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Contracts Case Brief # 6

Title and Citation: Normile v. Miller, 326 S.E.2d. 11 (1985) *


IMPORTANT CASE *
Identities of Parties: D (Hazel Miller) was selling real estate in NC; P
(Normile and Kurniawan) was a potential buyer and P (Segal) the actual
buyer.
Procedural History: The Ps separate suits but were consolidation into
one. The trial court granted Segals motion for summary judgment and
P (Normile and Kurniawan) appealed decision to Court of Appeals for
courts denial of their motion for summary judgment. Court of Appeals
affirmed decision, P (Normile) appealed to the Supreme Court of North
Carolina.
Facts: August 4, D listed a piece of real estate in Charlotte, NC. P
(Normile) saw the property through a real estate broke, after seeing
the property they prepared an offer. The offer specified that it must be
accepted by August 5 at 5pm. D received the offered and made
several changes before signing it and returning the offer to P. When
the broker gave the counteroffer to P, the P did not accept or reject the
offer, just said he would wait before deciding what to do. The real
estate broker thought that the P would reject the offer because he
indicated that the increase in the earnest money and decreased of the
loan were challenging. On August 5 Segal (P) at 12:30am signed an
offer to purchase the property from the D with the terms very similar to
D counteroffer. The D accepted the offer from (P) Segal. Then at
around 2pm the real estate broker told the P (Normile) that the
counteroffer has been revoked you snooze, you lose; the property has
been sold. Before 5pm P (Normile) signed the D counteroffer and
delivered it with the earnest money deposit.
Issue(s): (A) If a seller rejects original offers but makes a counteroffer
that is not accepted by the prospective buyer, does the prospective
buyer have the power to accept the counteroffer after it has been
revoked? Can an offeree (P) enforce a contract to buy property
when he did not accept the counteroffer to buy until after the
offer been revoked? (B) Did the P accept or reject D counteroffer?

Holding and Rule: (A) No, a prospective buyer cannot enforce a


contract to buy property when he did not accept the offer until after it
has been revoked. (B) P manifest no intent on signing the offer, he did
accept or reject the offer.

Courts Reasoning: No. An offer to purchase is the offer by a


purchaser to buy real estate. If the offer to purchase contains a clause
stipulating a certain period of time in which the offer must be
accepted, the offer will automatically expire at that specified time if it
has not been accepted. If the offeree responds to an offer by changing
the terms of the offer or adding new ones, then the original offer is
rejected and a counter-offer is made. An offer is freely revocable until
accepted or rejected by the offeree. Notice of revocation may be
communicated directly or indirectly. Indirect communication exists
when the offeree has reliable direct or indirect information that the
offeror has taken definite action inconsistent with an intention to enter
into a contract. An option contract is irrevocable for an agreed-upon
time limit. An option contract is created when a property owner gives,
in exchange for valuable consideration, another the exclusive right to
buy property at a fixed price within a specified period of time. In the
current matter, Miller did not accept P (Normiles) offer, but made a
counteroffer by changing material terms of the original offer. The most
notable change was that regarding payment of the purchase price.
Additionally, Millers counteroffer did not create an option contract.
There is no indication in the language of the counteroffer that Miller
would agree to sell the property at a fixed price within a certain period
of time. Even though Millers counteroffer technically included a time
limit of the original offer, the time limit cannot be included in the terms
of Millers counteroffer. The effect of Millers counteroffer was to
completely reject all the terms of P (Normiles) offer, including the
time limit. The terms of Millers counteroffer did not include a time limit
and, therefore, did not create an option contract. Therefore, Normile
must have accepted Millers counteroffer before she revoked it.
Normile neither accepted nor rejected Millers counteroffer. Normile
told Byer that he was going to wait and consider the counteroffer. He
waited too long and the property was sold to another purchaser. Miller
effectively communicated her revocation of the offer when Byer
informed Normile that the property had been sold. Normiles attempts,
later that same day, to accept the counteroffer were futile since he had
no power of acceptance at that time. Accordingly, because Normile
failed to accept the counteroffer before valid revocation, Miller and
Normile did not enter into a binding contract.
Judgment and Order: The decision of the trial court is affirmed.
Main rules of formation