Summary of Lucy v. Zehmer
Sup. Ct. of Appeals in VA (1954)
196 Va. 493, 84 S.E.2d 516
P: W.O. Lucy, J.C. Lucy (brothers)
D: A.H. and Ida S. Zehmer
Procedural History: P filed a cause of action to force D to perform a written promise. Trial court dismissed case for failure to establish their right to specific performance. P appealed, appellate court reversed and remanded.
Facts: D owned a farm (purchased for $11K) that P had made several offers to purchase, all of which D rejected. D met P in a restaurant one evening after drinking, and they had a substantial discussion of sale of the farm. P made an offer of $50K. D wrote out and signed an agreement to sell the farm to P on the back of a receipt. P took the written agreement and offered $5 to bind the agreement, which D refused to accept. D claims he was too drunk to enter into any real contract and that the memo was written as a joke. Trial court dismissed the case.
Issue: Is a promise enforceable if it was made as a joke, if the promisee believed it to be a real promise? Yes.
Was P reasonable in taking the promise made by D seriously, and thus, does he have a cause of action against D to enforce the promise? Yes.
Rationale: P and D were in discussion about the sale for a good length of time; the many steps taken by P (second draft, Mrs. Zehmer’s signature, exam of title, memo) show that he believed himself to be engaging in a serious business transaction. D’s claim of drunkenness is not convincing, and court found that he was not too intoxicated. The case contained no grounds that urge against specific performance – it was a good deal. The court ruled that just because D had not mentally agreed to the deal, his conduct indicated to P in a reasonable manner that the transaction was not a joke, and P had no knowledge of D’s mental assessment. Therefore, P wins.
Law: The parties of a contract do not have to mentally agree to the deal. If their words or actions have the reasonable meaning of a serious business transaction, undisclosed intentions are immaterial and do not render the contract unenforceable. A contract must have a good faith offer and a good faith acceptance with terms of consideration known by each party.