Question

Do you think there should be a duty to speak?

We come now to the second problematic area involving acceptance of the bilateral offer. And that is silence. Silence. An offer is made, and the offeree is simply silent.

The question is, is silence acceptance? Very simple. No. Silence is not acceptance unless, unless there is a duty to speak. So you understand by now that it's not so simple because the question becomes, when is there a duty to speak?

Ah. Let's play with this. So you come back after our little discussion here today. You go back to your apartment, and there, there is a mailbox, and in that mailbox every day, the mailman puts the mail.

And this particular day, you pull out this letter, and you look at it. You say, yeah, I don't know who these people are. But it says, we are offering you a backpack. And this is a perfect-- put your Apple Computer in. It's just got all of the things.

It's got your cell phone. It's such a great backpack. And then, it goes on to say that we are offering it to you at this amazing introductory price of 49.95 plus shipping and handling, and that if you do not respond to us within seven days, we will assume that you want one of these for your very own.

So you take this, along with a lot of other stuff you get today, and you crumple it up into little pieces, and you throw it into the circular file. And that's the end of it, until next week, you find there's a package at your door. It's a bag. It's the backpack, with a bill.

Are you obligated to pay for it? Have you made a contract? Was your silence acceptance? Did you-- lots of questions-- have the duty to speak? What do you think?

No.

No? It said that we're going to consider your silence acceptance.

But I still didn't accept. I didn't ask for this backpack to be sent to me.

Yeah, I understand.

How am I supposed to know--

Well, it's true.

--I was getting an offer?

We know from our experience that legally, if they simply send you a backpack out of the blue, that at one time, there might have been some question about whether your bringing the backpack into your apartment out of the rain is acceptance.

But that's been dealt with by postal statutes. Today, if you get something unsolicited, it is a gift. Just, it's yours. But that's not what happened here. They made an offer to you. They told you that your silence was acceptance, that you had the duty to speak and you didn't speak. Can they do that?

No, they shouldn't be able to do that.

They shouldn't be able to do that. Let me ask a very personal question, Amber. Let's talk about your mailbox. How big is your mailbox?

About this big.

That big. If they could impose upon you the duty to speak, how big would your mailbox have to be?

Bigger than this room.

Bigger than this room. You'd spent all of your waking hours responding to this imposition of the duty to speak. So thank goodness you're right, clearly. All right. Let's play with something else now. Let's see.

Quentin, you're the kind of guy, at the end of the day, who might like to enjoy maybe a glass of wine, a very cultured wine lover. Now, you get this thing that you see in a magazine that says, there is a wine-of-the-month club. We have these five wines, very nice wines. Here's the description of what they are.

And if you will pay $10, we will give you these five wines. We will deliver them to you and, with an understanding that each month, we will come up with a wine of the month. And you're not under the obligation to buy it.

But if you do not tell us otherwise, we will deliver to you that wine of the month, and we will bill you based upon the price of that particular wine. OK. So you what? You give them the 10 bucks. You get your five wines. You're having a grand time with the wines. Everything's great.

And then next month, you get this Cabernet, and you say, well. Before that, I should say, you get an email or you get a letter that says this month, it's going to be this particular Cabernet from Napa. And you don't say anything. In this case, did you have a duty to speak?

I did have a duty to speak because the original terms of the contract were that I had to speak if I did not want to receive the wine of the month.

OK. OK. So in this case, you're right. You made a contract. In exchange for the five bottles of wine, you gave two things. You gave $10. What else did you give? What else did you take on?

The acceptance of the bottle of the month, the wine of the month.

Yeah, the terms, and part of those terms were the duty to speak. So in your case, Amber, this was imposed upon you in exchange for nothing, unilaterally, as the offeree. But in your case, Quentin, you bargained for it. It was a prior contract that you actually made that obligated you to not buy the wine. You didn't have to buy the wine at all. But you had to speak.

