Trifiro v. New York Life Ins. Co.
| Decision Date | 03 February 1988 |
| Docket Number | No. 87-1815,87-1815 |
| Citation | 845 F.2d 30 |
| Parties | Richard J. TRIFIRO, Plaintiff, Appellant, v. NEW YORK LIFE INSURANCE CO., Defendant, Appellee. . Heard |
| Court | U.S. Court of Appeals — First Circuit |
James F. Freeley, Jr., Boston, Mass., for plaintiff, appellant.
Joseph F. Ryan with whom Lyne, Woodworth & Evarts, Boston, Mass., was on brief, for defendant, appellee.
Before BREYER, Circuit Judge, ALDRICH, Senior Circuit Judge, and PETTINE, * Senior District Judge.
The present appeal from a judgment of the United States District Court for the District of Massachusetts sounds in contract and tort. In the court below, appellant brought claims for breach of contract, deceit, negligent misrepresentation, a violation of Mass.G.L. c. 93A and promissory estoppel. Appellee won a summary judgment on all counts and appellant appealed.
If the laws of contract were formalized as a deductive system, one of its most basic axioms would be that the formation of a contract requires the manifestation of mutual assent by the parties to the agreement. See Restatement, Second, Contracts Sec. 17. This requisite manifestation may be evinced in two ways. The first and most traditional method involves an offer by one of the parties and an acceptance of that offer by the other. Of more recent origin is the second method, the doctrine of promissory estoppel. An offspring of the intermarriage of tort and contract, this doctrine holds that a promise given without consideration is binding when the promissor should reasonably expect to induce action or forbearance if injustice can be avoided only by enforcement of the promise. Compare id at Sec. 90 with Restatement, Second, Torts Secs. 872, 894. The latter method will be discussed in the next section; the former is discussed here.
From the undisputed facts of the case, one can discern six exchanges that are candidates for the offer and acceptance necessary to the formation of a contract under the first method:
Exchange 1. On May 28, 1986, Wolfson, an agent for petitioner, sent a letter to Newman, an officer of respondent, offering to purchase ten properties owned by respondent. On June 4, 1986, Newman replied to Wolfson by letter, informing him that the offer was unacceptable.
Exchange 2. The letter of June 4, 1986, also set forth the prices respondent was asking for these properties. Wolfson responded by submitting a counteroffer for nine of the properties on behalf of petitioner at prices most of which were below the prices requested by respondent.
Exchange 3. Having received the new offer by petitioner, Newman informed Wolfson that this offer was also unacceptable.
Exchange 4. On June 10, 1986 Wolfson forwarded to respondent a letter from petitioner in which petitioner expressed an interest in purchasing seven properties. Enclosed with the letter was a check for $150,000.00 to be used as a deposit subject to, inter alia, his visual inspection and approval of the properties as well as "a mutually satisfactory purchase and sale agreement and good and sufficient deeds, conveying good and clear record and marketable title." Record Appendix, 391. Petitioner's letter also provided lines for a signature and a date indicating acceptance of the letter's terms, while Wolfson's cover letter requested that the letter be signed and returned. Respondent did neither. Instead, respondent sent the letter described in the next exchange.
Exchange 5. Responding to petitioner's letter of June 10, 1986, respondent informed petitioner by a letter dated June 12, 1986, that once he confirmed his offer respondent would be willing to consider it, noting that if the offer is rejected, petitioner's deposit would be returned. Petitioner returned a copy of this letter with his signature indicating his acceptance of its content. Petitioner subsequently made a new offer described in the next exchange.
Exchange 6. On June 25, 1986, petitioner sent a letter offering to purchase five properties at the prices requested by respondent. The letter also notes, inter alia, that if this offer is "not successful in gaining appropriate approval or conveyance of the property through no fault of the Purchaser, the deposit shall be returned." Record Appendix, 36. In a letter of July 11, 1986, respondent rejected petitioner's offer and returned his deposit.
A consideration of the above exchanges clearly demonstrates that no contract arose from these negotiations. While exchanges 1, 3, and 6 all clearly involved an offer by petitioner, they all just as clearly involved a rejection of that offer by the respondent. Moreover, petitioner's letter in exchange 4 did not even constitute an offer but only an interest in making an offer. Nonetheless, even if one considers this letter an offer, respondent clearly did not accept it. Respondent neither signed nor returned this letter as requested by petitioner. Nor can respondent's next letter to petitioner be construed as the acceptance not given by signature and return of petitioner's letter. Therein, respondent expressly addressed what would happen to petitioner's deposit if his offer were rejected. Rather, respondent's letter to petitioner, forming the first part of exchange 5, constituted an invitation to offer or, more precisely, to confirm petitioner's current offer after he had viewed the properties. While clearly not an offer, even if respondent's letter were construed as an offer, still no contract was formed. Petitioner's reply to this letter, described as the first communication in exchange 6, presented a new offer; thereby terminating petitioner's power of acceptance. See Restatement, Second, Contracts Sec. 39. Similarly, in exchange 2, if respondent's letter is construed as an offer, petitioner terminated his power of acceptance when he submitted his counteroffer for only nine of the properties at prices less than those requested by respondent. Accordingly, we concur with the court below that no contract was formed through the traditional method of offer and acceptance.
The second method through which a contract may come into existence, the doctrine of promissory estoppel, may be considered together with petitioner's other claims. Promissory estoppel as well as deceit, negligent misrepresentation and a violation of Mass.G.L. c. 93A require...
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