LEGAL DOCUMENTS:

Suppose a more senior attorney, Dewey D. Delaney, has called you into his office and told you the following:

The Firm has recently been retained by Jack Montagne to file suit against Asten Lift Company, Ltd. ("Asten"), a manufacturer of double and triple chair ski lifts based in Colorado. The file number is 98876-001. The basis of the suit he seeks to bring is an accident that occurred on Devil's Mountain, located in Pennsylvania. The accident involved his stepsister, Monica Gordon, who was thrown out of a triple chair lift and killed when a cable broke. Due to the circumstances of the accident, I think we might be able to state a cause of action for negligent infliction of emotional distress.

The facts of the case as I understand them are as follows. Jack, who is apparently an avid skier, took a ski vacation last winter with his stepsister, Monica. The two went to Devil's Mountain, as I said, where they rented a chalet for two weeks. Every morning they would have a quick breakfast, step outside, snap on their skis and ski the one hundred yards to the base of the mountain and the Diamond Triple Chair Lift, which would take them to the midpoint of the mountain. From there they would ride the Devil Triple Chair Lift (the "Devil Chair") to the peak. Once at the peak, they would separate, Jack to ski the wide open "bowls" on the back of the mountain and Monica to ski the trails on the face of the mountain. However, they had a standing agreement to meet for lunch at one o'clock at Tipler's, the restaurant at the top of the Devil Chair. They had consistently followed this schedule for seven days, and would not have deviated from it on the eighth day but for the accident.

On the day of the accident, Jack was standing near the top of the Devil Chair waiting for Monica and enjoying the sunshine. It was 12:50 p.m. Waiting for her there had become his habit. Ever since their first day on the mountain she had timed her skiing so that her last run before lunch was down Go Devil, the trail which wound back and forth under the Devil Chair, and ended at the midpoint. A run down Go Devil would take approximately half an hour. Then she would take the Devil Chair back to the top and Tipler's, a ride that took

approximately twenty-five minutes. Jack had met her at the top of the chairlift every day, and she had consistently arrived within five minutes of the appointed time. Jack had been scanning the skiers as they came into view for about five minutes when he heard a loud noise that sounded like a large branch breaking off of a tree. The lift slowed to a stop and the chairs rolled back approximately 25 feet. Then, as Jack and those around him watched in horror, a wave raced up the cable, abruptly pulling the chairs ten or twelve feet up into the air and dropping them again just as suddenly. The chairs had no safety bar and Jack, who could see approximately ten percent of the chairs from his vantage point, saw people hurled out of their chairs and to the ground, which he knew was at times a 35 foot drop. Some skiers were miraculously able to hold on and remain in the chairs.

Jack could think only of Monica, who he knew had been riding the lift but who might now be lying injured or dead on the mountain. Jack started down the mountain, frantically seeking Monica in her polka-dotted ski jacket. Other skiers and the ski patrol were rushing to help those who had been thrown to the ground. Screams and moans filled the air and while some skiers writhed in pain, others seemed not to move at all. Dark blotches of blood stained the snow.

When he had gone approximately one hundred yards down the mountain, Jack still had not seen his stepsister and the trail wound away from the lift. He was almost frantic with fear and worry. Abandoning the trail to continue his search, Jack skied down directly under the chair. As he made his way through the crunchy snow and around the rocks, Jack reassured the skiers lying on the ground and those clinging to the chairs that help was en route, but he did not stop. Then he saw her. She lay on the ground, perfectly still, near a large rock. Jack took off his skis and made his way to her side. She made no sound. As he held her, he saw the gash and the blood caked to the back of her head. Her pulse was weak and irregular. Jack covered her with his jacket. Within ten minutes help arrived, and Monica was taken down to the base of the mountain in a stretcher. Jack never left her side. Within minutes of reaching the makeshift emergency center she died of head injuries sustained in the fall. She had never regained consciousness. Less than four minutes had passed from the moment Jack witnessed the skiers being thrown from their chairs and the moment he reached Monica.

Since the accident, Jack has had recurring nightmares, has suffered severe depression, and has experienced significant weight loss. He has been under continuing medical supervision for these conditions, none of which afflicted him prior to the accident.

Jack and Monica had been close since his mother and her father were married when he was 16 and she was 15. Both were only children who had longed for a sibling. At the time of the accident, both were in graduate school in Philadelphia. They talked often and met regularly for meals. Ever since Monica's father had died three years ago, and Jack's mother six months later, the two had taken a skiing vacation around Christmas and New Years so that they could spend the holidays together.

Suppose you are to prepare a memo on whether Jack Montagne could successfully state a cause of action for negligent infliction of emotional distress.

For this assignment you will only draft parts of the memo. We will be using this same hypothetical for all assignments in this module.

In a word document submit the following: Heading Issue Facts Discussion Conclusion

I will provide you with an example of a memo for you to use.

SAMPLE MEMO

TO: Gaby Duane FROM: Clark Thomas RE: Loman's Fashions - Breach of contract claim (advertising circular) DATE: April 26, 2002

QUESTION PRESENTED

Under New York law, did Loman's Fashions' description of a designer leather coat in an advertising circular constitute an offer to sell the coat which became a binding contract when the text of the advertisement indicated that the coats were a "manufacturer's closeout" and that the early shopper would be rewarded, and when a shopper signified her intent to purchase the coat according to the advertised terms?

