Akers v. J.B. Sedberry, Inc.
286 S.W.2d 617 (1955)
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Rule of Law:
An offer made during a face-to-face conversation is ordinarily deemed to be terminated at the close of that conversation and cannot be accepted thereafter, unless the circumstances or the offeror's words indicate an intention for it to remain open.
Facts:
- J. B. Sedberry, Inc., a corporation controlled by Mrs. M. B. Sedberry, employed Charles William Akers and William Gambill Whitsitt under separate five-year written contracts in 1947.
- Akers and Whitsitt worked at a manufacturing plant in Texas, where friction developed with the local manager.
- On Friday, September 29, 1950, Akers and Whitsitt flew to Tennessee for an unannounced, day-long meeting with Mrs. Sedberry to discuss the company's financial and operational issues.
- At the beginning of the conference, to demonstrate their good faith, Akers and Whitsitt offered to resign on ninety-days' notice.
- Mrs. Sedberry did not verbally accept or reject the offer but instead "pushed the offers aside" and proceeded with a full discussion of business operations, giving Akers and Whitsitt instructions for future work.
- Following the meeting, Akers and Whitsitt flew back to Texas to carry out Mrs. Sedberry's instructions.
- On Monday, October 2, 1950, three days after the meeting, Mrs. Sedberry sent telegrams to both Akers and Whitsitt stating that she accepted their offers of resignation, effective immediately.
Procedural Posture:
- Charles William Akers and William Gambill Whitsitt (complainants) sued J. B. Sedberry, Inc. and Mrs. M. B. Sedberry (defendants) in the Chancery Court of Tennessee (a court of first instance) for breach of contract.
- The Chancery Court entered a decree in favor of the complainants, awarding them damages.
- The defendants appealed this decree to the Tennessee Court of Appeals by suing out a writ of error.
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Issue:
Does an employee's offer to resign, made during a face-to-face meeting with an employer, remain open for acceptance after the meeting has concluded and the parties have gone their separate ways?
Opinions:
Majority - Felts, J.
No. An employee's offer to resign made during a face-to-face conversation does not remain open for acceptance after the meeting has ended. The employer's purported acceptance was a wrongful discharge and a breach of contract. An employee's resignation is an offer which, like any other offer, must be accepted before it becomes binding. An offer terminates when it is rejected by the offeree or is not accepted within a reasonable time. For an offer made in a face-to-face conversation, the reasonable time for acceptance is presumed to last only until the end of that conversation. In this case, Mrs. Sedberry's conduct—ignoring the offer and proceeding to discuss future business plans—constituted a rejection. Because the offer was rejected and, in any event, had expired at the conclusion of the meeting, there was no existing offer for Mrs. Sedberry to accept three days later. Therefore, her telegrams were not an acceptance but a wrongful termination of the employment contracts.
Analysis:
This case provides a clear application of classic contract law principles regarding the duration of an offer to the employment context. It establishes a strong presumption that a verbal offer made in conversation expires when that conversation ends, absent an explicit statement to the contrary. This holding protects offerors from having their verbal offers held open indefinitely, forcing offerees to either accept promptly or risk the offer's termination. The decision also underscores that an offer can be rejected by conduct, not just by explicit words, providing a practical guide for interpreting parties' intentions during negotiations.
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