Southern Cotton Oil Co. v. Frauenthal

224 S.W. 730, 145 Ark. 394, 1920 Ark. LEXIS 424

• Court: Supreme Court of Arkansas
• Decided: October 18, 1920
• Status: Published

Opinion

Hart, J.

(after stating the facts). Counsel for the plaintiff seeks to reverse the judgment on the ground that the two telegrams constituted a binding contract of sale of the cotton seed, and that Frauenthal refused to ■ carry out the contract on his part to the damage of the' plaintiff in the sum of $300.

It is true, as contended by counsel for the plaintiff, that a binding contract of sale may be entered into by letters and telegrams, and that an acceptance by letter or telegram of an unconditional offer made in the same manner will constitute an obligatory contract. Allen v. Nothern, 121 Ark. 150, and cases cited, and J. I. Case Threshing Machine Co. v. Southwestern Veneer Co., 135 Ark. 607. It is equally well settled that before the contract is consummated each party must agree to the same proposition, and the agreement must be mutual to every essential term of the contract. The telegram signed by Frauenthal is as follows: “I confirm sale of 100 tons cotton seed immediate shipment at 37 f. o. b., Conway.”

The plaintiff immediately telegraphed its acceptance in which it stated that it was sending written instructions in regard to the shipment. In the written instructions Frauenthal was only authorized to draw for 90 per cent, of the value of the car with bill of lading attached to his draft.

On the same day the company also wrote to Frauenthal the following letter

“Dear Sir: We beg to confirm telephone conversation with you today which resulted in our buying from you........................cars (approximately 100 tons) of PBIME COTTON SEED at $37 per ton, loaded on board cars at Conway. Shipment prompt weights and quality guaranteed at destination.

“If this is not your understanding of the terms of the trade, notify us by return mail, otherwise trade will be binding as written above.

“Please sign and return to us promptly one copy of this confirmation.”

This letter requires that the weights and quality of the cotton seed should be guaranteed at destination. The shipping instructions sent on the same day only authorized Frauenthal to draw 90 per cent, of the invoice price at the time the seed were loaded into the cars at Conway. The telegram of the oil company refers to this letter and the shipping instructions as a part of its acceptance of the offer made by Frauenthal in his telegram. Hence they constituted a part of the negotiations, and it cannot be said that Frauenthal’s telegram and the oil company’s telegram in answer thereto constituted a binding contract between the parties. The Oil Company recognized that the contract was not complete by adding these new terms and then writing, to Frauenthal that if this was not his understanding of the terms of the trade to notify it by return mail. It is manifest that the limitation of the right of Franenthal to draw for only 90 per cent, of the invoice price of the cotton seed, and requiring him to guarantee the weights and quality at destination were new terms essentially different from those contained in Frauenthal’s telegram. The telegram of the company refers to a confirmatory letter and also to one containing shipping instructions.

As above stated, the new terms as indicated in these letters prevented the telegram of the Oil Company from being an unconditional acceptance of Frauenthal’s telegram. Frauenthal immediately rejected the proposal contained in these letter's as soon as he received them. Hence there was no meeting of the minds of the parties on the same terms, and therefore no 'binding contract.

It follows that the court was warranted in finding for the defendant, and the judgment will be affirmed.