Panhandle E. Pipe Line Co. v. Smith

637 P.2d 1020

 

RULE:

One who modifies an offer usually rejects the offer and makes a counteroffer, and no contract exists unless the original offeror accepts the counteroffer. An offer must be accepted unconditionally; but there is an exception to the rule. An acceptance is still effective if the addition only asks for something that is implied from the offer and is therefore immaterial.

FACTS:

Appellant employer challenged the judgment of the District Court of Weston County (Wyoming), which found in favor of appellee employee and granted damages to the employee in his breach of employment contract action. After firing the employee, the employer later offered in a letter to withdraw the discharge. The employee signed the offer letter and added some handwritten notations. The trial court found that the employer breached the contract and awarded damages to the employee.

ISSUE:

Did the employer orally modify its written offer during its telephone conversation with the employee?

ANSWER:

No.

CONCLUSION:

The court affirmed the trial court's judgment in favor of the employee in his breach of contract action against the employer and affirmed the award of damages. The court held that a contract existed and had been breached. Because the employer failed to clearly express in the communicated offer its intention to exclude all other modes of acceptance, the court found that the employer did not orally modify its offer during its telephone conversation with the employee. Thus, the court ruled that the employee's handwritten additions to the letter did not modify the offer and was not a counteroffer. The court determined that neither party agreed to submit to arbitration and that the employer waived any right it had to arbitration. The court found that the damage award was supported by sufficient evidence. In reviewing the damages, the court stated that the fact that some of the lost benefits of the employee's job were intangible did not mean that he could not recover for their loss because they were injuries caused by the employer's breach of contract.

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