Unpublished Disposition, 915 F.2d 1581 (9th Cir. 1990)Annotate this Case
United States Court of Appeals, Ninth Circuit.
Before CANBY and TROTT, Circuit Judges and LEGGE* District Judge.
James Davis appeals the district court's grant of A.M. Todd Company's ("Todd") motion for summary judgment on Davis's action to declare a contract void. Davis claims that the district court erred in concluding that Todd had effectively accepted Davis's offer for a contract, and that Todd's consideration was not illusory. Upon de novo review of the district court judgment, viewing the record in the light most favorable to Davis, we affirm.
"Executed in Duplicate" as a condition precedent to acceptance
Davis admitted that he and Todd both signed at least one copy of their written agreement, which included the statement, "Executed in duplicate." Davis further admitted that at the time they both signed the contract, he considered himself and Todd bound by the terms of that contract. Davis argues, however, that since the copy he retained was not signed by Todd, Todd had thereby failed to satisfy a condition precedent to acceptance: namely, that Todd provide Davis with a copy of the agreement signed by both parties.
Section 2-206 of the Uniform Commercial Code, codified at ORS 72.2060 (1977), provides that " [u]nless otherwise unambiguously indicated by the language or circumstances: (a) An offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances...." In other words, any conditions placed on an offeree's power of acceptance must be clear and explicit.1
The phrase "Executed in duplicate" cannot reasonably be considered as "unambiguously indicat [ing]" a condition of acceptance. See Pacific Photocopy, Inc. v. Canon U.S.A., Inc. 57 Or.App. 752, 646 P.2d 647, (1982). It is clear from Davis's own statements that, by signing at least one copy of the contract in Davis's presence, Todd accepted the offer in a "manner and ... medium reasonable in the circumstances."
Propriety of Summary Judgment
Davis claims, nevertheless, that it was improper for the judge to take this question from the jury because it required interpretation of an ambiguous contract term. Davis correctly asserts that ambiguous contract terms are properly determined only by the jury, but Oregon law clearly provides that the judge must make the initial determination whether a term is ambiguous. See Mann v. Wetter, 100 Or.App. 184, 188, 785 P.2d 1064, 1067 (1990).
The district court found that the phrase "Executed in duplicate" was not an unambiguous condition of acceptance. That finding, however, does not mean that the phrase is an ambiguous contract term and must, therefore, be interpreted by a jury. The district court found that the term was not ambiguous. It concluded that the phrase was not a condition precedent to acceptance, but rather an acknowledgment that the contract had been executed in duplicate counterparts and a reminder to the parties to distribute executed copies to both parties.2
That ruling was entirely proper for the district court to make upon motion for summary judgment. We accordingly affirm.
Mutuality of Obligation
Davis also argues that cancellation provisions in the contract were so subjective and open-ended as to render Todd's consideration illusory, thereby destroying mutuality of obligation and rendering the contract unenforceable. Those provisions allowed Todd to cancel if Davis's crop was "not free from weeds and grass at time of harvest" or if "the Oil of Peppermint tendered for delivery [was] not Choice for any reason."
This argument is without merit. Todd's options under these provisions were sufficiently constrained by the terms of the contract and Oregon law. The contract included several criteria which give objective content to the term "choice". Also, under the Uniform Commercial Code Sec. 1-205, codified at ORS 71.2050 (1977), the parties' prior dealings can "be regarded as establishing a common basis of understanding for interpreting their expressions." Furthermore, U.C.C. Sec. 1-203, ORS 71.2030 (1977), imposed upon each party an "obligation of good faith in its performance or enforcement" of the contract.
Thus, Todd could not arbitrarily cancel the contract under these provisions. It was not free to cancel because of an insignificant quantity of weeds in the field. Neither could it cancel because the peppermint oil was not "choice" without giving a good-faith reason (e.g., because it smelled like spearmint instead of peppermint).
Nothing in the record creates a material dispute of fact relevant to this issue. The district court properly ruled, as a matter of law on a summary judgment motion, that Todd was sufficiently constrained by the contract to satisfy the requirement of mutuality of obligation.
We conclude that this appeal is frivolous, and award double costs to the appellee. Fed R.App.P. 38.
The Honorable Charles A. Legge, United States District Judge for the Northern District of California, sitting by designation
This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Cir.R. 36-3
This statute complements the longstanding rule in Oregon that construing contract terms to be conditions precedent is disfavored as a matter of law. See Kelp Ore Remedies Corp. v. H.H. Brooten, 129 Or. 357, 373, 277 P. 716, 721 (1929)
Failure to heed that reminder, where both parties admitted signing and being bound by the contract, does not create a problem in contract formation