Group Assignment

Report
BUSINESS LAW FUNDAMENTALS – LAW101

IB1401
GROUP 3
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Group Information
Subject: BUSINESS LAW FUNDAMENTALS (LAW101)
Class: IB1401
Lecturer: Nguyễn Duy Ly
Group number: 3
Group name: Picky
Members of Group:

Phạm Thị Thu Phương HS140536

Tạ Bích Loan HS140051

Vũ Ngọc Quỳnh Chi HS140600

Đồng Quang Long HS140027

Chu Đức Toàn HS140631

Assignment Information
Title: Estate of Helen Moffitt MUELLER, Appellant-Respondent, v.
William KARNS, Appellee-Claimant
Field: Offer and Acceptance
Case number: 29A02-0702-CV-196
Case date: September 17, 2007
Total word-count: 1380 words (Main body)

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Contents
A. LITERATURE REVIEW: ............................................................................ 4
B. BACKGROUND OF THE CASE ................................................................. 4
C. ISSUE AND FACT ......................................................................................... 5
D. OWN ANALYSIS / OPINION ...................................................................... 7
E. REFERENCE.................................................................................................. 8

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A. LITERATURE REVIEW: Offer and acceptance

A valid contract is created by agreement of the parties. Two essential

elements of a contract are: an offer, either expressed or implied; and an
acceptance, either expressed or implied.
The offer is the proposal to make a contract; the offeror is the person
who makes an offer and the offeree is the person to whom an offer is
made. An offer expresses the willingness of the offeror to enter into a
contractual agreement. The mutual agreement required for a contract is
composed of an offer and an acceptance. A valid offer include three
requirements: It must be defined; it must appear to be seriously intended;
it must be communicated to the offeree.
When an offer has been properly communicated to the party for whom it
is intended and that party or an authorized agent accepts, a binding
contract is formed. The offer then can no longer be revoked. Acceptance
is the assent to an offer that results in a contract. The acceptance must be
communicated to the offeror, but no particular procedure is required. The
acceptance may be made by words, oral or written, or by some act that
clearly shows an intention to accept.
Only in rare case does silence constitute an acceptance. Those instances
include:
1. When the offeree accepted the benefit of offered services with
reasonable opportunity to reject them; knowing compensation is
expected.
2. When the offeree has given the offeror reason to know assent might
be shown by silence and in remaining silence the offeree intends to accept
the offer.
3. When because of previous dealings it is reasonable for the offeree to
notify the offeror of non-acceptance.

B. BACKGROUND OF THE CASE

1. Court: Court of Appeals of Indiana
2. Plaintiff’s info: Estate of Helen Moffitt MUELLER
The attorney for the Conservatorship: Micheal Antrim
3. Defendant’s info: William KARNS – the consultant for the
Conservatorship
4. Short overview of the case:
Martin Marietta Materials wanted to mine minerals from some lands of
Estate of Helen Moffitt Mueller (Conservatorship). Martin sent the

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 landowner’s attorney, Michael Antrim, a proposed lease that provided
a 4 percent royalty on materials mined. Antrim contacted William
Karns, an expert, for help in determining the proper royalty. Karns then
sent a letter stating his fee was one cent per ton of materials extracted
as long as extraction continued, over twenty years, this would amount
to about $771,000. However, Antrim denied having accepted that offer.
Antrim sent Karns a check for $25000 after 6 months but Karns did not
cash. 4 years later, in legal proceedings Karns alleged his letter
constituted a binding contract because Antrim did not reject it. The
judgment of the trial court is reversed and remanded with instructions
to hold a hearing on the amount of compensation to which Karns is
entitled, with a minimum of $2500 and a maximum of $25,000.
Nevertheless, Antrim did not agreed with the judgement of trial court,
so he offered to be rejudged in the Court of Appeals.

C. ISSUE AND FACT

 We are on behalf of Michael Antrim, the attorney for the

Conservatorship of Helen Moffitt Mueller. In 1998, the
Conservatorship of Mueller (Conservatorship) entered into lease
negotiations with Martin Marietta Materials (Martin) for the mining of
sand, gravel, and other material on land owned by the
Conservatorship. Lease negotiations were handled by Michael Antrim,
the attorney for the Conservatorship.
 Sometime in 1998, Martin sent Antrim a proposed lease, which
provided for a 4% royalty to be paid to the Conservatorship.
 Sometime in or around October 1998, Antrim and Karns reviewed
Martin’s proposed lease, and both men made handwritten notations on
the draft.
 On December 15, 1998, a telephone call between Antrim and Karns
was recorded by Antrim. It stated that Karns wanted a scholarship
fund established in his wife’s name rather than payment to him.
 On May 27, 1999, the royalty negotiations concluded when Antrim
and Robert Furlong (Martin’s representative) agreed that the
Conservatorship would receive a 6% royalty, which would increase to
6.5% after ten years.
 On November 8, 1999, the co-conservators (Antrim) signed a
proposed draft of the lease: “final review and approval by consultant,
Bill Karns, satisfactory to the Co-Conservators in their sole

