Lawyers' Reports Annotated

Annotation-Time and place of consummation of contract when offer by letter is accepted by telegram, or vice versa.

An earlier discussion of the question to fill, or which it might find it could not under annotation will be found in the fill. The court, in the course of its opinannotation to Lucas v. Western U. Teleg. ion, however, stated that "an acceptance Co. 6 L.R.A. (N.S.) 1016. The question presupposes a definite offer and an unconditional acceptance. The decision in FARMERS' PRODUCE Co. v. SCHREINER, that where there is no direction as to mode of communicating the acceptance of an offer, an offer by mail may be accepted by telegraph or vice versa, and the contract is completed as soon as the letter is mailed or telegram delivered to the telegraph company, while opposed to the doctrine of the Lucas Case, is supported by the few cases collected in the former annotation and in the present annotation, which have either squarely decided the question or intimated the position which the court would have taken had the question been presented. It should be borne in mind, however, that FARMERS' PRODUCE Co. v. SCHREINER would be applicable only to a case where there is no fair and reasonable inference from the offer, or other prior communications, that some other means of acceptance is expected.

In Weld v. Victory Mfg. Co. (1913) 205 Fed. 770, it was held that a telegraphic acceptance of an offer by mail, which offer was subject to withdrawal before execution, made a complete contract of sale as soon as the message of acceptance was filed with the telegraph company, and so a message of withdrawal which was received after the message was sent did not affect the contract, although such message of withdrawal had been filed with the telegraph company twenty minutes earlier than the filing of the message of acceptance, the court stating that the withdrawal of the offer or proposal was not completed by filing with the telegraph company the message, but was effectual for that purpose only when received.

In Stein-Gray Drug Co. v. H. Michelsen Co. (1909) 116 N. Y. Supp. 789, a telegraphic acceptance of an offer by mail was held not to have completed a contract, where a withdrawal of the offer was sent by mail on the same day that the acceptance was telegraphed, but was not received until after the acceptance had been sent; but the decision was based on the court's construction of the offer as a mere invitation to negotiate, or an invitation for an order which it would still have the right to reject or the option

of a contract by letter or by telegraph,
if the latter is a proper means of com-
munication and reaches the party to
whom it is sent, being governed by the
law of the place whence the acceptance
is despatched, and the law of Ohio being
to the effect that a contract is made when
the acceptance is despatched, the plain-
tiff would be entitled to recover (not-
withstanding that on the same day that
plaintiff sent its telegram, the defendant
mailed in New York, to the plaintiff at
Cincinnati, a letter withdrawing its offer
of July 22d), if the defendant's letter
of July 22d had contained all that was
necessary to make a contract, and had
contained an unqualified offer to sell a
specific quantity,
or a state-
ment that defendant had a specific quan-
tity to sell or dispose of, and left no
option on defendant's part to fill any or-
der which plaintiff might decide to send
in response to that letter."

In Emerson v. Stevens Grocer Co. (1910) 95 Ark. 421, 130 S. W. 541, there is a dictum which perhaps may tend to show how that court might view the question if squarely presented. Thus, the court said that "a binding contract of sale may be entered into by letters and telegrams, and when an offer is made either by letter or telegram and such offer is accepted, the contract is complete and binding. Unless the parties have expressly stipulated otherwise, it is not necessary that the offer or the acceptance should be in any particular form."

But where it is the custom of the trade for a seller to notify a purchaser by wire of his acceptance of an order made by wire, the contract is not completed by the mailing of a letter which will not reach the buyer until after the lapse of several days. Ferguson v. West Coast Shingle Co. (1910) 96 Ark. 27, 130 S. W. 527.

And so where one by telegraph ordered a lot of shingles, he was justified in canceling his order after four days, and was not liable as for breach of contract where the acceptance, contrary to custom, was mailed and was not received until a week or ten days after the order was sent, he in the meantime having elected to withdraw the order. (Ark.) Ibid. The court stated that "the undisputed evidence showed a custom 'for the seller to

notify the buyer by wire of the acceptance of his order,' where the order, as in the present case, is made by wire. Appellee did not comply with this custom, and appellant, not knowing whether his order would be filled or not, after waiting four days, canceled same. Under this custom there was no completed contract between appellants and appellee for the purchase of the shingles. Appellee did not notify appellants by wire of the acceptance of the latter's order, and appellants had no notice that their order by wire had been accepted, until they received a letter from appellee containing invoices a week or ten days after the order had been telegraphed. Appellants had the right to rely upon the custom and L.R.A.1916A.

to cancel their order after waiting four days; for, as a matter of law, appellants were warranted in treating a delay of four days to answer the telegram by like method as unreasonable. The nature of the business, the manner in which it was conducted when orders were made by wire, and the usage of the trade as shown by the evidence, made the delay of appellee to answer by wire unreasonable."

This case it will be seen comes within the exception noted as to the effect of the decision in FARMERS' PRODUCE Co. v. SCHREINER, that there must be no fair and reasonable inference that another mode of acceptance is expected, and so the decisions are not in conflict. J. H. B.