fact Summary.

Allen R. Krauss Co. (Krauss) sued Fox to compel Fox to sell land when Krauss accepted a counteroffer before the proposed deadline.

Synopsis of Rule of Law.

An offer that claims to remain open until a deadline can be rescinded prior to the deadline if the offeree did not provide consideration to keep the offer open.

Facts.

Allen R. Krauss Co. (Krauss) offered to purchase land from Fox for $265,000 with a $5,000 deposit. Fox sent a counteroffer with five days to act for $486,000 in cash. When Krauss signed the acceptance form two hours before the acceptance deadline, Krauss’s lawyer informed Krauss that Fox no longer wished to sell the property. Krauss nevertheless delivered the acceptance form and Krauss sued Fox to compel Fox to sell the land. The trial court granted judgment to Krauss.

Issue.

Whether an offer that claims to remain open until a deadline can be rescinded prior to the deadline if the offeree did not provide consideration to keep the offer open?

Held.

Yes. The judgment of the trial court is reversed. When Fox revoked the counteroffer, Krauss’s acceptance did not constitute a contract.

Discussion.

An offer that claims to remain open until a deadline can be rescinded prior to the deadline if the offeree did not provide consideration to keep the offer open. Similarly, an offer may be revoked prior to acceptance if the offer has not been accepted.