Vogt v. Madden – Case Brief Summary
Summary of Vogt v. Madden, 110 Idaho 6, 713 P.2d 442 (Idaho Ct. App. 1985).
Facts
Vogt (P) made an oral sharecrop agreement for 1979 to farm seventy acres of land owned by Madden (D). The parties renewed the agreement for 1980. Under the agreement, Vogt was responsible for certain expenses and other expenses were shared equally and both parties were to share profits equally.
Vogt brought this lawsuit, alleging that the parties had renewed their agreement for 1981 and that Madden had breached that agreement by leasing the property to another party. Vogt sought $2000 for expenses in connection with the agreements of 1979 and 1980, and damages for breach of the 1981 agreement.
Vogt testified that he had met with Madden several times after the 1980 harvest to discuss plans for 1981. Vogt testified that Madden had not objected when Vogt told him that he planned to farm pinto beans, and that he was left with the impression that Madden had agreed to let him farm the land. Vogt conceded that Madden had never expressly agreed to extend the agreement another year, but also noted that Madden had never told him not to proceed with his plans. Madden on the other hand claimed that he expressly rejected Vogt’s offer to remain on the land for 1981.
The jury awarded Vogt $18,540 and Madden appealed. The issue on appeal was whether the parties had renewed the agreement for 1981.
Issue
Under what circumstances can silence or inaction constitute acceptance of an offer?
Holding and Rule
Restatement (Second) of Contracts §69 – Acceptance by Silence or Exercise of Dominion
- Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:(a) Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.(b) Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.(c) Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.An offeree who does any act inconsistent with the offeror’s ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.
It is clear that the jury did not believe Madden’s testimony that he expressly rejected an agreement for 1981. The issue therefore is whether silence or inaction may constitute acceptance of an offer.
Madden objected to the instruction to the jury that silence or inaction may constitute acceptance if the party was under a duty to speak or to reject the offer. The instruction given by the trial court was slightly modified from the Restatement (Second) of Contracts Section 69. The jury was instructed that such a duty may arise between parties from a prior course of dealing, or where an offeree takes the benefit offered with reasonable opportunity to reject it and has reason to believe the offeror thought the offer was accepted. The duty will also arise when the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction.
The two exceptions stated in section 69 and in the court’s instructions are inapplicable because they were unsupported by the evidence. There was no evidence that Madden received a benefit. Vogt did not in fact farm the property in 1981 and there was no evidence to show that Vogt stated or gave Madden reason to understand that assent might be manifested by silence or inaction. The evidence does not show that Madden intended to accept Vogt’s offer by remaining silent.
The exception arising from the previous dealings between the parties also does not apply. Their prior dealings were reached by express oral agreements. There was no automatic renewal understanding in the second contract. We do not believe that the previous transactions would give rise to an expectation or a legitimate conclusion that Madden accepted Vogt’s offer in the absence of an express agreement.
Without any special duty or the special exceptions it is a general rule of law that silence or inaction or the mere failure to reject an offer does not constitute acceptance of the offer.
Disposition
Reversed and modified.
See Balfour v. Balfour for a contract law case brief in which the court held that in order to form an enforceable contract, both parties must intend that an agreement be legally binding.