the company. He decided that for the current year he would purchase the company’s apple requirements
from another orchard.
Over the course of the summer, Ely heard rumours that an orchard some kilometres distant had
acquired a contract to supply his variety of apple to the company, but he did nothing to investigate the
matter further. In the fall of that year, he delivered his usual supply in large pallet boxes to the company
and placed them in the storage yard. No employees were in the yard at the time, but Ely did not find the
fact unusual, as that was typically the case when he made his deliveries in the past. He was not concerned
about identification of the crop as each pallet box bore his name and address as well as the variety and
The yard foreman noticed the apples in the supply yard some time later on the day of delivery, and
informed the plant manager. The plant manager did nothing about the apples until the next day, when he
informed the company president. The company president decided to write a letter to Ely requesting him to
take back his apples, but it was Friday, so he left the letter until Monday of the next week. Ely received
the letter on the Wednesday, some six days after delivery of the fruit to the company.
During the six-day period the apples had remained in the hot sun and had deteriorated from the
exposure. Ely refused to take back the apples, and the company refused to pay for them.
Advise the parties of their rights in this case, and determine the probable outcome if Ely should bring an
action against the company for the value of the goods.
This case involves the effect of a long-standing practice on the contractual rights of the parties. Does the
practice established by the parties over the years constitute a standing offer
which requires withdrawal by the
offeror in order to be terminated? The conduct
of the parties in the case would obviously be important. The
facts may be considered to raise two separate areas for discussion: (1) the "standing offer," and (2) the
conduct of the Plant Manager and Company President, when they discovered that the apples had been
delivered. If the delivery constituted an offer to sell on the implied
condition that if the Company did not wish
to accept the goods they should return them promptly - did the action of placing the apples in a position
where they would deteriorate expose the Company to liability for the loss? Did the delay in reaching Ely
extinguish the Company's right to reject the goods? These matters should be discussed in class.
practice of the parties (for some twenty years) may have created a situation where the courts might infer a
standing offer, and an obligation on the Company to revoke the offer before acceptance by Ely, or in the
alternative, an obligation on the Company to promptly return the goods before they deteriorated. Should a
standing offer be determined, then a failure to revoke the offer before acceptance would mean that the