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New Headley Tobacco Warehouse Co. v. Gentry’s Ex’r Case Brief

Summary of New Headley Tobacco Warehouse Co. v. Gentry’s Ex’r

P/S: Appeal by plaintiff (lessee) after judgment for the defendant.  Suit seeks a judicial declaration of the lessee’s right to the extension of the lease.

F: Defendant executed a lease to the plaintiff for a term of 21 ½ years.  The contract contained no provision for extension or renewal.  Ten years later the defendant composed a letter that outlined the terms for a contract extension with the plaintiff.  The lessee did not make any response before the plaintiff died three years later.  More than four years after the letter, and nearly seven months after the death of the defendant, the lessee communicated acceptance of the offer.  They attempted to act on this acceptance and begin to build on additions to their building, but this and other efforts to obtain recognition of a right were futile.

I: Did the plaintiff lose its right to an extension of a lease due to the fact that the defendant died before the completion of the contract?

H: The right of the appellant (the one who appeals) to accept the offer to extend its lease terminated with the death of the lessor.  Judgment affirmed.

Rule: A revocable offer is terminated by the offeror’s death or such insanity as deprives him of legal capacity to enter into the proposed contract. (pg. 83, Restatement of Contracts).

R:

  • It was merely a volunteer offer, submitted without consideration, and under no contractual duty. (pg. 82, bottom).
  • In making a contract there must be two minds, at least, concurring at the moment of its completion.  This can not occur if there is but one of the contracting parties in existence (pg. 83).
  • The death of a party who had the right of revocation or withdrawal of an offer to contract renders the completion impossible and terminates the negotiations or proceedings at the very point where they were when he died. (pg. 83)

QUESTIONS: 

1.1  Offer did not include any language about acceptance.  Offer was for a promise, not a performance.

1.2  Offer said nothing about Gentry’s death; probably knew about his death because they sent the letter to his executor.

2.1    yes, because those terms would have already been agreed upon by both parties

2.2    the outcome of the case would have allowed New Headley to continue building since they began while Gentry was alive, assuming they acted consistently with his letter.

2.3    The court did not take this too literally; in order to have a contract both parties have to be in agreement at the time it is completed, and without a meeting of the minds this is not possible.  A contract formed before someone dies can be enforced after death because all the elements that create a contract were present at the time they were alive, and they agreed to the terms of the contract before the death; i.e. during life, it was their wish to enter into a contract.

2.4    It makes sense that a meeting of the minds is necessary for a contract to be entered into, and this is impossible if one party is dead.  However, an offer made a living person, and then accepted by another living person seems to fulfill the requirement, even if the offeror dies.  However, there should then be a reasonable time frame est. so that it is reasonable offeree would have entered into contract regardless of the fact that the offeror is dead.

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