Bretz v. Portland General Electric Co.
United States Court of Appeals for the Ninth Circuit
779 F.2d 1355 (9th Cir. 1985)
Bretz (plaintiff) initially offered to buy Beartooth stock from Portland General Electric (PGE) (defendant) for $2 million; after rounds of revised letters, PGE responded on August 23 rejecting that price but saying it would be "receptive to an offer" at $2.75 million and inviting Bretz to resubmit on those terms, while also noting other commitments it would need to clear before selling. On August 30, Bretz sent a letter agreeing to $2.75 million, and that same day, before PGE had even received the letter, contracted with a third party to sell Beartooth coal. When PGE learned of that third-party deal, Bretz claimed PGE breached an agreement to sell him the stock, and sued; the district court found no contract existed and granted PGE summary judgment, and Bretz appealed, arguing PGE's August 23 letter was a counter-offer he had validly accepted.
Whether a firm offer sufficient to form a contract exists when, based on the parties' prior negotiations and expectations, the offer's terms would reasonably lead the recipient to believe he could create a binding contract simply by accepting.