The lawyers in Baker v. Bowden, 2017 NCBC 30, decided this week by Judge Robinson, were negotiating a settlement agreement by email. The Plaintiff thought that it had a deal. When the Defendant balked, the Plaintiff moved the Business Court to enforce the settlement.
The Plaintiff, whose lawyer had sent an email to the Defendant’s lawyer stating “[m]y client accepts the offer,” found that there was no offer anymore, and no enforceable agreement.
The Plaintiff’s lawyer thought in accepting the offer that the Defendant’s offer was still open for acceptance. But even the Defendant’s lawyer wasn’t sure if it was. His last email to Plaintiff’s counsel said:
in the interim since yesterday afternoon my client is actually having second thoughts about his offer, so I’m not sure it’s still on the table. I’m not saying it isn’t, but I need to talk with him and see if I can work him through this. I’ll let you know later this afternoon.
The Plaintiff’s email accepting the by then questionable offer followed this email, but Judge Robinson concluded that the “second thoughts” email was a valid revocation of the offer. Op. ¶23. You don’t need to use the word “revoke” to withdraw an offer, and “[a]ny clear manifestation of unwillingness to enter into the proposed bargain is sufficient.” Op. ¶23.
The situation before the Court was spelled out in the Restatement (Second) of Contracts, which gives this example of a similar situation when an offer is revoked:
when an offeror states, “Well, I don’t know if we are ready. We have not decided, we might not want to go through with it.”
Op. ¶22 (quoting Restatement (Second) of Contracts sec. 42, comment d).
Reliance on the Restatement as authority seems like a firm foundation. The Restatement is said to be “a work without peer in terms of overall influence and recognition among the bar and bench.”