Counteroffers Case: Minneapolis & St. Louis Rail Co. v. Columbus Rolling Mill Co., 119 U.S. 149 (US, 1886) pg.

325 Parties: Plaintiff - Minneapolis (RR co) Defendant - Columbus (Rolling mill co)

Procedural History: Plaintiff sues for breach of contract, alleging a contract was formed, but def denies a contract was formed. Trial court returns verdict for defendant, plaintiff appeals. Facts: · 12/5: Railway company (Plaintiff) sends mill company (Def) letter requesting iron/steel rails. · 12/8: Def responds with letter clarifying that it only makes iron rails. It offers to supply 2K-5K tons of iron rails at $54 per ton. Requests notification by 12/20. · 12/16: P “accepts” and orders 1,200 tons at $54. · 12/18: D rejects. · 12/19: P tries to go back to old offer, agrees to 2K at $54. Reiterates at 12/22. Plaintiff sues for breach of contract, alleging a contract was formed, but def denies a contract was formed. Trial court returns verdict for defendant, plaintiff appeals. Issue: Does the original offer remain valid after a counteroffer is communicated? No. Holding: Judgment affirmed for defendant.

Reasoning: A counteroffer, which is a proposal to accept the offer made with different terms, constitutes a rejection of the original offer and subject to acceptance by the original offeror. The original offeree, after rejecting the offer with a counteroffer, cannot afterward accept the offer once its been rejected (cannot be revived). Also, there was a time limit to the original offer, and the acceptance was received after the date specified. If no time limit is mentioned in the offer, then a reasonable time period will be assumed. RULE: Mirror-Image rule- acceptances must be the mirror image of offers; if not, they are considered counteroffers and destroy the offer. Note: This rule is rarely used now. Restatement (Second) § 59 states that an offer is not invalidated if the acceptance merely requests a change in terms. Restatement § 29 - An offeree's power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree. Notes UCC (not in effect during this case) - abolishes the mirror image rule in the common law, as it pertain to the sale of goods. What is the issue here? Sale of goods - iron rails for RR tracks - these are goods. The issue is the qty of tons of goods Supreme Court decided negotiations were closed once the def rejected plaintiff's counteroffer. Counteroffer kills the offer here. UCC 2-207 -