Court Opinion

ID: 9788977
Source: CourtListenerOpinion
Date Created: 2023-08-31 01:23:47.935977+00
Date Added: 2024-06-11T07:37:18.176432
License: Public Domain

MATTHEWS, Chief Justice,
with whom BRYNER, Justice, joins, dissenting.
I agree with the majority opinion that there are genuine issues of material fact as to whether the April 2 resolution was an offer capable of acceptance or whether it merely authorized school district administrators to make an offer. But I believe that even if the April 2 resolution was an offer, subsequent communications to the appellees suspended any power that the appellees may have had to create a binding contract by accepting the offer.
The communications to which I refer are those mentioned in the majority opinion. These are the April 8 e-mail from School District Business Manager Loreen Kramer, the early April conversation between appel-lee Beverly Goad and Kramer, and the subsequent conversation between Goad and School Board Chairperson Linda Marchini.
The e-mail stated:
Please inform your employees that may be eligible for retirement that I am waiting for a response from our attorneys concerning the 'Longevity Bonus' offered by the school board and possibly entering into an agreement with the Retirement System for a 'Retirement Incentive Program'. It appears that there are some additional costs to the district that I was not aware of so we may have to 're-think' the process. I'll have an answer by the end of the week. Thanks.
The Goad conversations with Kramer and Marchini are described by Goad in her answer to interrogatories. She states:
Between the dates of April 3-16, 1996, I had a telephone conversation with Loreen Kramer, CRSD business manager. I had called her to get the specifics of the RIP offer that the CRSD board had made at the April 2 board meeting. During the course of this conversation she revealed to me the following:
The school district's lawyer had advised the school board to rescind the RIP incentive because they could not make an offer dependent upon something that the state legislature had not determined.
The offer was for 8.65 x 8 x wages. She also relayed that she had made errors in her calculations and that the district would not be saving as much money as she had initially told the school board at the April 2, 1996, meeting.
She then said that the school board would be meeting to rescind the April 2, 1996 RIP incentive motion.
I asked what would happen if we accepted it prior to the rescission meeting. I received the response, "You can't do that." I said that several of us had been discussing the RIP incentive and intended to accept it.
Following that conversation and after school, I went to the Copper Center Post Office where Linda Marchini, CRSD board chairperson, is employed. I then asked her about the information that I had re*289ceived from Loreen Kramer. She said Loreen said that the lawyer had advised them to rescind the motion and that the school board would be doing so at the special board meeting to be called later in the week. I asked her how she knew they would be rescinding the motion without discussion; she assured me that they would be definitely rescinding the motion. I asked her if they would be discussing the rescission at the meeting or if they intended to reconsider the motion at a later time. She replied that would remain to be seen. Then I replied that if we are interested in accepting the RIP incentive we needed to do that before the special board meeting. She said, "Please don't."
It was after these two discussions that the six of us who had previously been discussing our acceptance of the offer decided to take definitive action by writing our acceptance letters and delivering them prior to the special board meeting.
Taken individually or collectively, the communications were sufficient to convey to a reasonable person the message that the offer of April 2, at least temporarily, could not be accepted. The Kramer e-mail told the recipients that it appeared that the district had made a mistake in calculating the costs of the program and that it might have to be reconsidered. The telephone call from Goad to Kramer clearly communicated that the April 2 resolution was based on mistaken calculations, that a special meeting of the school board had been scheduled to rescind the resolution, and that the teachers could not accept the offer implicit in the resolution before the "rescission meeting." Similarly, the conversation with Board Chairperson Marchini confirmed that there would be a special board meeting at which the board would rescind the April 2 resolution.
An offeror need not formally state that an offer is withdrawn or revoked in order to terminate an offeree's power of acceptance.
Other facts besides a notice from the offer- or may make it unreasonable for the offer-ee to accept and rely. The offeree should be held to the standard of a reasonable person. Any statement by the offeror to the offeree that even implicitly states that the offeror no longer regards the offer as a commitment constitutes a revocation.[1]
The communications to which I have referred were, to use the terms of the Restatement (Second) of Contracts section 42, "manifestation{s] of an intention not to enter into the proposed contract," "receive[d] from the of-feror." As such they "terminated" the offer-ee's power of acceptance.
