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Pride v. Lewis - 179 S.W.3d 375 (Mo. Ct. App. 2005)

Rule:

Before a plaintiff can establish a breach of contract, he or she must first establish the existence of a contract. A contract does not exist without a definite offer and a "mirror-image" acceptance. Any acceptance that includes new or variant terms from the offer presented amounts to a counteroffer and a rejection of the original offer. The unequivocal acceptance of the offer is fundamental to the existence of a contract. 

Facts:

Respondents Andrew and Joyce Kay Pride, husband and wife, owned a house located in Nodaway County. It rented for $450 per month. Mr. and Mrs. Pride were informed that Mr. Lewis made an offer to purchase the house for $ 55,000, with earnest money in the amount of $ 1500, with conventional bank financing. The contract also stated that Mr. and Mrs. Pride were selling the house to appellant Larry Lewis and his wife, Issoline Lewis. Mr. Lewis signed the contract on April 9, 2003. His realtor also signed the contract, although the date was not indicated. Mrs. Lewis never signed the contract. Mr. and Mrs. Pride, as well as their realtor, signed the real estate contract on April 11, 2003. Upon signing the contract, Mr. and Mrs. Pride informed their tenant that she would have to vacate the house by June 1, 2003. The contract provided by Mr. Lewis had a closing date of May 15, 2003. Mr. and Mrs. Pride changed this date, by hand, to June 1, 2003. This change was initialed by Mr. and Mrs. Pride, but not by Mr. Lewis or Mrs. Lewis. Mr. and Mrs. Pride became aware that there was a problem with closing on the property in June, when the closing was scheduled to occur. They, along with their realtor, were prepared to close on the property but neither Mr. Lewis, Mrs. Lewis, nor their realtor ever appeared. Mr. and Mrs. Pride's realtor contacted Mr. Lewis's realtor and was informed that Mr. Lewis had not responded to phone calls or otherwise communicated with his realtor. When the closing with Mr. Lewis failed to occur, Mr. and Mrs. Pride sent him a letter notifying him of his default and their electing not to take the $ 1500 earnest money as damages. The house was eventually sold in June 2004 for $ 40,000. Mr. and Mrs. Pride sued Mr. Lewis for breach of contract. They sought damages for the difference between the $ 55,000 contract price with Mr. Lewis and the $ 40,000 for which the house actually sold, for the lost rent the year they were unable to find another tenant, and for attorney's fees, as provided in the contract. The trial court entered judgment in favor of Mr. and Mrs. Pride and awarded them $ 20,900 in damages. Lewis appealed, contending that the trial court erred in finding a breach of contract because he and his wife were both intended to be parties to the contract but Mrs. Lewis never signed the contract. He also contended that the Prides had made a counteroffer when they changed the closing date from May 15, 2003, to June 1, 2003, which he did not accept.

Issue:

Did would-be home purchaser Mr. Lewis breach a contract of sale, thus entitling disappointed sellers Mr. and Mrs. Pride to damages?

Answer:

No

Conclusion:

In reversing the trial court's judgment, the Court of Appeals of Missouri stated that respondent Prides had made a counteroffer when they changed the closing date, and because the counteroffer was never accepted by appellant Lewis, a contract was never formed. The Prides erroneously assumed that silence was equivalent to acceptance. The Court stated that it could not create a contract where one did not exist, especially given the importance of an "unequivocal acceptance of the offer."

As for the applicable standard of review, the Court explained that the judgment of the trial court will be affirmed unless it is not supported by substantial evidence, is against the weight of the evidence, or erroneously declares or applies the law. An appellate court independently evaluates the trial court's application of the law in determining whether there was a misapplication of the law.

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