Greenberg v. Stewart
236 N.W.2d 862 (1975)
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Rule of Law:
An acceptance of an offer must be absolute, unconditional, and not introduce any new or additional terms. A purported acceptance that modifies the terms of the original offer is a rejection of that offer and constitutes a counteroffer.
Facts:
- Alice Stewart, who owned an interest in a piece of land, expressed a desire to sell it.
- On June 22, 1973, Arthur Greenberg submitted a written offer to Stewart to purchase the 232-acre property for $400 per acre, outlining several terms and conditions, and setting an acceptance deadline of July 10, 1973.
- On August 6, 1973, well after the deadline, Stewart responded by letter, stating Greenberg's offer was 'acceptable subject to' five specific modifications, including changes to the division of rent, making it a cash-only sale, and requiring a 10% escrow deposit.
- Stewart's letter directed her representative to prepare a formal contract and told Greenberg to notify the representative if her new terms were acceptable.
- On August 15, 1973, Greenberg sent Stewart a letter with a partially executed 'Agreement of Purchase and Sale' that he had signed.
- This new agreement incorporated Stewart's changes but also introduced a new provision: Stewart would receive all 1973 cash rents but would also be required to pay all 1973 property taxes.
- Stewart never signed or returned the agreement sent by Greenberg.
- Stewart's financial advisor later informed Greenberg that the property would be sold at a public auction, which was subsequently held, and the property was sold to Darrel Adams and Charles Bateman.
Procedural Posture:
- Greenberg (plaintiff) sued Stewart, Adams, and Bateman (defendants) in the District Court of Grand Forks County, seeking specific performance of the alleged contract.
- The defendants filed answers, and the parties engaged in discovery, including interrogatories and depositions.
- Defendant Stewart filed a motion for summary judgment to dismiss Greenberg's action.
- The trial court granted Stewart's motion for summary judgment, finding no genuine issue of material fact and ruling as a matter of law that no contract existed.
- Greenberg (appellant) appealed the trial court's grant of summary judgment to the Supreme Court of North Dakota.
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Issue:
Do a series of letters and a partially executed purchase agreement, in which each party proposes modifications to the other's terms, constitute a legally enforceable contract for the sale of land?
Opinions:
Majority - Sand, Judge.
No, the series of communications did not form an enforceable contract because there was never an unconditional acceptance of an offer by either party. To form a contract, an acceptance must be a 'mirror image' of the offer, complying with all its terms without deviation. A qualified acceptance that introduces new terms acts as a rejection of the original offer and becomes a counteroffer. Here, Stewart's August 6 letter was not an acceptance of Greenberg's June 22 offer; it was a counteroffer because it proposed several modifications. Similarly, Greenberg's August 15 letter and proposed agreement was not an acceptance of Stewart's counteroffer, but rather a second counteroffer, as it altered the terms regarding 1973 rents and taxes. Since Stewart never accepted Greenberg's final counteroffer, there was no 'meeting of the minds' and thus no contract was formed.
Analysis:
This case serves as a classic illustration of the common law 'mirror image rule' for contract formation, particularly in the context of real estate transactions that require a written agreement. The decision reinforces that any deviation, no matter how seemingly minor, from the terms of an offer in a purported acceptance will prevent the formation of a contract. It establishes that such a response is legally considered a counteroffer, which effectively terminates the original offer. This precedent emphasizes the need for absolute and unequivocal acceptance and cautions that a series of negotiations with back-and-forth modifications does not create a binding agreement until one party accepts the other's final proposal without change.