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 discretion.”, then sent to Furlong (1). Subsequently, the parties added
a force majeure clause to the lease, which was executed with an
effective date of January 1, 2000.
 Karns testified that “early on,” he told Antrim that he “didn't expect
anything” in the way of payment and that “it could be whatever
Antrim thought was reasonable․”
 Antrim testified that he continually asked Karns to keep track of the
time he spent working for the Conservatorship, but Karns did not and
cannot make a rough estimate of the amount of time he spent on the
job.
 After receiving the executed draft of the lease in November 1999 (1),
Karns sent a letter to the Conservatorship on December 16, 1999 (the
Letter), which states, in relevant part, as follows:
 My consulting fee for the Mueller property is one cent ($0.01)
per ton for all minerals, clay, and topsoil extracted and sold
from the Mueller farm. The term of this agreement will be for
twenty years starting January 1, 2000.
 If minerals are still extracted and sold after 20 years the same
rate per ton will prevail as long as minerals are extracted and
sold.
 The minimum annual fee will be $7500.00 per year.
 Upon my death the payments will be divided equally between
my children․
 Some time in the middle of January, 2000, within three weeks after
receiving the Letter, Antrim told Karns during a telephone call that the
fee proposal was rejected.
 July 31, 2001, Antrim sent Karns a letter stating, “Enclosed please
find a check made payable to you in the amount of $25,000 which
represents payment in full for all consultation services rendered to date
in regard to the Martin/Mueller Lease negotiations.”. Karns did not
cash the check.
 Karns had done nothing for the next 4 years. Then, on April 28, 2005,
Mueller died and on June 7, 2005, Karns filed a claim against her
Estate. Karns's claim states, in its entirety, that the Estate is indebted
to him with $37,000 (plus interest), which is consulting fee for lease
negotiations and annual payment was $7,500 per year.
 The trial court agreed that Karn’s letter on December 16, 1999
constitutes a binding contract because Antrim failed to successfully
reject Karns’s offer.

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D. OWN ANALYSIS / OPINION

In our opinion, the Letter sent by William Karns absolutely could not
constitute a binding contract because Micheal Antrim had successfully
rejected Karns’s offer by a telephone call on January, 2000.
1. Based on the theory of conditions for silence to constitute acceptance,
we have the following arguments:
 Condition 1 states that: “When the offeree accepted the benefit of
offered services with reasonable opportunity to reject them; knowing
compensation is expected.”. In this case, Antrim took the
opportunity to decline Karns through a telephone call because he
disagreed with Karns's consulting fee estimation.

 Condition 2 states that: “When the offeree has given the offeror
reason to know assent might be shown by silence and in remaining
silence the offeree intends to accept the offer.”.In this case, Antrim
has never intended to accept Karns’s offer because during the 3
weeks after receiving the letter, Antrim did not respond, then he
called to decline the offer. Although Karns is quite close to the
Mueller family and the Mueller’s property, this does not mean that
the attorney of Mueller (Micheal Antrim) must accept the terms in
Karns' letter.
2. The rejection via a call of Antrim must be accepted as a legal rejection
due to the following reasons:
 There was no requirement in the Letter of Karns for Antrim to
respond in writing, it only mentioned the consulting fee that Karns
suggested.

 In the Letter of Karns, there was no request for the exact time to
reply to it. Therefore, the fact that Antrim rejected the letter three
weeks after receiving the Letter was perfectly acceptable.

 We also wondering about the reason why after Antrim rejected

Karn’s letter via a telephone call, Karns took no further action until
the death of Mueller, Karns sued Antrim. We need reasonable
reasons for this action of William Karns.

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E. REFERENCE

1. Caselaw.findlaw.com, (1996). FindLaw for Legal Professionals. [online]

Available at: https://caselaw.findlaw.com/ [Accessed 15 March. 2020].

2. John D., Janet E. (1992). LAW for BUSINESS. 17th ed. United States:
CENGAGE Learning, pp. 57-63.