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Facts

Defendant A. H. Zehmer and his wife Ida S. Zehmer owned a tract of land consisting of 471.6 acres (1.908 km ) in Dinwiddie County, Virginia known as the Ferguson Farm. Plaintiff W. O. Lucy had known Zehmer for many years and had previously expressed interest in purchasing the farm. Some years prior to this case, Zehmer had agreed verbally to sell the farm to Lucy, but later reconsidered and declined to complete the sale. On December 20, 1952, Lucy entered the restaurant owned by Zehmer with a bottle of whiskey in his hand. He and Zehmer consumed a significant quantity ofdistilled spirits and discussed the possible sale of the farm. Zehmer wrote a note stating simply "We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory tobuyer". The note was signed by Zehmer and his wife. Zehmer later alleged that his wife had initially balked at his request that she sign the instrument, but she relented when Zehmer assured her that his intent to sell the farm was merely in jest. The next day, Lucy spoke to his brother, J.C. Lucy, about the purchase, and hired an attorney to examine the title. After the attorney assured Lucy that the title was clear, Lucy wrote a letter to Zehmer asking when he intended to close the deal. In his reply, Zehmer insisted that he had never intended to sell the farm and that the note signed by him and his wife was written in jest, consistent with the jovial atmosphere and drunken camaraderie the parties were sharing that evening. Zehmer claimed on the witness stand that the circumstances were such that Lucy should have known he was too inebriated to agree to the sale. Depositions were taken and the decree appealed from was entered holding that the complainants had failed to establish their right to specific performance, and dismissing their bill. One evening in December 1952 after several drinks, Zehmer (D) wrote a contract on a restaurant bill in which he agreed to sell his farm to Lucy (P) for $50,000. Zehmer later insisted that he had been intoxicated and thought the matter was a joke, not realizing that Lucy had been serious. Lucy claimed that he was not intoxicated and believed that Zehmer was also sober. Zehmer testified that he was already high as a Georgia pine when he began drinking with Lucy. He claimed that he was merely bluffing to try to get Lucy to admit that he did not actually have $50,000. Lucy brought suit for specific performance when Zehmer refused to complete the transaction. The trial court ruled for Zehmer holding that Lucy had not established a right to specific performance.
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Issue
In determining whether a party has made a valid offer, how does the court determine whether the party had the intent to contract?

Holding and Rule


In determining whether a party has made a valid offer, the words and actions of the party are 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 partys words and actions constituted an offer. In this case Zehmers acts and words could be reasonably interpreted by Lucy 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 Zehmer and his wife signed the agreement.

Disposition
Judgment for Zehmer reversed and remande

Decision

Judge Buchanan, who had served on the Supreme Court of Virginia since 1946,[1] wrote for the majority and held that the record suggested that Zehmer was not intoxicated to the point of being unable to comprehend the nature and consequences of the instrument he executed, and that the circumstances surrounding the transaction were such that Lucy was justified in believing that it was a serious business transaction, rather than a mere jest. On this latter point, Buchanan quoted from the Restatement (First) of Contracts: The mental assent of the parties is not requisite for the formation of a contract. 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. Buchanan further held that specific performance was the proper remedy for the plaintiff. [edit]

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