SHORT ANSWER

No. Where, as here, the text of the advertisement merely stated that the sale was a "manufacturer's closeout" and that the "early" shopper would "catch the savings," the advertisement was not an offer to sell the coat which could be converted into a binding contract by conduct signifying an acceptance of the advertised terms.

FACTS

Loman's Fashions, a retailer of women's and men's outerwear, distributed a circular in November advertising a manufacturer's closeout of designer women's leather coats for $59.99, coats that regularly sold for $300.00. The ad announced that the store would open at 7 a.m. on Friday, November 30, and stated that the "early bird catches the savings!" After about fifteen minutes, all the advertised coats had been sold. At 7:30 a.m., a shopper inquired about the coats and was told that there were none left, but she complained that Loman's was obligated to sell her a comparably valued designer leather coat at the advertised price. The store manager declined, and the shopper filed a complaint in Small Claims Court, ⁹ alleging that Loman's had breached a contract by failing to sell the advertised leather coats at the advertised price.

Loman's president, Willi Loman, stated that the store occasionally gives rain checks when it is possible to replenish supplies of an item that Loman's can purchase at a discount. In this case, the manufacturer had discontinued the line of coats and Loman's was not prepared to sell other, designer leather coats at such a drastic markdown. Loman expressed concern that, if the shopper's interpretation were to hold, Loman's would have to reconsider its marketing strategies; she had assumed that the advertised terms applied while supplies lasted. She asks whether Loman's would have any contractual obligation under these circumstances.

DISCUSSION

Loman's Fashions has been sued by a shopper for a breach of contract for its failure to sell a designer leather coat that had been advertised for sale at a substantially marked-down price. Loman's contends that the advertisement was intended to apply while supplies of the item lasted, and that is it not obligated to sell the shopper a comparably valued coat at the advertised price. The issue in this case is whether a retailer's advertisement will be considered to be an offer that may be turned into a binding contract by a shopper who signifies an intention to purchase the items described in the advertisement. A court would likely conclude that the shopper did not state a cause of action for breach of contract because the advertisement did not constitute an offer which, upon acceptance, could be turned into a contract but rather and invitation to negotiate.

In New York, the rule is well settled that an advertisement is merely an invitation to enter into negotiations, and is not an offer that may be turned into a contract by a person who communicates an intention to purchase the advertised item. Geismar v. Abraham & Strauss, 439 N.Y.S.2d 1005 (Dist. Ct. Suffolk Co. 1981); Lovett v. Frederick Loeser & Co., 207 N.Y.S.753 (Manhattan Mun. Ct. 1924); Schenectady Stove Co. v. Holbrook, 101 N.Y. 45 (1885); People v. Gimbel Bros., Inc., 115 N.Y.S.2d 857 (Manhattan Ct. Spec. Sess. 1952). The only general test is the inquiry whether the facts show that some performance was promised in positive terms in return for something requested. Lovett, 207 N.Y.S.2d at 755. However, a purchaser may not make a valid contract by mere acceptance of a "proposition." Schenectady Stove Co., 101 N.Y. at 48. Nor does the purchaser have the right to select an item which the seller does not have in stock or is not willing to sell at a reduced price. Lovett, 207 N.Y.S. at 757.

An offer to contract must be complete and definite in its material terms; a general advertisement that merely lists items for sale is at best an invitation to negotiate unless it promises to sell an item in return for something requested. In Schenectady Stove Co., for example, the plaintiff delivered to defendant a catalogue of prices containing a statement of terms of sale, but the catalogue did not state the amount of goods which plaintiff was willing to sell on those terms. Under these circumstances, the Court of Appeals held that no contract was ever made between the parties with respect to an order that defendant submitted because the plaintiff had not made an offer that was complete and definite in all material terms. Hence, it was not possible for the defendant to make a valid contract by mere acceptance of a "proposition." 101 N.Y. at 48. Similarly, in Lovett, a department store advertised that it would sell, deliver, and install certain "wellknown standard makes of radio receivers at 25 per cent. to 50 per cent. reduction" from advertised list prices. The plaintiff had demanded a particular model of radio that was not listed in the ad, and the defendant had declined to sell it at the reduced price. 207 N.Y.S. at 754. The court held that an advertisement by a department store was not an offer but an invitation to all persons that the advertiser was ready to receive offers for the goods upon the stated terms, reasoning that such a general advertisement was distinguishable from an offer of a reward or other payment in return for some requested performance. Id. at 755-56. The court further held that, even assuming the plaintiff's "acceptance" turned the offer into a contract, the purchaser did not have the right to select the item which the defendant did not have in stock or was not willing to sell at a reduced price. Id. at 756-57.

Loman's advertisement did not contain a promise to sell the leather coats in exchange for some requested act or promise. By its terms, the advertisement announced that it had a stock of coats to sell, and described the coats as a manufacturer's closeout selling at a substantially reduced price. Nor did the ad give the public an option to choose any comparably priced leather coat if the advertised coats were no longer available. As the court noted in Lovett, a prospective purchaser does not have the right to select items that the retailer does not have in stock or is not willing to sell at a reduced price. Lovett, 207 N.Y.S. at 757.

The claimant here might argue that the advertisement did not contain limiting language, for example, that the coats were for sale while supplies lasted . However, the ad indicated that the store, opening for business on the day of the sale at 7 a.m., was catering to early morning shoppers. By announcing that "the early bird catches the savings," the ad could fairly be read to mean that the supplies were not unlimited.

CONCLUSION

On these facts, the court will probably find that the claimant has failed to state a cause of action for breach of contract because the ad did not constitute an offer but merely an invitation to negotiate.