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Southworth v. Oliver

Citation. 878 F.2d 1445
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Brief Fact Summary.

The Defendant, Oliver (Defendant), began negotiations with the Plaintiff, Southworth (Plaintiff) and a third party. When negotiations became complicated the Defendant rescinded the offer to avoid disagreement. Plaintiff claims the offer was valid and accepted.

Synopsis of Rule of Law.

There is a valid offer if a price quotation is addressed to a definite group [this is a change] and includes explicit language such as price, exact location, terms and sale date because a reasonable person would believe that the Seller is making an offer to sell.


Defendant decided to sell some of their property and some of their Forest Service grazing permits. Defendant stopped by Plaintiff’s house and asked if Plaintiff was interested in buying the property. Plaintiff said yes. Defendant said he thought Plaintiff would be interested in the land and Holliday, a neighbor, would be interested in the permits. Defendant showed a map to Plaintiff showing the land that was for sale. This conversation ended with the understanding that Defendant would develop the value and price and Plaintiff would get the financing arranged for the purchase. Defendant said that he would send information to the Plaintiff about what price he wanted so as to “give him ‘notice’ of ‘what he wanted for the land.’” Defendant called Holliday and Holliday said he was not interested in the land only the permits. Plaintiff called Defendant almost a month later to ask if Defendant still planned to sell. Defendant said yes, he had some delays, but he would soon have infor
mation to establish the value of the land. Plaintiff said he had made all of the financial arrangement and he was ready to make an offer. Days later Plaintiff received a letter from Defendant that included the asking price and explicit terms and the date of sale for the property as well as the asking price for the permits. There was a second enclosure with a similar property. Defendant sent the letter to Holliday and two others. Defendant claimed the letter was not made as an offer and the intention was to sell property and permits together. Plaintiff immediately responded to letter “I accept your offer.” Holliday called Plaintiff and said he needed to buy some of that land and Plaintiff said he would work something out with Holliday. Defendant was informed by Holliday that he and Plaintiff were having trouble with the exchange, but that they would work it out. Defendant decided to pull the offer because he did not want to arbitrate a disagreement between his neighbors. Defendant sent
a letter to Plaintiff saying that the first letter was not a firm offer to sale. Defendant said he did not wish to sell the permits separate from land. Defendant claimed in the letter that it would not constitute an enforceable contract.


Was Defendant’s letter to Plaintiff an offer for sale?


Yes. Affirmed.
The “surrounding circumstances” under which this letter was prepared by Defendants and sent by them to Plaintiff were such to have led a reasonable person to believe that Defendant’s were making an offer to sell to Plaintiff the lands described in the letter’s enclosure and upon the terms as there stated.
If a price quotation is expected, addressed to a definite group and includes explicit language such as price, exact location, terms and sale date a reasonable person would believe that Seller is making an offer to sell. It is the manifestation of a previous intention that is controlling, rather than a person’s actual intent. The failure to add the word “offer” and the use of the word “information” are also not controlling and an offer may be made to more than one person


Murray on Contracts states: “The most important of the remaining guides is the language used. If there are no words of promise, undertaking or commitment, the tendency is to construe the expression to be an invitation for an offer or mere preliminary negotiations in the absence of strong, countervailing circumstances.”

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