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CASE FACTS
Appellant borrower returned appellee lender's loan commitment letter and good faith deposit
after the seven days appellant required when it offered the loan. Appellee then obtained a
better loan, and requested a refund of its deposit, which was refused. The district court ruled
that there was a binding contract between the parties and that the deposit represented valid,
liquidated damages forfeited by appellant when it breached the contract.
DISCUSSION
On appeal, the court held the expiration of the seven-day time period, terminated
appellee's offer.
Appellant's action in signing and returning the commitment letter subsequent to the
termination of the offer constituted a counter offer which appellee could have accepted
within a reasonable time.
Appellee's silence plus retention of appellant's money was not acceptance and
notification.
Nor was the depositing of the check sufficient to constitute acceptance of an offer when
appellant had no previous dealings or statements that would indicate appellant knew of
appellee's policy concerning offers it would not accept.
CONCLUSION
The judgment finding appellant borrower breached its contract to obtain a loan and forfeited
its good faith deposit was reversed. When appellant returned appellee's loan commitment
letter several days late, it was proposing a counter offer which appellee lender rejected.
Because appellant's policies were unknown to appellant, appellant was entitled to revoke its
counter offer and obtained a refund of its deposit.