Tyra v. Cheney
129 Minn. 428 (1915)
Rule of Law:
A contract is not formed when one party accepts an offer knowing that the other party made a unilateral mistake in that offer, as there is no true meeting of the minds.
Facts:
- The Defendant held a contract to repair a school building.
- In late July 1912, the Plaintiff verbally gave the Defendant's estimator a bid totaling approximately $4,025 for roofing and sheet metal work.
- On August 3, 1912, the Plaintiff submitted a formal written bid but, through an oversight, omitted a $963 item, resulting in a written bid of $3,062.
- The Defendant subsequently informed the Plaintiff that his bid was too high.
- Later, in September 1912, the Defendant told the Plaintiff to 'go ahead with the work' on the project covered by the bid.
- The Plaintiff proceeded to perform the work and furnish the materials for the project.
Procedural Posture:
- Plaintiff sued Defendant in a Minnesota trial court to recover the reasonable value of labor and materials.
- Defendant pleaded the existence of an express contract based on the written bid and tendered a judgment for the unpaid balance of $27.
- A jury returned a verdict in favor of the Plaintiff.
- The Defendant filed a motion for judgment or, in the alternative, for a new trial.
- The trial court denied the Defendant's motion.
- The Defendant (as appellant) appealed the trial court's order to the Supreme Court of Minnesota.
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Issue:
Does a binding contract form when one party accepts a written bid that they know, or should have known, contains a unilateral mistake and does not reflect the bidder's true intent?
Opinions:
Majority - Holt, J.
No. A binding contract does not form where one party accepts an offer knowing it was made in mistake. If the defendant was aware of the plaintiff's mistake in the written bid and knew the plaintiff was unaware of it, the defendant had no right to claim their minds met upon the mistakenly stated price. One cannot 'snap up' an offer or bid knowing it was made in error. Because there was a failure to enter a binding contract due to the lack of a meeting of the minds, the plaintiff is entitled to recover the reasonable value of the work performed, rather than being bound by the mistaken written bid.
Analysis:
This decision reinforces the legal principle that contract formation requires a genuine 'meeting of the minds' and is not merely a mechanical process of offer and acceptance. It establishes that a party's knowledge of another's unilateral mistake can prevent a valid contract from being formed, importing a good faith requirement into the acceptance stage. This precedent protects mistaken bidders from being taken advantage of by opportunistic offerees and allows for recovery based on quantum meruit (reasonable value) when work is performed under such circumstances.
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