Court: Supreme Court of Minnesota
Where Reported: 86 NW 2d 689 (Minn, 1957)
Legal Issue in Lefkowitz v Great Minneapolis Surplus Store
The legal issue in Lefkowitz v Great Minneapolis Surplus Store centred around whether a newspaper advertisement constituted an offer in a contract.
This involved determining if the advertisement’s specific terms created a binding contract upon acceptance by a customer, or if it was merely an invitation to negotiate.
Material Facts in Lefkowitz v Great Minneapolis Surplus Store
The defendant, Great Minneapolis Surplus Store, published two newspaper advertisements for the sale of fur products at drastically reduced prices, stating the items would be sold on a “first come first served” basis.
Lefkowitz, the plaintiff, was the first to arrive at the store on both occasions with the intention to purchase the advertised items.
Despite his readiness to comply with the terms, the store refused to sell the items to him, citing a “house rule” that limited the offer to women, a condition not specified in the advertisement.
Judgment in Lefkowitz v Great Minneapolis Surplus Store
The court ruled in favor of Lefkowitz, holding that the advertisement was an offer that formed a binding contract once Lefkowitz accepted it by being the first to arrive at the store and present the money.
The court awarded Lefkowitz $138.50 in damages for the breach of contract.
The Reason for the Decision in Lefkowitz v Great Minneapolis Surplus Store
The court’s decision was based on the interpretation of the advertisement as a unilateral offer that created a binding obligation once accepted – see Daulia Ltd v Four Millbank Nominees Ltd (1978).
It recognised that the specific and clear language of the advertisement, along with its terms of sale, constituted an offer rather than an invitation to negotiate.
The fact that Lefkowitz complied with the terms of the offer by being the first to arrive at the store and presenting the payment was seen as acceptance of the offer.
The “house rule” cited by the defendant was deemed irrelevant as it was not included in the advertisement and thus could not be imposed retroactively.
The court emphasised the principle of mutuality of obligation, meaning a performance had been promised in return for a performance that was requested, establishing a binding contract.
Legal Principles in Lefkowitz v Great Minneapolis Surplus Store
Lefkowitz v Great Minneapolis Surplus Store established a significant precedent in contract law, particularly regarding advertisements and their role in forming contracts.
It clarified that an advertisement could be considered a legally binding offer if it promises something in exchange for a clear, definite action and leaves nothing open for negotiation.
This case is a key example of how specific language in an advertisement can lead to the formation of a contract, shifting away from the general rule that advertisements are typically invitations to negotiate rather than offers
