Story Case

Harry Mills wrote to Frank Jones and offered some posts for sale at the market price. As soon as Jones received the offer, he wrote a letter of acceptance. This letter was lost in transmission and Mills, thinking that Jones did not want the posts, sold them elsewhere. After waiting for three weeks for the shipment of posts, Jones learned of the sale and immediately sued Mills for breach of contract. Mills defended on the ground that he never received the acceptance and that he was, therefore, not bound. Should Jones or Mills win the suit?

Ruling Court Case. Trevor Vs. Wood, Volume 3 New York Reports, Page 307; Volume 93 American Decisions, Page 511

On January 30, Trevor of New York telegraphed to John "Wood of New Orleans, asking his price for one hundred thousand Mexican dollars. The following day, January 31, Wood replied by telegram, offering to deliver fifty thousand Mexican dollars at seven and one-quarter. On the same day, Trevor sent the following telegram:

"To John Wood:

Your offer of fifty thousand Mexican dollars accepted.

Trevor".

This telegram did not reach Wood until February the 4th; in the meantime, on February 3, Wood sent the following message by telegraph:

"No answer to our dispatch. The dollars are sold.

John Wood".

When Trevor learned that Wood had sold the dollars and refused to get any more, he brought suit for damages for his failure to comply with the terms of their contract.

Wood contended, that he had revoked his offer before he had received an acceptance, and that, therefore, no contract was ever made between them.

Decision

It is the general rule that when an offer is made by letter, it may be accepted in the same manner ; and the posting of the letter of acceptance is regarded as an immediate acceptance; and it is not material that it never reaches the other party. The same is true in regard to an offer and acceptance by telegraph. So here Trevor sent his telegram before he had any notice of a revocation. As soon as he did so the contract was complete, and no subsequent act by the other party could deprive him of his right thereunder.

Therefore, judgment was given for Trevor in this action.

Ruling Law. Story Case Answer

These instances of acceptance by letter or telegram are also illustrations of an acceptance by an appropriate act. When the person writes a letter, making an offer, he impliedly authorizes the person to whom the offer is made to accept in the same manner. If, therefore, the offeree accepts by letter, the contract is complete the moment that he posts his letter, and the creation of the contract does not depend upon the actual receipt of the letter by the person who made the offer. It is evident that the offeror cannot revoke the offer after the letter of acceptance is posted, even though he has not yet received it. The attempted revocation in the Court Case of Trevor vs. Wood, was held ineffective. In the Story Case, there was a contract, notwithstanding the fact that the letter of acceptance never reached Mills. Therefore, judgment should be given for Jones.