Lonegran v. Scolnick

Brief Fact Summary. Plaintiff corresponded with Defendant numerous times about a specific piece of property. After some exchanges, the Defendant sold the land to a third party. Plaintiff claims there was a binding contract already in place.

Synopsis of Rule of Law. There can be no contract unless the minds of the parties have met and mutually agreed upon some specific thing. This is usually evidence by one party making an offer which is accepted by the other party.

Facts. Defendant placed an ad in paper selling “Joshua Tree vic. 40 acres, * * * need cash, will sacrifice.” Plaintiff wrote a letter of inquiry. Defendant sent a letter marked clearly as a form letter to plaintiff on March 26th giving description of property and stating his rock bottom price of $2,500. On April 7th, Plaintiff responded asking for a legal description of the property (to be sure he had found it) and asked if a certain bank would be an acceptable escrow agent “should I desire to purchase the land.” Defendant responded on April 8th saying that from Plaintiff’s description of the property Plaintiff had found the land and that the bank was acceptable escrow agent. The response ended with “If you are really interested, you will have to decide fast, as I expect to have a buyer in the next week or so.” On April 12th, Defendant sold the property to a third party for $2,500. Plaintiff received the Defendant’s April 8th correspondence on April 14th (after property had already b
een sold). On April 15th, Plaintiff responded to Defendant stating he would proceed with putting $2,500 in escrow.

Issue. Is there a valid contract?

Held. No. Affirmed.
The court talks about the Fixed Purpose Test: “If from a promise, or manifestation of intention, or from the circumstances existing at the time, the person to whom the promise or manifestation is addressed knows or has reason to know that the person making it does not intend it as an expression of his fixed purpose until he has given a further expression of assent, he has not made an offer.” There can be no contract unless the minds of the parties have met and mutually agreed upon some specific thing. This is usually evidenced by one party making an offer, which is accepted by the other party.

Discussion. The court wants to strike a balance and make sure that just because someone places an advertisement or has correspondence about a potential sale, it does not bind that person into a legally enforceable contract to sell that item. The offeror has the power to accept.