Opinion ID: 2055963
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Heading: An Offer or an Invitation to Make an Offer

Text: Whether an invitation for bids is an offer rather than an invitation to make an offer depends on the intention of the parties and the surrounding circumstances, but where the offer is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract. Lefkowitz v. Great Minneapolis Surplus Store, Inc., 251 Minn. 188, 191, 86 N.W.2d 689, 691 (1957). There the store advertised in the newspaper to sell 1 Black Lapin Stole   worth $139.50 for one dollar, First Come. First Served. This was an offer to sell the stole at a time and date certain for a stated price to the first person who came. It was held plaintiff, as the first person to appear, had a contract. The store's proposal was clear, definite and explicit and there was nothing to negotiate. The advertisement was held to be an offer. If Sun's invitation for bids was the mailgram Reilly sent to prospects outlining the bid procedure, plainly, as the trial court observed, it was not a clear, definite and explicit offer. The mailgram asked the bidder to describe what his bid covered, invited any clarifying statement, and was generally silent as to any specifications to which a bidder would have to conform. [4] Language in the brokerage agreement is also indicative of only an invitation to make an offer: Broker shall exercise its best efforts in obtaining bids from potential buyers ; and bids shall state the purchase price which such purchaser offers to pay. (Emphasis added.) Moreover, much of the surrounding circumstances support the view that Sun was only soliciting offers. Its agent, Reilly, for example, understood he was soliciting prospective buyers to come with an offer which we could recommend to the owner, Mr. Crawford, and he told Andersen if he received a bid of $2,600,000 he would terminate contacts with other bidders. Andersen's bid starts out, The undersigned    offers to purchase. On the other hand, Short maintains he was told by Reilly that the business was to be sold to the highest cash bidder; that there was a deadline of November 29; that Crawford and nobody else could make the decision as to who was the high bidder; and that only soft assets were to be sold. Short understood soft assets to mean the masthead, i. e., the name, subscriber and advertising lists, and contracts for legal publications, but no tangible assets. Short knew about the Goss press but understood it would have to be purchased separately from the Star and Tribune and, in any event, he was exploring other means of printing. Coupled with this is Crawford's letter to Short of November 10, confirming no hard assets were included in the sale and the newspaper would be sold to the highest bidder, with Crawford having the responsibility of making that selection. [5] Because Short was uneasy that his bid would not receive full consideration, he insisted, and Reilly agreed, that bidding would be by sealed bids submitted by a specified time and with a public opening. Short claims Reilly also told him, In an ordinary newspaper sale of this type, what we do, we get these things in here, and then we can sit down and negotiate. But we are precluded from doing this   . No way could there be any negotiation after the bids are opened   . If you are the high bidder, you are going to get that newspaper. This jibed with the language of the settlement agreement, Crawford shall cause Sun to accept    the highest bid, and the language of the brokerage agreement which Short checked before he bid, [T]he purchaser of the Newspaper Business shall be the potential purchaser which has offered the highest offering price for said business. It was never stated in the written agreements or otherwise that the seller reserved the right to reject any bids. Defendants cite Anderson v. Wisconsin Central Railway, 107 Minn. 296, 120 N.W. 39 (1909), where it was held that an announcement to sell at public auction to the highest bidder is only an invitation for bids and a bid is an offer. The Uniform Commercial Code, however, has changed this rule to provide that a request for bids at auction is presumed a solicitation for offers unless it is stated to be without reserve. Minn.Stat. § 336.2-328(3) (1978). The phrase without reserve is not a formal requirement, just customary at auctions, and equivalent language will have the same effect. An announcement that goods will be sold to the highest bidder is said to be the equivalent. Restatement of Contracts, § 27, illustration 3 (1932); H. Hoshour, Bids as Acceptances in Auctions Without Reserve, 15 Minn.L.Rev. 375, 389 (1931). See also Jenkins Towel Service, Inc. v. Fidelity-Philadelphia Trust Co., 400 Pa. 98, 161 A.2d 334 (1960). Thus Williston says: Except in the case of municipal or public corporations under such disabilities as just suggested, there seems no reason to suppose that it is not possible for one seeking tenders to make a statement that he will accept the highest tender in such positive terms that the statement will amount to an offer and ripen into a contract with the person thereafter making the highest tender. 1 Williston, Contracts § 31 (3d ed. 1957). Appearance of the word bid in the parties' communications does not dictate their legal effect. The appropriate inquiry is whether Crawford's and Reilly's oral and written representations to Short that the highest bid would be accepted were couched in language so positive and contained material terms so definite that, in light of surrounding circumstances, the statements amounted to a binding offer. In the present posture of this case, where the court is not trying issues of fact but only determining if issues of fact exist, Corwine v. Crow Wing County, 309 Minn. 345, 244 N.W.2d 482 (1976), it appears to us that whether the solicitation for Short's bid was an offer or only an invitation to make an offer is a question of fact that cannot be decided summarily. We still, however, must decide the validity of the form of Short's bid, since if it is void, the issue of whether an offer was made is moot.