Contracts I, Pages 237–245

Lucy v. Zehmer

Supreme Court of Appeals of Virginia, 1954

Facts:

Defendant allegedly sold 471.6 acres known as the Ferguson farm to plaintiff for $50,000. Plaintiff and defendant had known each other for fifteen or twenty years, and plaintiff had offered to buy the farm several times before this incident. On the night in question, plaintiff went to defendant's restaurant and "bet [that defendant] wouldn't take $50,000.00 for [the farm]." Defendant said he would, but said plaintiff didn't have the money. Plaintiff said he did, causing defendant write a note on the back of a restaurant check that said, "I do hereby agree to sell to W. O. Lucy the Ferguson Farm for $50,000 complete." Plaintiff suggested that defendant's wife would have to sign it it too, prompting defendant to rip it up and write, "We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory to buyer." Defendant signed this one and had his wife sign it after assuring her that he "was just needling him [Lucy], and didn't mean a thing in the world, that [he] was not selling the farm." She then signed and defendant brought it to plaintiff. Plaintiff grabbed it and put it in his pocket. Plaintiff offered defendant $5, which defendant refused. Plaintiff says defendant said that he didn't need money as plaintiff had the signed agreement. Defendant, his wife, and a waitress at his restaurant said he plainly told plaintiff he was not going to sell the farm.

Plaintiff and defendant discussed the agreement for 30 or 40 minutes, during which defendant doubted plaintiff could raise the money, plaintiff suggested the provision for having the title examined, and defendant suggested he would sell it "complete, everything there," saying that all he had there was three heifers. Plaintiff then brought in a bottle of whiskey and drank some with defendant. Plaintiff did not think either was intoxicated, but defendant and his waitress thought both were.

The next day plaintiff called his brother and offered him half interest in the farm for half the consideration. He then hired an attorney to examine the title. Plaintiff then wrote defendant stating that it was satisfactory and that he was ready to pay. Defendant replied, asserting that he never agreed or intended to sell, but plaintiff left the restaurant insisting that he had purchased the farm.

Procedural History:

Trial court held that the complainants had failed to establish their right to specific performance and dismissed their bill.

Issue:

Is an otherwise serious contract valid if the defendant was joking unbeknownst to the plaintiff?

Defendant's Argument:

Defendant selling the farm was merely a big joke, not a serious transaction.

Rule:

The mental assent of the parties is not requisite for the formation of a contract.

Reasoning:

Defendant did not show himself to be too drunk to make the agreement. The extensive negotiation is persuasive evidence that the contract was a serious business transaction, not just a casual, jesting matter as the defendants suggest. Plaintiff's actions like having the title examined and discussing it with others show that he thought the agreement was serious, which the circumstances justify. Defendant's actions showed him being serious about the sale despite what he may have privately thought. At no time prior to the execution of the contract had defendant indicated that he was not earnest.

Holding:

No, it must have been outwardly indicated that the defendant was not serious prior to the acceptance of the offer. Reversed and remanded.

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