Failure to Initial Changes to Offer to Purchase; No Contract

In LV204, LLC v Gatmaitan, an unpublished Michigan Court of Appeals Opinion, a buyer made an offer to purchase property reputed to be the Fisher family’s summer home.  The seller made come changes to the offer; a provision required the Buyer to initial each change and sign the counteroffer.  The buyer signed the document, but did not initial any of the changes.  The parties continued to correspond for two years, with the buyer adding additional requirements.  Finally, the buyer sued.  The trial court dismissed the case finding that, because the buyer never initialed the changes, there was no contract formed.

This case highlights an important point of contract law:  when a contract provides a specific method of acceptance, no contract is formed unless the acceptance is unambiguous and in strict conformance with the offer.  Only if an offer (or counteroffer) does not contain a specific form of acceptance can acceptance be inferred from conduct.  Signing alone was not sufficient; the counteroffer also required he initial each change.  Failure to do so was fatal to his claim that a contract was formed.

© Steve Sowell 2017