Defendant wrote a contract on a restaurant bill in which he agreed to sell his farm to Plaintiff for $50,000 while they were drinking at the restaurant. Defendant later claimed that he had been intoxicated and thought the matter was a joke and that he had no idea that Plaintiff was serious. Plaintiff, on the other hand, argued that he was not intoxicated and believed that Defendant was also sober. Defendant testified that he was already “high as a Georgia pine” when he began drinking with Plaintiff. He claimed that he was merely bluffing to try to get Plaintiff to admit that he did not actually have $50,000.
Plaintiff brought a lawsuit for specific performance when Defendant refused to complete the transaction. The trial court ruled for Defendant holding that Plaintiff had not established a right to specific performance.
The Supreme Court of Virginia addressed following issue: in determining whether a party has made a valid offer, how does the court determine whether the party had the intent to contract?
The Court ruled that, in determining whether a party has made a valid offer, the words and actions of that party are to be interpreted according to a reasonable person standard. If the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party.
The court looks to the objective, outward expression of a person and not to their secret and unexpressed subjective intent. The test is whether a reasonable person would conclude that the party’s words and actions constituted an offer.
In the instant case, Defendant’s actions and words could have been reasonably interpreted by Plaintiff as an offer to sell his farm. The parties discussed the matter for over forty minutes, addressed the issue of examination of title, and both Defendant and his wife signed the agreement.
Accordingly, the Court reversed and remanded.