We see these all the time. We see book-of-the-month clubs, CD-of-the-month clubs, Spotify. It just keeps going. You can cancel your premium service whenever you want, but you have to do something. They'll give you the free trial, but then, if you keep going-- I just did this-- three months on Spotify for $1.

Well, great. But if you don't cancel, then they start billing you. So you've got to be really careful. You've taken on the duty to speak. It was part and parcel of a prior contract.

OK. So you kind of got it. It's kind of simple. It seems black. No contract, no duty to speak. Contract, duty to speak. But wait. Let's try another scenario. This time, Quentin, instead of your being a wine lover, we're going to recharacterize you as farmer Quentin.

OK. Put on your farmer hat. You're out there. You're growing corn. OK. And you've been doing this for a while. You've got relatively simple tools. And I am a salesman for John Deere.

So I come out to you and I say, we've got this brand new revolutionary product. It's called a beater thrasher. It's going to help you harvest the corn. It is the greatest thing. It will make your job fabulous, much, much easier. It's $200,000, and I'm a great salesman because Quentin says, I got to have one of these.

So Quentin, you sign this agreement. Now, the agreement says contract. And it's got a lot of legal stuff. And at the bottom, there's a place for you to sign, and I sign as a salesman for the company, for John Deere, and you sign as the purchaser.

And it says, right above your signature, the very last provision says, this offer that you are making, Quentin, will not be accepted unless it is agreed to by the home office in writing, signed by an authorized representative of John Deere. OK?

You signed it. I signed it as the salesperson. And you sit back, wait for your beater thrasher. The corn is growing. It's getting higher and higher. When it gets, as they say, as high as an elephant's eye, it's time to harvest the corn. But there's no beater thrasher.

The harvest equipment's not here. So you call up the company, and the company says, oh, yes. We've got your order here, I guess. But there's been a price increase. It's not 200,000. It's 250,000. Now, Quentin says, I got a deal. I got a contract. What do you mean? You can't rip me off for an extra $50,000. I'm just a farmer.

So let's play with this. What arguments are going to be made by these two parties?

Well, I initially set forth with the understanding, I'm going to get a beater thrasher at the end of the day. I never heard back from the home office that they refuted the contract. So in my mind, I have a beater thrasher that's owed to me.

When you looked at this thing, did you think it was a contract?

Yes, absolutely. It said contract at the very top.

Yeah, looks like a contract. Smells like a co-- walks like a contract. Sure, sure, sure. So what do you think? Let's say you represent the company. What's the company's point of view here?

I would say it's not a contract, that it's an offer to the company to sell you this piece of equipment for $200,000. And they have to accept it because you are not an authorized signing party as a salesperson. So it has to be accepted by the company. And it wasn't. So therefore, no contract.

Therefore, no contract. But what have we been discussing? What we've been discussing here is silence. If the company is right, and I guess by the terms of the offer, which you never really-- but the terms of the language of the document you signed, which perhaps you didn't really read, you're presumed to have read it.

You're presumed to have understood it. You're presumed-- I don't know-- to understand something about contract law. Hell, you're just a farmer. Not that we can't have very erudite farmers who are up on all of the ins and outs of this stuff. But let's say you're not.

You didn't even read this piece. And you assumed you're going to get this piece of equipment for $200,000. But the argument here is, this is only an offer. And in response to this offer, as Amber just explained, there is merely silence.

So the question here is, is silence acceptance? Well, we know the answer to that. That's easy. No. Silence is not acceptance, unless there's a duty to speak. Is there a duty to speak?

There is a duty to speak for the company to let me know whether or not they've accepted my offer.

Well, you didn't hear anything. Isn't it your duty to check with them and find out whether they're accepting it or not? You understood there was this provision, or you should have understood there was this provision. I don't know.

Why don't you guys think about this. Do you think there should be a duty to speak? Because if there is, the silence was acceptance. Think about it.