Opinion ID: 6103947
Heading Depth: 3
Heading Rank: 2

Heading: Doctrinal Applicability

Text: The implied-revocation doctrine dates at least as far back as the classic English contracts case of Dickinson v. Dodds, 47 which recognized that an offer need not be expressly withdrawn or retracted to terminate the power of acceptance. 48 There, an offer to sell improved real property was outstanding with a stated expiration date that had not yet come to pass when the putative buyer learned from his agent that the putative seller had offered or agreed to sell the property to someone else. 49 How the agent had acquired this information was not disclosed, 50 but on learning about this development, the buyer promptly hand-delivered his written acceptance to the seller’s abode and attempted to serve him with a duplicate as he entered a railway carriage. 51 Through these actions, the buyer endeavored to communicate his acceptance before the offer’s stated expiration date. 52 When approached, the seller declined to take 47 2 Ch. Div. 463 (1876). 48 Id. at 472. 49 Id. at 464. 50 Id. at 474 (“Then [the buyer] is informed by [his agent] that the property has been sold by [the seller to a third party]. [The agent] does not tell us from whom he heard it, but he says that he did hear it, that he knew it, and that he informed [the buyer] of it.”). 51 Id. at 464. 52 Id. 19 the written acceptance, declaring: “You are too late. I have sold the property.” 53 In adjudging the offer terminated before acceptance, Lord Justice James of the Court of Appeal in Chancery observed, “[T]here is neither principle nor authority for the proposition that there must be an express and actual withdrawal of the offer, or what is called a retractation.” 54 And while “one man is bound in some way or other to let the other man know that his mind with regard to the offer has been changed, . . . in this case, beyond all question, the [buyer] knew that [the seller] was no longer minded to sell the property to him as plainly and clearly as if [the seller] had told him in so many words, ‘I withdraw the offer.’” 55 The buyer, “knowing all the while that [the seller] had entirely changed his mind,” no longer had the power to accept the offer and no binding contract had come into being. 56 The Restatement recognizes Dickinson as a case involving indirect communication of revocation under Section 43. 57 Williston on Contracts describes Dickinson as “[t]he leading case” on indirect communication of revocation and notes that it “has generally been followed in the United States.” 58 Although Dickinson involved an offer to sell real property, the opinion does not suggest that the rule of implied revocation is limited to 53 Id. 54 Id. at 472. 55 Id. 56 Id. at 473. 57 RESTATEMENT (SECOND) OF CONTRACTS § 43, Reporter’s Note cmt. b. 58 1 WILLISTON, supra note 24, § 5:10. 20 that context. Rather, the analysis was rooted in the necessity of a meeting of the minds to form a binding contract. 59 To illustrate the point, Lord Justice Mellish, in announcing his agreement with the judgment, provided an example involving an offer to sell a particular horse where the offeror had, the next day, sold the horse to someone else. 60 Lord Justice Mellish found it “simply absurd” that if the offeree knows that the offeror “has sold the property to someone else, and that, in fact, he has not remained in the same mind to sell it to him, [that] he can be at liberty to accept the offer and thereby make a binding contract[.]” 61 Dickinson imposes no express constraint on the implied-revocation doctrine’s application to real-estate transactions, and one cannot reasonably be inferred. The same is true for Antwine. There, a bank had listed a parcel of land for sale with a real-estate broker. 62 The putative buyer, Reed, had authorized the bank’s broker to make an offer to purchase the land on his behalf. 63 The bank, in turn, made Reed a written, signed counteroffer, which conditioned acceptance on an earnest-money deposit. 64 Before Reed had accepted the counteroffer by depositing the earnest money (an express condition of acceptance), the bank instructed 59 Dickinson, 2 Ch. Div. at 473-75. 60 Id. at 474-75. 61 Id. at 474. 62 Antwine, 199 S.W.2d at 483-84. 63 Id. at 484. 64 Id. 21 the broker to take the property off the market. 65 After learning about the bank’s instruction from the broker, Reed attempted to accept the counteroffer by depositing the earnest money. 66 After articulating the principle that “‘[f]ormal notice [of revocation] . . . is not always necessary, it being sufficient that the person making the offer does some act inconsistent with it,’” 67 we held that Reed’s power of acceptance terminated when the broker told him that the bank had directed him to take the property off the market: According to the evidence the broker communicated with Reed concerning the transaction on or about the 27th or 28th of December, 1944, and advised Reed that the bank had directed him to take the land off the market. .... Thus it appears from the evidence offered by Reed that the proposal of the bank was never accepted in all of its terms by Reed until after Reed was advised of the bank’s instructions to the broker to take the land off the market. Under the evidence stated and the authorities cited we hold that Reed had received notice of the bank’s revocation of the proposed written contract before he had accepted it in all of its terms. Accordingly, there was no contract to sell the land between the parties. 68 Like Dickinson, Antwine is a real-estate case. And also like Dickinson, it erects no barrier to the implied-revocation doctrine’s 65 Id. at 486. 66 Id. 67 Id. at 485 (emphasis added) (quoting 17 C.J.S. Contracts § 50d). 68 Id. at 485-86 (recitation of the broker’s trial testimony omitted). 