International Filter Co. v. Conroe Gin, Ice & Light Co.
277 S.W. 631 (Tex. Comm'n App. 1925)
A deal that needed the home office's O.K., announced or not
- In one lineEn una línea
- Where the buyer's order was an offer subject to the seller's home-office approval, that approval was the acceptance and the acknowledgment letter was sufficient notice.Cuando una propuesta convierte el pedido del comprador en oferta sujeta a la aprobación de la matriz del vendedor, esa aprobación es la aceptación, y la carta que acusa el pedido dio el aviso que la oferta requería.
- RuleRegla
- The offeror may prescribe how acceptance occurs; where the terms made the offeree's executive approval the act of acceptance, the contract was formed on approval, and notice of acceptance was either not required or was satisfied by the acknowledgment letter sent in the ordinary course.
- Why this case is herePor qué está aquí este caso
- Assigned Sept. 10 with the professor's handout: the offeror controls the manner of acceptance. When the seller's own proposal made the buyer's order an offer requiring approval by the seller's executive officer, that approval (the O.K.) was the acceptance, and the offer did not require formal notice of it beyond what the seller sent.
- Procedural posturePostura procesal
- Seller sued the buyer after the buyer tried to cancel an order for a water filter; the trial court and court of civil appeals held no contract because the seller's acceptance had not been communicated; the Commission of Appeals reversed.
Facts
International Filter’s salesman submitted a written proposal to Conroe Gin for a water-treatment filter. The document stated that it would become a contract when accepted by the purchaser and approved by an executive officer of the seller at its Chicago office. Conroe’s manager signed the acceptance; the seller’s president wrote O.K. on it with the date; the seller then sent a letter acknowledging the order and referring to shipment. Conroe later wrote to cancel; the seller refused the cancellation and sued.
Procedural posture
Judgment for Conroe below on the theory that the seller’s acceptance was never communicated; the Commission of Appeals (opinion adopted by the Supreme Court of Texas) reversed.
Issue
Whether a contract was formed when the seller’s executive officer approved the order, and whether notice of that approval to the buyer was required.
Holding
A contract was formed on approval. The offer, as the parties framed it, made executive approval the act of acceptance and did not make communication of the approval a condition; even if it had, the acknowledgment letter supplied it.
Reasoning
The seller’s proposal, once signed by the buyer, was the buyer’s offer on the seller’s form. An offeror may dispense with notice of acceptance or specify its form. Here the document said approval by the seller’s executive would make it a contract, and the president’s O.K. was that approval. The subsequent letter, sent in the ordinary course, told the buyer the order was accepted; nothing more formal was required.
Rule (own words)
Read the document to find who is offering and what counts as acceptance. If the offer makes the offeree’s internal approval the acceptance, the deal closes when the approval happens, and the usual acknowledgment is all the notice anyone gets.
What-ifs
- The president never wrote O.K. and the seller simply shipped: acceptance by performance, and shipment is notice.
- Conroe’s cancellation reached the seller before the O.K.: revocation of the offer before acceptance; no contract.
- The proposal said acceptance must be confirmed by telegram: then the telegram is the required manner, and a letter might not do.
Likely follow-upsRepreguntas probables
Who was the offeror here, and why does it matter?
Did the seller have to notify the buyer of the O.K.?
Say the answer out loud before revealing each part. Rate yourself honestly; the case comes back sooner when you miss.Di la respuesta en voz alta antes de revelar cada parte. Califícate con honestidad; el caso vuelve antes si fallas.
Panic kit: “Could you repeat the question, please?” · “Let me make sure I have the facts right: …” · “I'm not certain, but I'd argue … because …”Kit de pánico: “Could you repeat the question, please?” · “Let me make sure I have the facts right: …” · “I'm not certain, but I'd argue … because …”