Opinion ID: 1382275
Heading Depth: 1
Heading Rank: 5

Heading: Defendants' letter of June 19, 1976, was an offer to sell the ranch lands.

Text: Defendants first contend that defendants' letter of June 17, 1976, to plaintiff was not an offer, both as a matter of law and under the facts of this case. In support of that contention defendants say that their testimony that the letter was not intended as an offer was uncontradicted and that similar writings have been held not to constitute offers. [1] Defendants also say that there is authority for the proposition that all the evidence of surrounding circumstances may be taken into consideration in making that determination [2] and that the circumstances in this case were such as to require the conclusion that defendants did not intend the letter as an offer and that plaintiff knew or reasonably should have known that it was not intended as an offer because: 1. Defendants obviously did not intend it as an offer. 2. The wording of the `offer' made it clear that this was `information' that plaintiff had previously expressed an interest in receiving. 3. It did not use the term offer, but only formally advised plaintiff that defendants are selling certain lands and permits and set forth generally the terms upon which they would consider selling. 4. The plaintiff knew of the custom of transferring permits with land and had no knowledge from the writing or previous talk that defendants were selling any cattle. 5. Plaintiff knew and expected this same information to go to others. Defendants conclude that Considering the factors determined important by the authorities cited, these factors preponderate heavily that this was not an offer to sell the land only, or to sell at all, and should not reasonably have been so construed by the plaintiff. In Kitzke v. Turnidge, 209 Or. 563, 573, 307 P.2d 522, 527 (1957), this court quoted with approval the following rule as stated in 1 Williston on Contracts 49-50, § 22A (1957): `   In the early law of assumpsit stress was laid on the necessity of a promise in terms, but the modern law rightly construes both acts and words as having the meaning which a reasonable person present would put upon them in view of the surrounding circumstances. Even where words are used, a contract includes not only what the parties said, but also what is necessarily to be implied from what they said. And it may be said broadly that any conduct of one party, from which the other may reasonably draw the inference of a promise, is effective in law as such.' To the same effect, see Kabil Developments Corp. v. Mignot, 279 Or. 151, 158, 566 P.2d 505 (1977); Klimek v. Perisich, 231 Or. 71, 78, 371 P.2d 956 (1962); Restatement of Contracts 2d § 24 (1973); and Murray on Contracts 36, § 22 (1974). See also Harty v. Bye, 258 Or. 398, 404, 483 P.2d 458 (1971). As also stated in 1 Restatement of Contracts § 25, Comment ( a ) (1932) as quoted by this court with approval in Metropolitan Life Ins. Co. v. Kimball, 163 Or. 31, 58, 94 P.2d 1101, 1111 (1939): It is often difficult to draw an exact line between offers and negotiations preliminary thereto. It is common for one who wishes to make a bargain to try to induce the other party to the intended transaction to make the definite offer, he himself suggesting with more or less definiteness the nature of the contract he is willing to enter into. Besides any direct language indicating an intent to defer the formation of a contract, the definiteness or indefiniteness of the words used in opening the negotiation must be considered, as well as the usages of business, and indeed all accompanying circumstances. The difficulty in determining whether an offer has been made is particularly acute in cases involving price quotations, as in this case. It is recognized that although a price quotation, standing alone, is not an offer, [3] there may be circumstances under which a price quotation, when considered together with facts and circumstances, may constitute an offer which, if accepted, will result in a binding contract. [4] It is also recognized that such an offer may be made to more than one person. [5] Thus, the fact that a price quotation is sent to more than one person does not, of itself, require a holding that such a price quotation is not an offer. We agree with the analysis of this problem as stated in Murray on Contracts 37-40, § 24 (1977), as follows: If A says to B, `I am going to sell my car for $500,' and B replies, `All right, here is $500, I will take it,' no contract results, assuming that A's statement is taken at its face value. A's statement does not involve any promise, commitment or undertaking; it is at most a statement of A's present intention.            However, a price quotation or advertisement may contain sufficient indication of willingness to enter a bargain so that the party to whom it is addressed would be justified in believing that his assent would conclude the bargain.            The basic problem is found in the expressions of the parties. People very seldom express themselves either accurately or in complete detail. Thus, difficulty is encountered in determining the correct interpretation of the expression in question. Over the years, some more or less trustworthy guides to interpretation have been developed. The first and strongest guide is that the particular expression is to be judged on the basis of what a reasonable man in the position of the offeree has been led to believe. This requires an analysis of what the offeree should have understood under all of the surrounding circumstances, with all of his opportunities for comprehending the intention of the offeror, rather than what the offeror, in fact, intended. This guide may be regarded as simply another manifestation of the objective test. Beyond this universally accepted guide to interpretation, there are other guides which are found in the case law involving factors that tend to recur. The most important of the remaining guides is the language used. If there are no words of promise, undertaking or commitment, the tendency is to construe the expression to be an invitation for an offer or mere preliminary negotiations in the absence of strong, countervailing circumstances. Another guide which has been widely accepted is the determination of the party or parties to whom the purported offer has been addressed. If the expression definitely names a party or parties, it is more likely to be construed as an offer. If the addressee is an indefinite group, it is less likely to be an offer. The fact that this is simply a guide rather than a definite rule is illustrated by the exceptional cases which must be noted. The guide operates effectively in relation to such expressions as advertisements or circular letters. The addressee is indefinite and, therefore, the expression is probably not an offer. However, in reward cases, the addressee is equally indefinite and, yet, the expression is an offer. Finally, the definiteness of the proposal itself may have a bearing on whether it constitutes an offer. In general, the more definite the proposal, the more reasonable it is to treat the proposal as involving a commitment.    (Footnotes omitted) Upon application of these tests to the facts of this case we are of the opinion that defendants' letter to plaintiff dated June 17, 1976, was an offer to sell the ranch lands. We believe that the surrounding circumstances under which this letter was prepared by defendants and sent by them to plaintiff were such as to have led a reasonable person to believe that defendants were making an offer to sell to plaintiff the lands described in the letter's enclosure and upon the terms as there stated. That letter did not come to plaintiff out of the blue, as in some of the cases involving advertisements or price quotations. Neither was this a price quotation resulting from an inquiry by plaintiff. According to what we believe to be the most credible testimony, defendants decided to sell the lands in question and defendant Joseph Oliver then sought out the plaintiff who owned adjacent lands. Defendant Oliver told plaintiff that defendants were interested in selling that land, inquired whether plaintiff was interested, and was told by plaintiff that he was very interested in the land, after which they discussed the particular lands to be sold. That conversation was terminated with the understanding that Mr. Oliver would determine the value and price of that land, i.e., what he wanted for the land, and that plaintiff would undertake to arrange financing for the purchase of that land. In addition to that initial conversation, there was a further telephone conversation in which plaintiff called Mr. Oliver to ask him if his plans for selling    continued to be in force and was told yes; that there had been some delay in getting information from the assessor, as needed to establish the value of the land; and that plaintiff then told Mr. Oliver that everything was in order and that he had the money available and everything was ready to go. Under these facts and circumstances, we agree with the finding and conclusion by the trial court, in its written opinion, that when plaintiff received the letter of June 17th, with enclosures, which stated a price of $324,419 for the 2,933 acres in T 16 S, R 31 E., W.M., as previously identified by the parties with reference to a map, and stating terms of 29 percent down  balance over five years at eight percent interest  with a sale date of either December 1, 1976, or January 1, 1977, a reasonable person in the position of the plaintiff would have believed that defendants were making an offer to sell those lands to him. This conclusion is further strengthened by the definiteness of the proposal, not only with respect to price, but terms, and by the fact that the addressee was not an indefinite group. See Murray, supra at 40. As previously noted, defendants contend that they obviously did not intend [the letter] as an offer. While it may be proper to consider evidence of defendants' subjective intent under the objective test to which this court is committed, it is the manifestation of a previous intention that is controlling, rather than a person's actual intent. [6] We do not agree with defendants' contention that it was obvious to a reasonable person, under the facts and circumstances of this case that the letter of January 17th was not intended to be an offer to sell the ranch lands to plaintiff. We recognize, as contended by defendants, that the failure to use the word offer, the fact that the letter included the information previously discussed between the parties, and the fact that plaintiff knew that the same information was to be sent to others, were important facts to be considered in deciding whether plaintiff, as a reasonable person, would have been led to believe that this letter was an offer. See also Murray, supra, at 40. We disagree, however, with defendants' contention that these and other factors relied upon by defendants preponderate so as to require a holding that the letter of January 17th was not an offer. The failure to add the word offer and the use of the word information are also not controlling, and, as previously noted, an offer may be made to more than one person. The question is whether, under all of the facts and circumstances existing at the time that this letter was received, a reasonable person in the position of the plaintiff would have understood the letter to be an offer by defendants to sell the land to him. Defendants also contend that plaintiff knew of the custom of transferring [Forest Service grazing] permits with the land and had no knowledge from the writing or previous talk that defendants were selling any cattle (so as to provide such a basis for a transfer of the permits). [7] Plaintiff testified, however, that at the time of the initial conversation, Mr. Oliver told plaintiff that he thought plaintiff would be interested in the land and that Clyde would be interested in the permits. In addition, defendant Joseph Oliver, in response to questions by the trial judge, although denying that at that time he told plaintiff that he was going to offer the permits to Mr. Holliday, admitted that he knew Mr. Holliday was interested in the permits and could have told plaintiff that he was going to talk to Mr. Holliday about him purchasing the permits. On this record we believe that plaintiff's knowledge of the facts noted by defendants relating to the transfer of such permits did not require a holding that, as a reasonable man, he did not understand or should not have understood that defendants' letter of June 17th was an offer to sell the ranch lands to him.