Cole-McIntyre-Norfleet Co. v. Holloway
214 S.W. 817 (Tenn. 1919)
Lansden, C. J.
This case presents a question of law, which, so far as we are advised, has not been decided by this court in its exact phases. March 26, 1917, a traveling salesman of plaintiff in error solicited and received from defendant in error, at his country store in Shelby county, Tenn., an order for certain goods, which he was authorized to sell. Among these goods were 50 barrels of meal. The meal was to be ordered out by defendant by the 3lst day of July, and afterwards 5 cents per barrel per month was to be charged him for storage.
After the order was given, the defendant heard nothing from it until the 26th of May, 1917, when he was in the place of business of plaintiff in error, and told it to begin shipment of the meal on his contract. He was informed by plaintiff in error that he did not accept the order of March 26th, and for that reason the defendant had no contract for meal.
The defendant in error never received confirmation or rejection from plaintiff in error, or other refusal to fill the order. The same traveling salesman of plaintiff in error called on defendant as often as once each week, and this order was not mentioned to defendant, either by him or by his principals, in any way. Between the day of its alleged rejection, prices on all of the articles in the contract greatly advanced. All of the goods advanced about 50 percent in value.
Some jobbers at Memphis received orders from their drummers, and filled the orders or notified the purchaser that the orders were rejected; but this method was not followed by plaintiff in error.
The contract provided that it was not binding until accepted by the seller at its office in Memphis, and that the salesman had no authority to sign the contract for either the seller or buyer. It was further stipulated that the order should not be subject to countermand.
It will be observed that plaintiff in error was silent upon both the acceptance and rejection of the contract. It sent forth its salesman to solicit this and other orders. The defendant in error did not have the right to countermand orders and the contract was closed, if and when it was accepted by plaintiff in error. The proof that some jobbers in Memphis uniformly filled such order unless the purchaser was notified to the contrary is of no value because it does not amount to a custom.
The case, therefore, must be decided upon its facts. The circuit court and the court of civil appeals were both of opinion that the contract was completed because of the lapse of time before plaintiff in error rejected it. The time intervening between the giving of the order by defendant and its alleged repudiation by plaintiff in error was about 60 days. Weekly opportunities were afforded the salesman of plaintiff in error to notify the defendant in error of the rejection of the contract, and, of course, daily occasions were afforded plaintiff in error to notify him by mail or wire. The defendant believed the contract was in force on the 26th of May, because he directed plaintiff in error to begin shipment of the meal on that day. Such shipments were to have been completed by July 31st, or defendant to pay storage charges. From this evidence the Circuit Court found as an inference of fact that plaintiff in error had not acted within a reasonable time, and therefore its silence would be construed as an acceptance of the contract. The question of whether the delay of plaintiff in error was reasonable or unreasonable was one of fact, and the circuit court was justified from the evidence in finding that the delay was unreasonable. Hence the case, as it comes to us, is whether delay upon the part of plaintiff in error for an unreasonable time in notifying the defendant in error of its action upon the contract is an acceptance of its terms.
We think such delay was unreasonable, and effected an acceptance of the contract. It should not be forgotten that this is not the case of an agent exceeding his authority, or acting without authority. Even in such cases the principal must accept or reject the benefits of the contract promptly and within a reasonable time. Williams v. Storm, 6 Cold. 207.
Plaintiff’s agent in this case was authorized to do precisely that which he could do, both as to time and substance. The only thing which was left open by the contract was the acceptance or rejection of its terms by plaintiff in error. It will not do to say that a seller of goods like these could wait indefinitely to decide whether or not he will accept the offer of the proposed buyer. This was all done in the usual course of business, and the articles embraced within the contract were consumable in the use, and some of them would become unfitted for the market within a short time.
It is undoubtedly true that an offer to buy or sell is not binding until its acceptance is communicated to the other party. The acceptance, however, of such an offer, may be communicated by the other party either by a formal acceptance, or acts amounting to an acceptance. Delay in communicating action as to the acceptance may amount to an acceptance itself.
Question
An acceptance is a manifestation of a willingness to enter the bargain proposed by the offer in a way invited or required by the offer. The court’s position must be that by remaining silent, the seller/offeree manifested its willingness to enter the bargain proposed by the buyer’s offer in a way invited or required by the offer.
(a) True
Correct. The court’s view is that, in the circumstances, the silence of the seller/offeree is meaningful; it indicates that the seller is willing to supply the 50 barrels of meal. The acceptance by silence was evidently invited by the offeror in the sense that, in the circumstances, the offeror reasonably assumed that placing the order with the salesman ensured delivery of the meal unless the offeror heard to the contrary in a reasonable amount of time.
(b) False
Incorrect. The court’s view is that, in the circumstances, the silence of the seller/offeree is meaningful; it indicates that the seller is willing to supply the 50 barrels of meal. The acceptance by silence was evidently invited by the offeror in the sense that, in the circumstances, the offeror reasonably assumed that placing the order with the salesman ensured delivery of the meal unless the offeror heard to the contrary in a reasonable amount of time.
When the subject of a contract, either in its nature or by virtue of conditions of the market, will become unmarketable by delay, delay in notifying the other party of his decision will amount to an acceptance by the offeror. Otherwise, the offeror could place his goods upon the market, and solicit orders, and yet hold the other party to the contract, while he reserves time to himself to see if the contract will be profitable.
Writ denied.