Scoular Co. v. Denney - 151 P.3d 615 (Colo. App. 2006)

Rule:

The Colorado Code, with one exception, does not alter the general rule that communication is required of the acceptance of the offer for a bilateral contract while it is not required of the acceptance of the offer for a unilateral contract. The exception to the general rule applies when the offeree relies on the beginning of performance as the mode of acceptance, and, in that instance, the offeree must notify the offeror of the acceptance within a reasonable time.

Facts:

Defendant Doug Denney and plaintiff Scoular Company discussed a forward contract for 15,000 bushels of millet. Although defendant indicated a desire to sell his millet, which had not yet been grown, at $ 5 per hundredweight of product, plaintiff declared that that price was not then available. Four days later, however, plaintiff, relying on defendant’s offer, sold the millet to a buyer who purchased it at a rate sufficient to meet defendant’s price. Plaintiff’s general manager mailed defendant a written and signed purchase contract. Defendant did not check his mail. Consequently, he never signed or returned the purchase contract. When the millet was harvested and ready for delivery in the fall of 2002, the market price of millet had trebled. Defendant delivered his millet not to plaintiff, but to a grain operator in Paoli, Colorado. Thereafter, plaintiff instituted the present action for monetary damages, based on claims of breach of contract, promissory estoppel, and unjust enrichment. After a bench trial. The trial court determined that defendant had entered into and breached an enforceable contract to sell 15,000 bushels of millet to plaintiff at $ 5 per hundred weight of product and plaintiff was entitled to recover damages from defendant’s breach. Defendant appealed, arguing that the trial court erred when it found that plaintiff had accepted defendant’s offer. 

Issue:

1. Did the defendant made a firm offer to the plaintiff? 
2. Did the plaintiff accept defendant’s offer? 

Answer:

1) Yes. 2) No, a remand was necessary.

Conclusion:

The court held that the defendant had made a "firm offer" by agreeing to sell a set amount of bushels, at a set price. The defendant’s oral offer to the plaintiff could have, if timely accepted, formed the basis of a valid contract. However, a remand for further findings was necessary as to whether the plaintiff had accepted the defendant's offer. According to the court, the trial court erred in concluding that the plaintiff’s act in in contracting to sell millet to a third party constituted acceptance. The court noted that the plaintiff did not immediately pay the defendant as a result of its contract with the third party, and the plaintiff, which dealt with a great number of farmers and in vast amounts of grain, did nothing in or with the contract with the third party to earmark the defendant’s millet as the source of the millet sold there.