Jim Whitney

/ Economics 495

Case summary brief (2-page maximum)

Recorder name: / Mary Bemis
Case name: / Minneapolis and St. Louis Railway v. Columbus Rolling Mill
Citation; Date: / 119 U.S. 149; Argued 11/12/1886 Decided 11/29/1886
Court: / Supreme Court of the United States
Name (if specified) and description of litigants at the original trial court level
Plaintiff: / Minneapolis and St. Louis Railway
Defendant: / Columbus Rolling Mill
Facts of the case:
Minneapolis railway company extended an offer towards Columbus Rolling Mill, a manufacturing company in Ohio, requesting 500-3000 tons of 50 lb. steel rails and and for 2000-5000 tons of 50 lb. iron rails. The defendant replied that they do not make steel rails and would sell the plaintiff the iron rails for $54/gross ton. The plaintiff, instead of accepting the offer, changed the request to 12000 rails in which the defendant responded that they could not complete that request. Hearing this, the plaintiff changed the order back to 2000 tons, in which the defendant never confirmed or responded.
Procedural history (remedy sought, prior rulings, grounds for appeal, etc., as available):
Justice Gray delivered the opinion of the court dismissing the case for an absence of a cause of action.
Court opinion (key issues and arguments):
The court ruled in favor of the defendant finding that there failed to exist an enforceable contract between the two parties because “The other party, having once rejected the offer, cannot afterwards revive it by tendering an acceptance of it.”
Dissenting opinion, if any (key issues and arguments):
None
Disposition of case:
Action denied

ANALYSIS OF THE CASE

1. Course topic of the case: / Contract Law-making of contracts
2. How does the case relate to the course topic?
“illustrates that contracts require ‘offer’ and ‘acceptance’ and a counter offer requires a rejection and a cancelation of the original favor”
3. Which previously assigned cases, if any, are related to this case, and how does this one differ?
None, this is the first case of the topic of contract law
4. How does the case affect economic incentives and efficiency?
Contracts are necessary because some transactions take time to complete and within that time it is possible that factors such as price or supply change, so it is necessary to plan out terms ex ante in order to prevent rent-seeking.