FORMATION OF CONTRACTS: THE CONTRACT ITSELF 1. Offer and acceptance.—It is essential to a con tract that the parties thereto shall have come to some agreement. By this is meant that the parties are of one mind upon some proposed transaction, and that they have declared this fact. The purpose of both must be declared; the law cannot deal with the secret thoughts of men.
Hence if A is willing to sell his horse for $500 to B, and B has made up his mind to buy the horse, if he can get it, but neither has referred to or discussed the mat e, ter, A and B are really of one mind on the subject. But there is no contract, for their wills have not met in a declaration of willingness to buy and sell.
So it is the declared will and not the secret inten- . tions of the parties that the law will examine. If A offers to buy B's horse for $500 and B accepts, A may have no intention of paying the money, but there is a valid contract. B takes his chance of being paid if he has not received cash or security. And A cannot be encouraged and assisted in getting out of his con tract when he declares that he did not mean what he said.
The agreement of the parties is reached by means of an offer and an acceptance. Neither need be in express or formal terms. Some promise or act or some course of conduct may be quite enough. If A advertises that he will pay a reward of $5 for the return of his lost watch, he makes an offer of a prom ise for an act, and the finder upon presenting the watch and claiming the reward accepts the offer and is entitled to the reward. So a cabman at his stand must be ready to convey people about town. He of fers an act for a promise to pay the amount which, by tariff, he can charge.
If a piano firm offers a man a piano for $300, and the latter says he will give $250, there is no contract, because the minds of the two have not met. But if the piano firm at once says it will accept the $250, there is a contract. The acceptance of the offer clinches the bargain. Hence the acceptance and the offer must agree—the one must conform to the other. If the ac ceptance adds terms or conditions not contemplated in the offer, the so-called acceptance is rather a rejec tion of the offer. If A offered to buy a house from B on certain terms, possession to be had on July 25, B agreed to the terms, but fixed the date of posses sion as August 1, it would be held there was no acceptance. If A writes to B that he will pay him
$5,000 for his house, but B must accept by return mail, and B after waiting a week writes accepting, A is not bound to buy.
There is this to be said also that the offer must have in view the immediate formation of a contract by an acceptance. For instance, a call for tenders for the building of a bridge or a warehouse is merely an invita tion to builders or contractors to send in proposals which the person who intends to build may consider. Such an invitation is an offer to treat rather than a simple offer which may be at once accepted. The person offering to treat is not bound to accept the lowest or any tender. A rather interesting and diffi cult case was decided in England in One Harvey telegraphed to the defendant, Facey, "Will you sell us Bumper Hall? Telegraph lowest price." Facey telegraphed: "Lowest price £900." Harvey replied: "We agree to buy Bumper Hall for £900." Facey did not answer this telegram, and refused to sell. He was sued, and it was held that tho Facey had quoted a price, he had not said he would sell. There was really no contract, because Harvey's "We agree to buy Bumper Hall for £900" was really the offer, and Facey did not acknowledge it.
2. Offer and acceptance by mail or offer sent by mail or telegraph is not complete until it reaches the offeree., According to the English law it may be revoked at any time before it is accepted. Thus if A writes B offering to sell his house, A can withdraw his offer by telegram or by another letter which will arrive before the first. If when the revoca tion arrives the offeree has not made up his mind, the offer stands revoked. But if the revocation is merely on the way to the offeree, his acceptance of the offer is none the less good. Until the revocation comes to the mind of the offeree, he is entitled to accept the offer and to treat it as expressing the mind of the offerer. While the French commentators do not as a rule accept this view, the French courts will allow damages where the revocation of an offer causes loss. In Quebec the English rule would probably be fol lowed, the balance of convenience in all commercial transactions, apart from the strict theory of the law, being distinctly in favor of its application.