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Fujimoto v. Rio Grande Pickle Co.

United States Court of Appeals Fifth Circuit
414 F.2d 648 (1969)
ELI5:

Rule of Law:

When an offer for a contract is silent as to the required mode of acceptance, any mode of acceptance that is reasonable under the circumstances and effectively communicates the offeree's assent to the offeror is valid, including acceptance by performance.


Facts:

  • Rio Grande Pickle Company hired George Fujimoto as a planting supervisor and Jose Bravo as a labor recruiter.
  • To prevent them from leaving, Rio Grande orally offered them a salary plus a 10% profit-sharing bonus.
  • At Bravo's request for a written agreement, the company president prepared and sent written employment contracts to both men.
  • The written contracts included the 10% bonus provision but did not specify any particular method for acceptance.
  • Fujimoto and Bravo both signed their respective contracts but did not return the signed documents to the company.
  • Believing they were working under the terms of the new bonus contracts, both men continued to work for Rio Grande for 14 months.
  • During this 14-month period, neither Fujimoto nor Bravo expressed any further dissatisfaction with their compensation.
  • On November 30, 1966, Fujimoto and Bravo resigned from their positions at Rio Grande.

Procedural Posture:

  • George Fujimoto and Jose Bravo sued Rio Grande Pickle Company in federal district court for breach of contract.
  • The case was tried before a jury, which was asked to answer special interrogatories.
  • The jury found that both Fujimoto and Bravo had entered into written contracts with the company in October 1965.
  • The jury awarded damages of $8,964.25 to each plaintiff.
  • Rio Grande Pickle Company, as the appellant, appealed the judgment to the U.S. Court of Appeals for the Fifth Circuit. Fujimoto and Bravo are the appellees.

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Issue:

Does an offeree's continuation of employment, after receiving a written contract offer that does not specify a mode of acceptance, constitute a valid acceptance of that offer?


Opinions:

Majority - Goldberg, Circuit Judge

Yes, an offeree's continuation of employment can constitute a valid acceptance of a written contract offer that is silent on the mode of acceptance, provided the conduct clearly expresses an intention to accept and this is known by the offeror. The court reasoned that when an offer does not prescribe an exclusive method of acceptance, any reasonable method that conveys assent is sufficient. Here, Fujimoto and Bravo had threatened to quit over compensation, received the bonus offers, and then continued to work for 14 months without complaint. This continued performance was an overt act that clearly expressed their intention to accept the specific offer and was known by Rio Grande, creating a valid and binding contract.



Analysis:

This case reinforces the principle of acceptance by performance and the objective theory of contracts, particularly within the employment context. It establishes that an offeror cannot use an offeree's failure to adhere to a technical, unstated formality (like returning a signed document) to deny the existence of a contract when the offeree's conduct clearly signals acceptance. This decision protects employees who rely on bonus or employment offers and signify their acceptance by continuing to work, preventing employers from later claiming a lack of mutual assent based on a technicality the employer never specified.

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