Embry v. Hargadine Case Brief
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tl;dr: An employee demanded a contract renewal or he would quit. His boss replied, “Go ahead, you’re all right.” The court held that a binding contract was formed based on the objective meaning of the boss’s words, regardless of his secret intent.
Legal Significance: This case is a foundational authority for the objective theory of contract formation, establishing that assent is determined by the outward expression of intent as understood by a reasonable person, not by the parties’ secret, subjective intentions.
Case Facts & Court Holding
Key Facts & Case Background
Plaintiff Embry’s written employment contract with defendant Hargadine, McKittrick Dry Goods Co. expired on December 15, 1903. On December 23, Embry approached the company president, McKittrick, stating that he must have a contract for another year or he would quit his position immediately. According to Embry, McKittrick was busy but replied, “Go ahead, you’re all right; get your men out and don’t let that worry you.” Embry understood this as an assent to a one-year renewal on the same terms and continued working. McKittrick’s version of the events differed, claiming he told Embry he was too busy to discuss the matter and would take it up later. On March 1, 1904, the company terminated Embry’s employment. Embry sued for breach of contract. The trial court instructed the jury that a contract was formed only if both parties subjectively intended to enter into one. The jury found for the defendant, and Embry appealed the jury instruction.
Court Holding & Legal Precedent
Issue: Does the formation of an enforceable contract depend on the parties’ subjective, unexpressed intentions, or on their outward expressions of assent as interpreted by a reasonable person?
The formation of a contract depends on the objective manifestation of assent. The court reversed the judgment and remanded for a new trial, holding that the trial court erred by instructing the jury that a contract required a subjective meeting of the minds. A valid contract is formed if the promisor speaks words that a reasonable person would take as an assent to the proposed terms, and the promisee understands them as such.
IRAC Legal Analysis
Legal Issue
Does the formation of an enforceable contract depend on the parties’ subjective, unexpressed intentions, or on their outward expressions of assent as interpreted by a reasonable person?
Conclusion
This case solidifies the objective theory as the standard for determining mutual assent in contract formation, emphasizing that a party is bound by the reasonable interpretation of their words and actions.
Legal Rule
The formation of a contract is judged by an objective standard. If a party’s words or acts, judged by a reasonable standard, manifest an intention to agree to the matter in question, that agreement is established, and it is immaterial what may be the real but unexpressed state of that party’s mind. (citing Smith v. Hughes, L. R. 6 Q. B. 597).
Legal Analysis
The court rejected the trial court’s instruction that a contract required a subjective “meeting of the minds.” It reasoned that contract law cannot depend on the secret, inner intentions of the parties, as this would render oral agreements unreliable and unenforceable. Instead, the law imputes to a person an intention corresponding to the reasonable meaning of their words and actions. The court’s analysis centered on the objective theory of assent, citing numerous authorities for the principle that a party’s expressed intent, not their secret one, is what governs contract formation. Applying this standard, the court determined that McKittrick’s statement, “Go ahead, you’re all right; get your men out and don’t let that worry you,” made in direct response to Embry’s demand for a contract renewal under threat of quitting, was unambiguous. A reasonable person in Embry’s position would have understood this language as an assent to his proposal. Therefore, if the jury believed Embry’s account of the conversation, a contract was formed as a matter of law, regardless of McKittrick’s unexpressed intention to defer the decision. The court concluded that the only factual question for the jury was which version of the conversation was true, not what the parties secretly intended.
The Opinion
Summary
- Contract formation is governed by the objective theory of assent, not the parties’ secret, subjective intentions.
- A contract is formed if a promisor’s words or acts, judged by a reasonable person standard, manifest an intent to agree, and the promisee so understands them.
- A jury instruction requiring a subjective “meeting of the minds” is reversible error.
