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Corbin on Contracts

Copyright 2007, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

Supp. To CHAPTER 3 ACCEPTANCE AND REJECTION OF OFFER

1-3 Corbin on Contracts Supp. to § 3.30

Supp. to § 3.30 Acceptance Not Conditional, Even Though Grumbling or Accompanied by a Request or by a New Offer

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(A) The following case cited the predecessor to this section:

(1) Bina v. Providence College, 844 F. Supp. 77 (D.R.I. 1994) , aff'd, 39 F.3d 21 (1st Cir. 1994) . A college made an offer of a tenure track position to a professor, specifying rank and the probationary period required before tenure would be granted. At a meeting where the offer was discussed, the professor objected to the rank and to the length of the probationary period. The court treated this as a rejection of the offer, dismissing the professor's argument that he had made a ''grumbling acceptance.'' The professor had made it ''pellucidly clear'' that the offer was entirely unacceptable. For a ''grumbling acceptance'' to be effective, there ''must be more 'acceptance' than 'grumble'.''

(B) The following cases cite this section:

(1) Massachusetts Housing Finance Agency v. Whitney House Associates, 37 Mass. App. Ct. 238, 638 N.E.2d 1378 (App. Ct. 1994) . MHFA offered an extension to a loan commitment subject to conditions. The letter granting the extension, by its terms, was valid only if signed and returned by the borrower. Sacro, the managing general partner of the borrower, signed his name on the line marked ''Accepted by'' and added to the right of his signature the typewritten message: ''See Attached Letter Dated 12/30/88.'' There Sacro wrote that his acceptance of the extension had been ''signed by me under protest and reserving all my legal rights with respect thereto.'' He also asked for further data about the conditions.

The trial court denied MHFA's motion for summary judgment on the ground, amongst others, that the borrower had not accepted the conditions in the extension. The Appeals Court reversed, granting judgment to MHFA. What Sacro wrote was not a counter-offer. The borrower's reservations were expressed in a side letter which merely expressed distress about the imposition of one of the conditions, and asked for further information concerning it. ''Accepted with prejudice'' communicated no more, ''i.e., that the borrower did not like the condition, expected to talk more about it, but, grudgingly accepted it in preference to having the MHFA commitment expire.'' The borrower also accepted the benefit of the extension documents.

(2) Guzman v. Visalia Community Bank, 71 Cal. App. 4th 1370, 84 Cal. Rptr. 2d 581 (1999) . In a sex discrimination and hostile work environment suit by a former employee, criticism by the former employee's counsel of the former employer's statutory settlement offer did not constitute rejection of the offer.

(3) Ohmer v. Mel Farr Ford, Inc., 2001 Ohio App. LEXIS 3551 (Ohio Ct. App. Aug. 13, 2001) . A buyer who had purchased a truck alleged that it was a ''lemon.'' The truck manufacturer disagreed but offered to replace it in exchange for the difference in price and a claim release. The buyer signed an agreement ''under protest,'' paid the money, and took possession of the new truck. Subsequently, the buyer sued the dealership and the truck maker under Ohio's lemon law. The lower court granted the defendants' motion for summary judgment and the buyer appealed as to the truck manufacturer. The court of appeals affirmed the decision, finding that there was no pre-existing duty to provide a new truck since the manufacturer had disputed the claim that the truck was a ''lemon.'' Rather, the parties had entered into a negotiated settlement with adequate consideration. Although the buyer signed the release ''under protest'' and paid the truck manufacturer the difference in price between the two vehicles, the court held that this was a ''grumbling acceptance'' and not a counteroffer. The court found that the release was valid and that its validity precluded any subsequent suit on any claim encompassed within the release. This case is also noted at § 3.28 of this supplement.