Dickey v. Hurd
33 F.2d 415, 1929 U.S. App. LEXIS 2735 (1929)
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Rule of Law:
An acceptance of an offer must be unequivocal, unconditional, and without variance from the terms of the offer to form a binding contract; introducing new conditions or terms, even those that might seem implicitly understood in a real estate transaction, can constitute a counteroffer.
Facts:
- On June 30, 1926, John W. Dickey wrote to Lyman C. Hurd, reiterating his interest in buying Hurd's land on the Savannah River and asking for a price.
- On July 8, 1926, Hurd replied to Dickey, offering to sell his land (deeds calling for 1,266 acres) for $15 per acre cash, and gave Dickey until July 18, 1926, to accept the offer.
- On July 12 and July 15, 1926, Dickey sent letters to Hurd indicating his understanding that he had until July 18 to give an "answer" or "definite answer," not to make a cash payment.
- On July 17, 1926, Dickey telegraphed Hurd, stating he would "buy the property at your price and terms" but immediately added he would send $500 on Monday "to be held by you subject to examination of titles by my attorneys and survey of property to show acreage you claim."
- On July 20, 1926 (Tuesday), Dickey mailed Hurd a confirmation letter, the $500 draft, and a duplicate contract he had signed, which explicitly stated the sale was contingent on attorney approval of title and provided a right to rescind if title was not approved.
- On July 22, 1926, Hurd notified Dickey that his offer had expired because Dickey had "not complied with requirements."
Procedural Posture:
- John W. Dickey (plaintiff) filed a suit in equity against Lyman C. Hurd (defendant) in the District Court for Massachusetts, seeking specific performance of an alleged contract for the sale of land.
- After Lyman C. Hurd died, Lizzie E. Hurd and Edith L. Hurd, his executrices, were substituted as defendants.
- The District Court for Massachusetts issued a decree finding that a contract existed between the parties and ordered specific performance in favor of John W. Dickey.
- Cross-appeals were filed from this decree; Hurd's executrices appealed the specific performance order (appellants in No. 2349), and Dickey cross-appealed the denial of his motion to add new parties (appellant in No. 2348).
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Issue:
Does a buyer's response to an offer to sell land constitute a valid acceptance when it states an intent to buy "at your price and terms" but then adds conditions regarding title examination by attorneys and a property survey to verify acreage, thereby introducing new terms not present in the original offer?
Opinions:
Majority - Bingham, Circuit Judge
No, the buyer's response did not constitute an unequivocal and unconditional acceptance of the offer because it introduced new terms. The court first clarified that Hurd's offer was for a bilateral contract, meaning it required notice of acceptance by July 18, not cash payment, based on Dickey's prior communications and Hurd's silence. However, Dickey's July 17 telegram, despite initially stating acceptance of the price and terms, immediately added new conditions: that a $500 partial payment would be held 'subject to examination of titles by my attorneys and survey of property to show acreage you claim.' The court found that these were new terms, not merely legal implications. Hurd's offer did not implicitly agree to furnish a title whose 'legality and merchantability' must meet the subjective approval of Dickey's counsel, granting Dickey the right to rescind if not approved. Furthermore, the offer was for an estimated acreage of the entire tract, not a sale by exact measurement, and therefore did not imply a right to a survey or an extension of time for that purpose. Since Dickey's acceptance introduced conditions that varied the terms of the original offer, it constituted a counteroffer, which Hurd validly rejected. The District Court's decree for specific performance was therefore erroneous.
Dissenting - Anderson, Circuit Judge
Yes, the buyer's response was a valid acceptance because the added language merely stated legal implications of a land sale contract. Judge Anderson concurred with the majority's finding that Hurd's offer required a notice of acceptance by July 18, not a cash payment. He noted that Hurd's repudiation of the offer was based solely on Dickey's failure to make cash payment within that timeframe, which, in his view, should have led to affirming the decision for Dickey on grounds of estoppel. Judge Anderson believed that the language in Dickey's telegram regarding title examination by attorneys and a survey to verify acreage simply articulated 'unnecessary statement[s] of the legal implications' inherent in a contract for land, where a seller must give merchantable title and acreage is often subject to verification, especially when stated as an estimate. He argued that an offer to sell land 'by the acre' is generally subject to verification, and Hurd's mention of '1,266 acres' fairly implied verification. Therefore, Dickey's acceptance was complete and binding, and specific performance could have been enforced against him. The fact that Dickey's attorneys later drafted a formal contract with these terms was immaterial, as the binding contract was already formed by the letter and telegram.
Analysis:
This case strongly reinforces the 'mirror image rule' in contract law, illustrating that an acceptance must precisely match the offer's terms without introducing any new conditions. It provides a critical distinction between terms that are truly implied by law in a contract (which might not defeat an acceptance) and explicit conditions added by the offeree that alter the original proposal, effectively transforming an acceptance into a counteroffer. For law students, this case is a stark reminder of the meticulousness required in contract formation, especially in real estate transactions, where seemingly reasonable additional clauses can prevent the formation of a binding agreement if not explicitly included or clearly implied in the original offer.
