Mesaros v. United States
845 F.2d 1576 (1988)
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Rule of Law:
An advertisement of goods for sale at a certain price is not a binding offer that can be accepted to form a contract, but is merely a solicitation of offers from potential customers.
Facts:
- In 1985, Congress authorized the U.S. Mint to produce and sell a limited number of Statue of Liberty commemorative coins, including a maximum of 500,000 five-dollar gold coins.
- In November and December 1985, the U.S. Mint mailed advertising materials and order forms to potential customers, including Mary and Anthony Mesaros.
- The order form stated, 'YES, Please accept my order for the U.S. Liberty Coins I have indicated,' and noted that the Mint reserved the right to limit quantities.
- On November 26, 1985, Mary Mesaros submitted an order for several coins, including the five-dollar gold coins, to be paid for with her husband Anthony Mesaros's credit card for a total of $1,675.
- Demand for the gold coins vastly exceeded the 500,000 supply, and the Mint was overwhelmed with orders, experiencing significant difficulties processing the large volume of credit card orders.
- Before the Mesaroses' credit card order could be processed, the entire supply of 500,000 gold coins was exhausted by filling orders paid for by check and money order, some of which were submitted after the Mesaroses' order.
- On February 18, 1986, the Mint sent the Mesaroses a form letter stating it was 'unable to process' their credit card order and that the gold coins were no longer available.
Procedural Posture:
- Mary and Anthony Mesaros filed a class action lawsuit against the United States and the U.S. Mint in the U.S. District Court for the Southern District of Georgia, a court of first instance.
- The defendants (United States et al.) filed a motion to dismiss or, in the alternative, for summary judgment.
- The district court granted summary judgment for the defendants.
- The Mesaroses (plaintiffs-appellants) appealed the district court's decision to the U.S. Court of Appeals for the Eleventh Circuit, an intermediate appellate court.
- On the defendants' motion, the case was transferred to the U.S. Court of Appeals for the Federal Circuit for a decision.
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Issue:
Does a government agency's advertisement and mail-in order form for a product with a limited supply constitute a binding offer that a customer accepts upon submission of the form, thereby creating an enforceable contract?
Opinions:
Majority - Skelton, Senior Circuit Judge
No, a government agency's advertisement and order form is not a binding offer but rather a solicitation for an offer from the customer. The court reasoned that it is a well-established principle of contract law that advertisements and circulars aimed at the general public are mere invitations to deal, which create no power of acceptance in the recipient. The objective reasonableness of the Mesaroses' belief that the advertisement was an offer is undermined by the language on the order form itself, which stated, 'YES, Please accept my order,' clearly indicating that the customer was making the offer for the Mint to accept. To hold otherwise would bind advertisers to an excessive number of contracts for goods far exceeding their available supply, a result that is particularly untenable here where Congress explicitly limited the number of coins. The court distinguished this case from precedents like Lefkowitz, where an advertisement was held to be an offer, because the Mint's materials were not for a specific item on a 'first-come, first-served' basis but were a general solicitation for a mass-produced, limited-edition product. Therefore, no contract was formed upon the Mesaroses' submission of their order form.
Analysis:
This case reinforces the traditional contract law distinction between an offer and an invitation to make an offer. It affirms that mass advertisements, even from the government, are generally considered solicitations, protecting sellers from being contractually bound to every single respondent, especially when supply is limited. The decision underscores the importance of the specific language used in marketing materials and order forms in determining the parties' intent. By treating the government agency like any other commercial seller, the ruling provides a clear and predictable framework for commercial transactions involving mass marketing.
