Takeaway
In short, this case holds that when an offer permits acceptance by performance, reasonable preparatory acts directed toward the job can constitute commencement of performance and create a contract before the offeror's attempted revocation.
The Greens signed a written proposal on June 10, 1953, for Ever-Tite Roofing Corporation to re-roof their home on credit. The agreement provided that it would become binding either upon written acceptance by an authorized Ever-Tite officer or upon commencement of the work. Because financing was necessary, Ever-Tite obtained credit information and submitted it to the lending institution for approval.
After the lender approved the financing on June 18 or 19, Ever-Tite loaded roofing materials onto trucks, sent its workmen from Shreveport to the Greens' home, and prepared to perform. When the crew arrived, the Greens told them that they had hired another roofer two days earlier and would not allow Ever-Tite to proceed. The Greens had not previously notified Ever-Tite that they intended to withdraw their proposal.
The trial court held that no contract had formed because the Greens notified Ever-Tite's workers before actual roofing work began. It dismissed Ever-Tite's damages action. Ever-Tite appealed.
Issue #1
Whether the Greens could revoke their proposal before Ever-Tite accepted it by beginning performance.
Holding
No. The Greens were required to leave the offer open for a reasonable time, and Ever-Tite acted within that reasonable time.
Reasoning
Although an offer ordinarily may be withdrawn before acceptance, Louisiana Civil Code provisions qualify that rule when the offer gives the offeree a right to conclude the contract by assenting within the time the offeror intended to allow. Where, as here, the agreement sets no precise deadline for acceptance, the law supplies a reasonable time measured by the contract's nature, the parties' circumstances, and ordinary business practice.
The parties understood that the work was to be financed on credit and that Ever-Tite therefore needed time to obtain a credit report and secure the lending institution's approval. Ever-Tite promptly requested the credit report, supplied additional information requested by the lender, and dispatched its crew immediately after financing approval. Thus, its processing and acceptance were diligent rather than unreasonably delayed.
The Greens gave Ever-Tite no notice of revocation between June 10 and the crew's arrival at their home. Their claim that they did not know how to contact the company was unpersuasive because their copy of the agreement displayed Ever-Tite's name, address, and telephone number. They could not silently hire another contractor and then treat their first proposal as withdrawn after Ever-Tite had reasonably relied on it and acted to accept.
Issue #2
Whether Ever-Tite commenced performance, and thereby accepted the agreement, before receiving the Greens' attempted revocation.
Holding
Yes. Ever-Tite commenced performance when it loaded the materials and sent the trucks and workmen to the Greens' residence; a binding contract existed before the Greens objected.
Reasoning
The agreement expressly allowed Ever-Tite to accept either through written acceptance by an authorized officer or by commencing performance. Although no authorized officer formally signed an acceptance, Ever-Tite chose the alternative method of acceptance by performance.
Commencement did not require the workers to begin physically installing the roof at the house. Loading the required materials, assigning the crew, and transporting both workers and materials to the job site were concrete acts undertaken to perform this particular agreement. Those acts began before the Greens told the crew not to work.
Because Ever-Tite accepted by commencing performance before it received any notice of dissent, the proposal and acceptance formed a completed contract. The Greens then breached that contract by employing others to do the roofing and preventing Ever-Tite from performing.
Issue #3
What damages, including attorney's fees, could Ever-Tite recover for the Greens' breach.
Holding
Ever-Tite could recover its proven expenditures and lost profit, totaling $311.37, but not attorney's fees.
Reasoning
For breach of a contract whose object is not payment of money, Louisiana law permits recovery of the loss sustained and the profit of which the injured party was deprived. Ever-Tite proved without contradiction that it spent $85.37 loading, transporting, and unloading materials and paying the workers, and that it expected a $226 profit on the job. The proper award was therefore $311.37.
The agreement's attorney-fee provision applied when an attorney was employed to collect under the contract. Ever-Tite's suit instead sought damages for the Greens' breach. Because neither the contract nor a separate law authorized attorney's fees in this damages action, the court denied them.