Law 201

Case Study 1

Lamar Smunt, eccentric millionaire, sends Casimir Roginsky, famous portrait artist, a letter offering to pay Roginsky $500,000 to do a portrait of Smunt’s mother. Roginsky sends back a letter that says: “I’ve had the misfortune of seeing your mother and would need $750,000 before my artistic sensibilities would allow me to undertake such a harrowing project.” Three hours later, after reflecting upon the sad state of his finances, Roginsky telephones Smunt and says: "I’d be delighted to paint your lovely mother. Destroy my letter without reading it. It was sent by mistake.” Smunt disregards Roginsky’s instructions and reads Roginsky’s letter when it arrives. He becomes enraged at the insult to his mother and refuses to allow Roginsky to do her portrait. Roginsky files a breach of contract suit against Smunt.

Response:

In case study one it is quite clear that Lamar Smunt was initially the “offeror”, when he sent Mr. Roginsky a letter “offering to pay Roginsky $500,000 to do a portrait” of his mother. Under the rules of agreements, when an offer is made by the “offeror”, the other party “may accept the terms of the offer, and if he or she does so, a contract is created.” Here no such thing occurred, in fact, when Mr. Roginsky received the offer, he then created what is called a “counteroffer”, stating: “I’ve had the misfortune of seeing your mother and would need $750,000 before my artistic sensibilities would allow me to undertake such a harrowing project.”

Therefore, “A counteroffer by the offeree simultaneously terminates the offeror’s offer and creates a new offer.” Moreover, by Mr. Roginsky making a counteroffer, he has made a clear indication that he has rejected the initial offer. Rejection of an offer by the offeree communicates “an offer is terminated if the offeree rejects it. Any subsequent attempt by the offeree to accept the offer, in this case Mr. Roginsky, is ineffective and is construed as a new offer that the original offeror is...