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Chaplin v. Consolidated Edison Co. of New York

    Brief Fact Summary.

    Plaintiffs sued Defendant for violation of the Rehabilitation Act of 1973. Defendant offered a settlement agreement, which Plaintiffs rejected. Later, Plaintiffs sent a letter to Defendant stating that they accepted the settlement agreement. Plaintiffs then moved the court to enjoin Defendant to execute the settlement agreement.

    Synopsis of Rule of Law.

    The rejection of an offer extinguishes that offer.

    Facts.

    The Epilepsy Foundation of America and Phyllis Chaplin (Plaintiffs) sued Consolidated Edison Company of New York, Inc. (Defendant) for a violation of the Rehabilitation Act of 1973, 29 U.S.C. § 701. Defendant provided a settlement agreement to Plaintiffs. Plaintiffs notified Defendant that they had objections to the proposed settlement. Defendant provided another letter to Plaintiffs, stating that it was willing to finalize the previously offered settlement agreement, but that if the settlement agreement was not accepted as proposed, Defendant would withdraw all offers to settle. Plaintiffs sent a letter to Defendant stating that they did not accept the offered settlement agreement. Plaintiffs later had a change of heart and sent a second letter to Defendant, stating that they accepted the offer of settlement. Plaintiffs then moved the court to enjoin Defendant to execute the settlement agreement, arguing that their second letter constituted a binding acceptance, creating a contract between Plaintiffs and Defendant to settle the case.

    Issue.

    Whether the rejection of an offer extinguishes that offer.

    Held.

    Yes. Plaintiffs’ motion to enjoin Defendant to execute the settlement agreement is denied. The rejection of an offer extinguishes the offer.

    Discussion.

    Defendant’s letter, which stated that if the settlement agreement was not accepted as proposed Defendant would withdraw all offers to settle, limited the offer to the specific terms provided. Plaintiffs’ first letter, which rejected those specific terms, constituted a rejection of the offer, and the offer was extinguished at that point. By the time Plaintiffs submitted their second letter, attempting to accept the offer, there was no longer any offer to accept.


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