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contract

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Ehlen v. Melvin, 823 N.W.2d 780, 2012 ND 246

Facts

In February 2011, Paul Ehlen expressed interest in purchasing property owned by the Melvins. Ehlen sent a purchase agreement offering $850,000, which included an amendment with additional terms. The Melvins modified the agreement, adding new terms and correcting details, and returned it to Ehlen. However, Ehlen did not respond, and the Melvins later learned he had not paid or accepted the modifications, leading to the Melvins terminating the transaction.

[¶ 4] On February 16, 2011, Ehlen sent the Melvins a document entitled “Purchase Agreement,” offering the Melvins $850,000 for the property. […] The Melvins made substantive changes to the agreement before signing it and their acceptance was not unqualified.

Issue

Did the changes made by the Melvins to the purchase agreement constitute a counteroffer, and did Ehlen accept that counteroffer?

Did the changes made by the Melvins to the purchase agreement constitute a counteroffer, and did Ehlen accept that counteroffer?

Rule

A counteroffer is created when the acceptance of a contract includes changes or additions to the original offer, which must be accepted by the original offeror for a valid contract to exist.

A counteroffer is created when the acceptance of a contract includes changes or additions to the original offer, which must be accepted by the original offeror for a valid contract to exist.

Analysis

The court determined that the Melvins' modifications to the purchase agreement were substantive and constituted a counteroffer. Ehlen's failure to respond or accept the modified terms meant that there was no mutual consent to form a binding contract. The court found that the evidence supported the conclusion that the parties did not agree on the essential terms of the agreement.

The court determined that the Melvins' modifications to the purchase agreement were substantive and constituted a counteroffer. Ehlen's failure to respond or accept the modified terms meant that there was no mutual consent to form a binding contract. The court found that the evidence supported the conclusion that the parties did not agree on the essential terms of the agreement.

Conclusion

The Supreme Court affirmed the district court's judgment, concluding that no valid contract existed between Ehlen and the Melvins due to the lack of mutual consent.

The Supreme Court affirmed the district court's judgment, concluding that no valid contract existed between Ehlen and the Melvins due to the lack of mutual consent.

Who won?

The Melvins prevailed in the case because the court found that Ehlen did not accept their counteroffer, and thus no binding contract was formed.

The Melvins prevailed in the case because the court found that Ehlen did not accept their counteroffer, and thus no binding contract was formed.

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