Important to an understanding of the meaning of the Restatement in context is Illustration 5 to section 42. Tlustration 5 states, "A makes an offer to B, and later says to B, 'Well, I don't know if we are ready. We have not decided, we might not want to go through with it' The offer is revoked."2 If anything, the communications in the present case more strongly manifest an intention not to enter into a contract than the facts stated in Illustration 5. Kramer's e-mail, like Illustration 5, indicates an unreadiness and uncertainty as to whether to go forward with the original proposal just as Illustration 5 does. Under the illustration, that alone is sufficient to revoke the offer. But in the present case there is more, for in the subsequent telephone conversation with Goad, Kramer unequivocally stated that the offer could not be accepted prior to the special meeting at which the question of rescission would be taken up. ("You can't do that.") In so stating, she made erystal clear that the power to accept the offer was terminated.
With respect to these communications, the trial court held that they did not revoke the offer encompassed in the April 2 resolution because, "[oluly the Board, acting as a body in session, had the authority to terminate its offer. Statements by administrators or *290board members could not constitute a 'manifestation of an intention not to enter into the proposed contract." I believe that this conclusion is wrong and that applicable principles of the law of agency show that Kramer, at least, did have the authority to suspend the power to accept the April 2 offer,. The principles on which I rely are expressed in sections 33, 48(1), 47, and 73 of the Restatement (Second) of Ageney.
Section 88 provides:
An agent is authorized to do, and to do only, what it is reasonable for him to infer that the principal desires him to do in the light of the principal's manifestations and the facts as he knows or should know them at the time he acts.
Section 47 provides:
Unless otherwise agreed, if after the authorization is given, an unforeseen situation arises for which the terms of the authorization make no provision and it is impracticable for the agent to communicate with the principal, he is authorized to do what he reasonably believes to be necessary in order to prevent substantial loss to the principal with respect to the interests committed to his charge.
Section 73 provides that a manager has inferred authority to direct the ordinary operations of an enterprise. Comment b in the first paragraph states that authority to manage an enterprise does not include authority to make unusual or extraordinary contracts. But in the final paragraph of this comment the inference of authority to make unusual or extraordinary contracts in emergencies is de-seribed:
In all the above cases however, authority to act may be inferred from the cireum-stances of the authorization or from subsequent events, as where, in the absence of the principal, an emergency arises which can be met only by exceeding what is ordinarily the manager's authority.[3]
And finally, section 48(1) provides that in cases where the authority of the agent is ambiguous, subsequent acquiescence by the principal indicates that the conduct was authorized:
Acquiescence by the principal in conduct of an agent whose previously conferred authorization reasonably might include it, indicates that the conduct was authorized; if clearly not included in the authorization, acquiescence in it indicates affirmance.[4]
Kramer was the school district's business manager. As such, she was authorized to do what it was reasonable for her to infer that the school district would wish her to do in light of the facts as she knew them at the time that she acted.5 When she acted in this case, she knew that the school district had relied on her calculations in passing the April 2 resolution and that these calculations were substantially mistaken and would prove to be very costly to the school district. In my view it was unquestionably reasonable for her to infer that the district would wish her to suspend the power to accept the April 2 offer and thus under section 83 of the Restatement, she had authority to do so.
Her authority is underlined by sections 47 and 73 of the Restatement which provide that an agent can take action reasonably believed by the agent to be necessary in order to prevent substantial loss to the agent's employer. That was certainly the case here.
And even if Kramer's authority under see-tions 33, 47, and 73 of the Restatement is regarded as ambiguous rather than clear, the subsequent rescission of the April 2 resolution by the board demonstrates that Kramer acted as the district desired her to act. This, to use the terms of section 48(1) of the Restatement, "indicates that [her] conduct was authorized."
In summary, the appellees knew when they purported to accept the offer on April 18 that it was based on mistaken calculations that were overly generous to them and that the school district no longer wished to go *291through with it. Since Kramer had authority under the law of agency to withdraw the offer pending the special meeting of the school board, appellees' purported acceptances did not result in the formation of contracts. For these reasons, I would reverse the judgment of the superior court and remand with directions to enter judgment in favor of the school district.

. 1 Arthur L. Corbin, Corbin on Contracts § 2.20, at 227 (rev. ed.1993).

. Restatement (Second) of Contracts § 42 emt. d, illus. 5 (1981). This illustration is based on Hoover Motor Exp. Co. v. Clements Paper Co., 193 Tenn. 6, 241 S.W.2d 851 (1951), in which the court concluded that the language "Well, I don't know if we are ready. We have not decided, we might not want to go through with it" "brought home to [the offeree] that [the offeror] no longer consented to the transaction" and so amounted to a withdrawal of the offer.

. Restatement (Second) of Agency § 73 cmt. b (1958).

. Restatement (Second) of Agency § 43(1) (1958).

. See Restatement (Second) of Agency § 33 (1958).