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Keywords

contractappealtrialsummary judgment
contractappealtrialsummary judgment

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Carver v. Teitsworth, 1 Cal.App.4th 845, 2 Cal.Rptr.2d 446

Facts

Robert A. Teitsworth decided to sell his property in Rancho Santa Fe and listed it with a broker for $795,000. After receiving two full-price offers, Teitsworth issued counteroffers to both bidders, stating that the sale price would be determined by sealed bids. On the bid opening day, Carver submitted a bid that was contingent on being '$1,000 more than any other sealed bid.' The Crowleys submitted a higher bid, leading to disputes over which bid was valid and binding.

The facts which give rise to the parties' dispute are for the most part, undisputed. In early September 1988, Robert A. Teitsworth decided to sell four acres of improved property he owns in Rancho Santa Fe. Toward that end he listed the property with a real estate broker. The listed price was $795,000. One day after listing the property, Teitsworth's broker had two full-price offers. One offer was made by Leroy Carver III. The other offer was made by James E. Crowley and Marybeth Crowley.

Issue

Did the vendor's counteroffer create a binding contract with the highest bidder, and was Carver's bid valid despite its contingent nature?

Did the vendor's counteroffer create a binding contract with the highest bidder, and was Carver's bid valid despite its contingent nature?

Rule

A seller who manifests an intent to be bound by the highest bid submitted creates an offer, and a bid that is contingent on being higher than another bid may still be enforceable if the price can be objectively determined.

A seller who manifests an intent to be bound by the highest bid submitted creates an offer, and a bid that is contingent on being higher than another bid may still be enforceable if the price can be objectively determined.

Analysis

The court found that Teitsworth's counteroffer was a binding offer to sell, not merely an invitation to bid. It also determined that Carver's bid, while unconventional, was not too uncertain to form a contract because it could be objectively calculated based on the Crowleys' bid. The court noted that the parties had not had the opportunity to present expert evidence regarding the custom of relative bidding in real estate, which contributed to the decision to reverse the summary judgment.

The court found that Teitsworth's counteroffer was a binding offer to sell, not merely an invitation to bid. It also determined that Carver's bid, while unconventional, was not too uncertain to form a contract because it could be objectively calculated based on the Crowleys' bid. The court noted that the parties had not had the opportunity to present expert evidence regarding the custom of relative bidding in real estate, which contributed to the decision to reverse the summary judgment.

Conclusion

The court reversed the trial court's summary judgment against Carver, allowing the case to proceed for further determination of the bids' validity.

The court reversed the trial court's summary judgment against Carver, allowing the case to proceed for further determination of the bids' validity.

Who won?

Carver prevailed in the appeal as the court found that the trial court erred in entering summary judgment against him, allowing for further proceedings regarding his bid.

Carver prevailed in the appeal as the court found that the trial court erred in entering summary judgment against him, allowing for further proceedings regarding his bid.

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