Does a newspaper advertisement offering specific merchandise at a stated price on a first-come, first-served basis constitute a binding offer that the first customer to appear and tender the price may accept, such that the seller cannot refuse the sale based on an unadvertised "house rule"?

On April 6, 1956, Great Minneapolis Surplus Store, Inc. (defendant) published a newspaper advertisement offering "3 Brand New Fur Coats" worth up to $100.00 for $1 each on a "First Come First Served" basis, beginning Saturday at 9 A.M. sharp. On April 13, 1956, it published a second advertisement offering two pastel mink scarfs and "1 Black Lapin Stole," described as "worth $139.50," for $1.00 each, again on a "First Come First Served" basis.

On each of the following Saturdays, Morris Lefkowitz (plaintiff) was the first person to present himself at the appropriate counter and demanded the advertised item, indicating his readiness to pay the $1 sale price. On both occasions the defendant refused to sell to him. On the first occasion, the defendant stated that a "house rule" limited the offer to women and that sales would not be made to men. On the second occasion, the defendant stated that the plaintiff knew the defendant's house rules. The advertisements contained no restriction on the sex of purchasers.

Lefkowitz sued Great Minneapolis Surplus Store, Inc. in the Municipal Court of Minneapolis for breach of contract. The trial court found for Lefkowitz. It disallowed his claim for the fur coats because their value was speculative and uncertain. It awarded him judgment for the Lapin stole, whose value was established at $139.50, less the $1 purchase price, for total damages of $138.50. The defendant moved for amended findings of fact or, alternatively, a new trial, and the Municipal Court denied the motion. The defendant appealed to the Minnesota Supreme Court, which affirmed.

(Murphy, J.)

Yes. The advertisement for the Lapin stole was a binding offer, and the plaintiff's appearance and tender of the stated price was an acceptance that created a contract.

Some authorities treat advertisements as invitations to make an offer, but others hold that an advertisement may be an offer. Whether an advertisement is an offer depends on the legal intention of the parties and the surrounding circumstances. The test is whether the facts show that some performance was promised in positive terms in return for something requested. 1 Williston, Contracts (Rev. ed.) § 27. Where the advertisement is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, and acceptance completes the contract. See Johnson v. Capital City Ford Co., 85 So. (2d) 75 (La. App.).

The defendant's reliance on Craft v. Elder & Johnston Co., 38 N.E. (2d) 416, and similar cases is unpersuasive. Those cases treat advertisements as unilateral offers withdrawable at will. All offers are by nature unilateral, and an offer may be withdrawn only before acceptance. The question here is whether the advertisement was an offer and whether the plaintiff accepted it. The Lapin stole advertisement specified the item, the price, and the method of acceptance ("First Come First Served"), leaving nothing open for negotiation. The plaintiff, as the first person to appear and tender the price, accepted the offer and was entitled to performance.

The "house rule" does not defeat the contract. An advertiser may modify its offer at any time before acceptance. After acceptance, it cannot impose new or arbitrary conditions that were not contained in the published offer. Payne v. Lautz Bros. & Co., 166 N.Y.S. 844; Mooney v. Daily News Co., 116 Minn. 212, 133 N.W. 573 (1912). The advertisement contained no restriction to women. The sex-based limitation was therefore an impermissible post-acceptance condition. The trial court correctly found a sufficient mutuality of obligation, and the judgment is affirmed.