Our next case comes from the Supreme Court of Minnesota in 1957 and deals with the role of advertising in forming a contract. On Friday, April 6, 1956, the Great Minneapolis Surplus Store published an advertisement in the newspaper very much like the one you see here. It advertised Saturday, 9:00 AM sharp, three brand new fur coats worth $1,000. First come first served, one dollar each. The very next day, Morris Lefkowitz went to the store, was the first to present himself at the appropriate counter, asked for the coat and indicated his readiness to pay the sales price of one dollar. But the store refused to sell it to him, telling him that they had a house rule that the advertise offer applied only to women. The following week on Friday the 13th, the Great Minneapolis Surplus Store again placed an ad in the newspaper. This time, advertising scarves and stoles. In particular, they advertised one black lapin stole, beautiful, worth $139.50. One dollar, first come, first served. Mr. Lefkowitz again went to the store, again was the first to ask for the stall, but they once again told him that they would not sell it to him, and that he already knew the house rule. Lefkowitz then proceeded to sue the store for the value of the furs they refused to sell him. The court in this case faced the question of whether there was a contract at all. Lefkowitz argued that the advertisements constituted offers, which he had then accepted by showing up at the Great Minneapolis Surplus Store at the appointed time, and ready to pay a dollar. The store, on the other hand, argued that the ads were just invitations for an offer and not offers themselves. The store's argument is equivalent to saying that the ads were soliciting offers from prospective customers. Justice Murphy had to decide whether the advertisements in this case were offers that become binding contracts when Lefkowitz accepted them. There are three different ways we can view advertisements. First, they could be as Lefkowitz argues, simply offers. Once they are accepted, they become binding contracts. Second, they might instead be just notices that the seller plans to make offers at a particular time and place in the future. Where third, they might be solicitations, notices that the seller would like to receive offers from interested buyers. In general, advertisements nowadays are usually interpreted belong to categories two and three. Category one is rather exceptional. The court lays out a rule for when advertisements constitute an offer, saying that where the offer is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract. That is if an ad specifies the exact exchange, the terms that will take place and exactly what the buyer must do in order to take advantage of it, the ad is an offer and the buyer can enforce once he or she has accepted it. Take notice something odd about this rule. It seems to be intended to encourage definite contracting, presumably to protect consumers from unscrupulous businesses. But what would you do if you owned a store and you read this opinion? You would make sure that all advertisements in the future were indefinite enough that no one could enforce them against you in court. Justice Murphy goes on to apply the rule to the two advertisements that Lefkowitz saw. He finds that the first advertisement for the coat was not an offer. Worth to $100 was not sufficiently definite with a coat being worth $50 or $60 be relevant would it have to be exactly $100. But the second advertisement, which exactly specified the value of the stole, was definite enough. And so, Lefkowitz was able to receive expectation damages, the $139.50 value of the stole minus one dollar he would had to pay for it. Notice that Murphy's rule has a perverse likely consequence. The reluctance of courts to enforce indefinite contracts seems to be intended to encourage both parties to take more care to resolve ambiguities in their drafting language. But Justice Murphy's being unwilling to give legal effects to indefinite offers might have the opposite effect. What would you do if you owned a store the week after you read this opinion? What kind of an ad would you place the next week? Well, you might make sure that all the advertisements you issued from here on out were indefinite enough by saying things like worth to x dollars, so that no one could enforce them against you in court. As for the house rule, Justice Murphy deals with it quite quickly. The restriction was not part of the original offer and quote, while an advertiser has the right at any time before acceptance to modify his offer, he does not have the right, after acceptance, to impose new or arbitrary conditions. Since the restriction to women wasn't part of the original newspaper ad, the store couldn't add it as an extra condition after Lefkowitz had successfully accepted the offer. Notice again how crucial timing is in this case. If the store manager had called out, we revoke the offer before Lefkowitz said anything. Or if a large sign on the outside of the store said, "We revoke our code offer," then Lefkowitz might have lost even with regard to the second ad. The court doesn't seem to care that Lefkowitz already knew about the house rule when he came to the store the second time. So, with regard to the house rule, there is a stronger case for not allowing Lefkowitz to accept the second offer. Perhaps, the court thought the store was engaging in deceptive bait, and switch marketing tactics, and wanted to find a way to penalize the store. Believe it or not, gender discrimination in contracting is actually legal in every state except California. Unlike race discrimination in contracting, which is prohibited under federal law, federal law prohibits gender discrimination in contracting only in a handful of specific markets such as employment and housing. California's Unruh Civil Rights Act does banned gender discrimination in contracting along with discrimination on the basis of a wide range of other characteristics. Several states have now also prohibited sex discrimination with regard to public accommodations, which increasingly encompasses a wide range of retail sales. Which of the following ads would Justice Murphy be most likely to consider an offer? Option D is the one that is most likely to be on offer because it specifies the exact value of the products on offer as well as how a buyer can accept by being among the first customers to arrive on the specified day. From this case, we have seen that advertisements are typically treated as solicitations for customers to make offers rather than as offers themselves. But some courts do treat advertisements as offers when they are clear, definite, and explicit, and leave nothing open for negotiation. In the court's view, the Great Minneapolis Surplus Store's second advertisement met these requirements.