22 application to contracts generally. Not by word or by analytical underpinning. In fact, it seems that no jurisdiction has limited the doctrine to offers involving the sale of land, and to the contrary, many have applied it outside of that context. 69 For its part, the Restatement 69 See USHealth Grp., Inc. v. South, 636 F. App’x 194, 202-03 (5th Cir. 2015) (holding that no agreement to arbitrate was formed where the purported offeree “did not accept the offer” before the purported offeror impliedly “revoked any offer that could have existed” by filing suit (citing Antwine, 199 S.W.2d at 485)); Varney Ent. Grp., Inc. v. Avon Plastics, Inc., 275 Cal. Rptr. 3d 394, 403 (Ct. App. 2021) (holding that a settlement offer was impliedly revoked by the offeror’s inconsistent offer to enter into a stipulated judgment (citing RESTATEMENT (SECOND) OF CONTRACTS § 43)); Lasco v. Town of Winfield, 204 CV-467-PPS, 2007 WL 2349685, at  (N.D. Ind. Aug. 14, 2007) (holding that parties impliedly revoked their settlement offer prior to acceptance; although they never used words such as “withdrawn, revoked, or rescinded,” “the[] facts clearly demonstrate[d] that . . . Plaintiffs manifested their unwillingness to enter into the[] proposed settlement agreement”); see also Trs. of Teamsters Union Local No. 142 Pension Tr. Fund v. McAllister, Inc., 602 F. Supp. 2d 948, 955 (N.D. Ind. 2009) (noting, in analyzing whether the parties had a valid settlement agreement, that “[a]ny act or communication that would cause a reasonable person to believe that an offer has been withdrawn or revoked is sufficient to constitute a withdrawal or revocation of the offer (no specific words or magic words are necessary)” (citing 1 WILLISTON, supra note 24, § 5:8)); Gabriel v. Alaska Elec. Pension Fund, 3:06-CV-00192-TMB, 2008 WL 11284863, at  (D. Alaska Sept. 30, 2008), aff’d, 773 F.3d 945 (9th Cir. 2014) (citing RESTATEMENT (SECOND) OF CONTRACTS § 43 and holding offer to reinstate pension benefits was impliedly revoked by subsequent letter indicating offeror’s determination that offeree was never entitled to benefits); Abrams-Rodkey v. Summit Cnty. Child. Serv., 836 N.E.2d 1, 7 (Ohio Ct. App. 2005) (“A subsequent, inconsistent offer revokes an earlier offer. Thus, even if we find that the statement was intended to apply to all offers between SCCS and the union, a later, inconsistent offer—in this case, the offer to continue working—revokes the earlier offer.” (citations omitted)); Palmer v. Schindler Elevator Corp., 133 Cal. Rptr. 2d 339, 342 (Ct. App. 2003) (holding initial settlement offer was revoked by subsequent offer); Wilson v. Sand Mountain Funeral Home, Inc., 739 So. 2d 1123, 1125 (Ala. Civ. App. 1999) (holding that an offer to buy stock was impliedly revoked by the offeror’s service of a lawsuit on the offeree); Norca Corp. v. Tokheim Corp., 227 A.D.2d 458, 458-59 (N.Y. App. Div. 1996) (holding that a subsequent offer to sell fuel pumps for a 23 acknowledges that the rule recognizing an indirect communication of an implied revocation “has been applied most frequently to offers for the sale of an interest in land,” while simultaneously observing that the rule’s animating principles are “equally applicable [but not limited] to offers to sell other specific property[.]” 70 We decline Tauch’s invitation to limit the implied-revocation doctrine’s application to certain transactions because no principle or authority supports doing so. 71 To the contrary, the necessity of a meeting of the minds is integral to the formation of any binding contract. 72 different price impliedly revoked a prior offer); Petterson v. Pattberg, 161 N.E. 428, 429-30 (N.Y. 1928) (holding that an offer to settle existing mortgage at a discount with a lump-sum payment was revoked when the mortgagee sold the note to a third party and informed the principal about that transaction (citing Dickinson v. Dodds, 2 Ch. Div. 463 (1876))). 70 RESTATEMENT (SECOND) OF CONTRACTS § 43 cmt. b; see 1 WILLISTON, supra note 24, § 5:10 (“The reported cases invariably involve land, though neither Restatement [First or Second] limits the application of the rule to offers to sell land.”); RESTATEMENT (FIRST) OF CONTRACTS § 42 (AM. LAW INST. 1931) (“Where an offer is for the sale of an interest in land or in other things, if the offeror, after making the offer, sells or contracts to sell the interest to another person, and the offeree acquires reliable information of that fact, before he has exercised his power of creating a contract by acceptance of the offer, the offer is revoked.” (emphasis added)). 71 Tauch’s only authority for a contrary proposition, Winrow v. Discovery Ins. Co., No. COA06-1681, 2008 WL 565678, at  (N.C. Ct. App. 2008), cannot be read as proscriptively as he suggests. In that case, the court noted the absence of any North Carolina authority applying Dickinson’s rule outside the real-estate context and “decline[d] to extend” the rule “on the[] facts” of that particular case where the court had already determined that, as a threshold matter, there “was not a sufficiently definite action to revoke the [settlement] offer.” Id. See David J. Sacks, PC v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (“A 72 meeting of the minds is necessary to form a binding contract.”). 24 That being the case, we turn now to the two essential components for a valid implied revocation: (1) inconsistent action and (2) communication. Both are in dispute here. The court of appeals disposed of the case on the ground that the Bank’s conduct in executing the assignment agreement did not imply a revocation, so the court did not consider whether the method by which Tauch learned about it was sufficient to terminate the power of acceptance.