Crook v. Cowan
64 N.C. 743 (1870)
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Rule of Law:
When an offer to buy goods is made to a seller, the seller's act of shipping the goods in conformity with the offer's terms constitutes a valid acceptance that forms a binding contract. A separate, promissory communication of acceptance is not required when the offer can be reasonably interpreted as inviting acceptance by performance.
Facts:
- The plaintiff was a carpet manufacturer and vendor who held their products out for sale.
- The defendant sent the plaintiff a letter containing an unconditional and specific order for carpets.
- The defendant's order designated the Express company as the agent to receive and transport the carpets, and instructed the plaintiff to have the Express company collect payment upon delivery (C.O.D.).
- The plaintiff did not send a separate communication, such as a letter or telegram, to the defendant to confirm acceptance of the order.
- Seven days after receiving the order, the plaintiff delivered carpets matching the defendant's order to the designated Express company for shipment.
- After the goods had been shipped, the defendant sent a telegram to the plaintiff inquiring if the order would be filled.
- The defendant never went to the Express office to inquire about the shipment and ultimately did not accept or pay for the carpets.
Procedural Posture:
- The plaintiff (carpet vendor) sued the defendant (purchaser) in a trial court for the price of the carpets sold and delivered.
- The trial court likely entered a judgment in favor of the plaintiff.
- The defendant appealed the trial court's judgment to the state's highest court.
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Issue:
Does shipping goods in exact conformity with an unconditional purchase order constitute a valid acceptance of the offer, thereby forming a binding contract, even without a separate notice of acceptance sent to the offeror?
Opinions:
Majority - Read, J.
Yes. When an unconditional and specific order for goods is filled exactly as requested, the act of performance constitutes acceptance, and a binding contract is formed. The defendant's letter was an offer to buy. The plaintiff's act of filling the order and delivering the goods to the carrier designated by the defendant was the acceptance. This action completed the contract, and the property passed to the defendant at the moment of delivery to the carrier. The defendant’s order, by specifying shipment instructions (C.O.D. via Express), implicitly invited acceptance by performance rather than by a promissory notice. Requiring a separate mailed acceptance would lead to an endless loop of confirmations, a problem addressed in cases like Adams v. Lindsell. Therefore, sending the goods was the most appropriate and effective form of notification and acceptance in this context.
Dissenting - Rodman, J.
No. A mere offer to purchase does not become a binding contract until the vendor assents and communicates that assent to the proposed buyer in a reasonable time. The act of shipping the goods, especially after a delay for manufacturing, is not a substitute for a communicated acceptance. This leaves the offeror bound to the potential contract while the offeree remains free, creating uncertainty. The carrier was designated as an agent for transportation, not as an agent to receive notice of contract formation on the defendant's behalf. Established commercial practice and principles analogous to guaranty contracts require actual notice of acceptance to be given to the offeror to form a contract.
Analysis:
This decision solidifies the contract law principle of acceptance by performance, particularly in the context of sales of goods. It establishes that where a purchase order does not demand a promissory acceptance, the seller can accept the offer and form a binding contract simply by performing—in this case, by shipping the goods. This ruling is significant for mail-order and distance-selling transactions, as it clarifies that the contract is formed and risk of loss can pass to the buyer upon the seller's delivery to a carrier. The case highlights the importance of the offeror specifying the desired method of acceptance if they require a communicated promise rather than performance.