Full text
Complete unedited opinion text as published by the court
We dealt with this case on a former appeal (115 Mo. App. 130). It has been retried and is again before us for the determination of questions not then reviewed. The appellant was an employee of the respondent company under a written contract to expire December 15, 1903, at a salary of $2,000 per annum. His duties were to attend to the sample department of respondent, of which he was given complete charge. It was his business to select samples for the traveling salesmen of the company, which is a wholesale dry goods concern, to use in selling goods to retail merchants. Appellant contends that on December 23, 1903, he was re-engaged by respondent, through its president, Thos. H. McKittrick, for another year at the same compensation and for the same duties stipulated in his previous written contract. On March 1, 1904,„.he was discharged, having been notified in February, that on account of the necessity of retrenching expenses, his services and that of some other employees, would no longer be required. The respondent company contends that its president never re-employed appellant after the termination of his written contract and hence that it had a right to discharge him when it chose. The point with which we are concerned requires an epitome of the testimony of appellant and the counter-testimony of Me
“Mr. Embry, I am just getting ready for the stockholders’ meeting to-morrow, I have no time to take it up now; I have told you before I would not take it up
Embry also swore that when he was notified he would be discharged, he complained to McKittrick about it, as being a violation of their contract, and McKittrick said it was due to the action of the board of directors and not to any personal action of his and that others would suffer by what the board had done as well as Embry. Appellant requested an instruction to the jury setting out in substance the conversation between him and McKittrick according to his version and declaring that those facts, if found to be true, constituted a contract between the parties that defendant would pay plaintiff the sum of $2,000 for another year, provided the jury believed from the evidence that plaintiff com- . menced said work believing he was to have $2,000 for the year’s work. This instruction was refused but the ■court gave another embodying-, in..substance.appellant’s version of the conversation, and declaring it made a contract “if you (the jury) find both parties thereby intended and did contract with each other for plaintiff’s employment for one year from and including December 23, 1903, at a salary of $2,000 per annum.” Embry swore that on several occasions when he spoke to Mc-Kittrick about employment for the ensuing year, he asked for a renewal of his former contract and that on- December 23d, the date of the alleged renewal, he went into Mr. McKittrick’s office and told him his contract had expired and he wanted to renew it for a year, having always worked under year contracts. Neither the refused instruction nor the one given by the court embodied facts quite as strong as appellant’s testimony, because neither referred to appellant’s alleged state
“The latter clause of the instruction is erroneous and misleading. It is true that in every case of purchase the question of sale or no sale is a matter of intention; but such intention must always be determined by the conduct, acts and express declarations, of the parties and not by the secret intention existing in the mind or minds of the contracting parties. If the validity of such a contract depended upon secret intentions of the parties, then no oral contract of sale could be relied on with safety. [58 Mo. loc. cit. 473.]”
In Smith v. Hughes, L. R. 6 Q. B. 597, 607, it was said:
“If, whatever a man’s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms proposed by the other party, and that other party upon that belief enters into the contract with him, the man thus conducting himself would be equally bound as if he intended to agree to the other party’s terms.”
And that doctrine was adopted in Phillip v. Gallant, 62 N. Y. 256.
In 9 Cvc. 245, we find the following text:
“The law imputes to a person an intention corresponding to' the reasonable meaning of his words and acts. It judges his intention by his outward expressions and excludes all questions in regard to his unexpressed intention. If his words or acts, judged by a
Even more pointed was the language of Baron Bramwell in Brown v. Hare, 3 Hurlst. & N. \*484, \*495:
“Intention is immaterial till it manifests itself in an act. If a man intends to buy, and says so to the intended seller, and he intends to sell and says so to the intended buyer, there is a contract of sale; and so there would, be if neither had the intention.”
In view of those authorities we hold that though McKittrick may not have intended to employ Embry by what transpired between them according to the latter’s testimony, yet if what McKittrick said would have been taken by a reasonable man to be an employment, and Embry so understood it, it constituted a valid contract of employment for the ensuing year.
The next question is whether or not the language used was of that character; namely, was such that Embry, as a reasonable man, might consider he was re-employed for the ensuing year on the previous terms, and act accordingly. We do not say that in every instance it would be for the court to pronounce on this question, because, peradventure, instances might arise in which there would be such an ambiguity in the language relied on to show an assent by the obligor to the proposal of / the obligee, that it would be for the jury to say whether , a reasonable mind would take it to signify acceptance of , the proposal. [Belt v. Goode, 31 Mo. 128; Davies v. Baldwin, 66 Mo. App. 577.] In Lancaster v. Elliott, 28 Mo. App. 86, 92, the opinion, as to the immediate point, reads:
“The interpretation of a contract in writing is always a matter of law for determination by the court, and equally so, upon like principles, is the question what acts and words, in nearly every case, will suffice to con
The general rule is that it is for the court to construe the effect of writing relied on to make a contract and also the effect of unambiguous oral words. [Belt v. Goode, supra; Brannock v. Elmore, 114 Mo. 55, 21 S. W. 451; Norton v. Higbee, 38 Mo. App. 467, 471.] However, if the words are in dispute, the question of whether they were used or not is for the jury. [Belt v. Goode, supra.] With those rules of law in mind, let us recur to the conversation of December 23d between Embry and McKittrick as related by the former. Embry ', was demanding a renewal of his contract, saying he had : been put off from time to time and that he .had only a few days before the end of the year in which to seek employment from other houses, and that he would quit then and there unless he was re-employed. McKittrick inquired how he was getting along with the department and Embry said they (i. e., the employees of the department) were very busy getting out salesmen; whereupon McKittrick said: “Go ahead, you are all right; get your men out and do not let that worry you.” We think no reasonable man would construe that answer to Embry’s demand that he be employed for another year, otherwise than as an assent to the demand, and that Embry had the right to rely on it as an assent. The natural inference is, though we do not find it testified to, that Embry was at work getting samples ready for the salesmen to use during the ensuing season. Now when he was complaining of the worry and mental distress he was under because of his uncertainty about the future, and his urgent need,either of an immediate contract with respondent, or a refusal by it to make one, leaving him free to seek employment elsewhere, McKittrick must have answered as he did for the purpose of assuring appellant that any apprehension was needless, as appellant’s services would
Some other rulings are assigned for error by tbe appellant, but we will not discuss them because we think they are devoid of merit.
The judgment is reversed and tbe cause remanded.