Town of Lindsay v. Cooke County Electric Cooperative Ass'n
17 Tex. Sup. Ct. J. 83, 1973 Tex. LEXIS 222, 502 S.W. 2d 117 (1973)
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Rule of Law:
When an offer prescribes a specific time and manner of acceptance, the offeree's acceptance must comply with those terms to create a binding contract. An alternative method of acceptance is not effective unless the offeror subsequently assents to it.
Facts:
- Cooke County Electric Cooperative Association (the Association) had been providing electricity to the area that incorporated as the Town of Lindsay in 1959.
- On March 24, 1960, the Town of Lindsay enacted an ordinance granting the Association a 50-year franchise.
- The ordinance stipulated that for the franchise to become effective, the Association must 'file its written acceptance of this franchise within thirty (30) days after the passage of this ordinance.'
- Within days, the Association mailed a check for the 2% gross receipts tax required by the ordinance, accompanied by a voucher stating the payment was for the 'Gross Receipts Tax for the Year 1960.'
- On April 20, 1960, the Association's Board of Directors formally approved the franchise and instructed its attorney to file a formal written acceptance, but there is no evidence this was ever done.
- After the 30-day acceptance period expired, the Town Council repealed the franchise ordinance on June 30, 1960.
- The Town then refunded the tax payment to the Association, and the Association accepted and deposited the refunded check.
Procedural Posture:
- The Town of Lindsay sued the Cooke County Electric Cooperative Association in the district court (trial court) to require the removal of its lines and equipment.
- Following a trial, a jury found that the Association had filed a written acceptance and that both parties intended the tax payment as an acceptance.
- The trial court entered a judgment on the verdict in favor of the Association.
- The Town of Lindsay, as appellant, appealed to the Court of Civil Appeals, which affirmed the trial court's judgment.
- The Town of Lindsay, as petitioner, then sought review from the Supreme Court of Texas.
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Issue:
Does an offeree's payment of a required fee, accompanied by a voucher, constitute the 'written acceptance' required by the express terms of an ordinance offering a franchise, thereby creating a binding contract?
Opinions:
Majority - Walker, Justice
No. To form a contract, an offeree must comply with the specific terms of acceptance prescribed in the offer. The ordinance explicitly required a 'written acceptance' to be filed within 30 days. The Association's act of paying the gross receipts tax, even with an accompanying voucher, does not constitute a 'written acceptance' as mandated by the ordinance. Because the offeror (the Town) did not assent to this different method of acceptance, no contract was formed. The court relies on the established contract principle that an acceptance must mirror the terms of the offer, including the prescribed method of acceptance.
Dissenting - McGee, Justice
McGee, J., notes his dissent.
Analysis:
This decision reaffirms the classic common law 'mirror image rule' of contract formation, emphasizing that the offeror is the master of the offer. The court clarifies that conduct implying acceptance, such as performance or payment, cannot substitute for a specifically mandated method of acceptance. This holding underscores the importance of strict compliance with the procedural requirements of an offer to ensure the creation of an enforceable contract. For future cases, it serves as a strong precedent that courts will not infer acceptance from conduct when an express and exclusive manner of acceptance is specified.
