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MINNESOTA LINSEED OIL CO. v. COLLIER WHITE LEAD CO. - 17 F. Cas. 447

Rule:

Whether the offer be made for a time certain or not, the intention or understanding of the parties is to govern.

Facts:

Parties negotiated a contract to sell an article which fluctuates in price using a telegraph mode of communication. An offer was made to which the receiving party accepted the offer via telegraph. Acceptance was deposited in the telegraph office. Nevertheless, upon receipt of the seller, he no longer agreed to the terms earlier provided in the telegraph. The buyer alleged that the contract was consummated immediately upon acceptance of the offer.

Issue:

Was the defendant's deposit of the telegraph done within reasonable time that it consummated the contract?

Answer:

No

Conclusion:

The court held that acceptance of an offer by letter or by telegraph completes the contract, when such acceptance is put in the proper and usual way of being communicated by the agency employed to carry it and that when an offer is made by telegraph, an acceptance by telegraph takes effect when the dispatch containing the acceptance is deposited for transmission in the telegraph office, and not when it is received by the other party. Nevertheless, it held that when no definite time is stated, then the inquiry as to a reasonable time resolves itself into an inquiry as to what time it is rational to suppose that parties contemplated; and the law will decide this to be that time which as rational men they ought to have understood each other to have had in mind." Applying this rule, the court found that the intention of the plaintiff, in making the offer by telegraph, to sell an article which fluctuates so much in price, must have been upon the understanding that the acceptance, if at all, should be immediate, and as soon after the receipt of the offer as would give a fair opportunity for consideration. As such, the delay here was too long, and manifestly unjust to the plaintiff, for it afforded the defendant an opportunity to take advantage of a change in the market, and accept or refuse the offer as would best subserve its interests. The court ruled in favor of the plaintiff.

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