Yaros v. Trustees of University of Pennsylvania

742 A.2d 1118 (Pa. Super. Ct. 1999)

Pennsylvania Superior Court · 1999

• Lapse of offers
• Conversation rule
• Reasonable time for acceptance
• Rejection by conduct
• Offer duration

Facts

Dr. Nancy Yaros brought a negligence action against the Trustees of the University of Pennsylvania after she fell at one of its ice skating rinks. Trial began on January 26, 1998. On the first day, the University offered $750,000 to settle. Dr. Yaros’s attorney communicated that she would accept $1.5 million up until the time she testified; after testimony, she would not settle for any amount. No settlement resulted.

On January 29, 1998, after the conclusion of all testimony and during a ten-minute recess before closing arguments, the University’s attorney (Orlando) offered Dr. Yaros $750,000. At the end of the conversation, Orlando told her attorney (Haaz), “you’ve got to get back to me,” and looked at the clock while placing his palms sideward. No express time limit or event condition was communicated. Haaz said he would talk to his client. Both attorneys then left the courtroom — Haaz to find Dr. Yaros, Orlando to use the restroom.

Dr. Yaros was herself in the restroom. When she returned, Haaz did not confer with her, and closing arguments immediately commenced. During the University’s closing, Dr. Yaros authorized Haaz to accept. After rebuttal, at a sidebar, Haaz announced acceptance. Orlando replied, “I don’t know if it’s still there, judge.” The following day, before jury deliberations, Dr. Yaros moved to enforce the settlement. The trial judge denied the motion pending evidentiary hearings. The jury returned a defense verdict. After a hearing, a successor trial judge granted the motion to enforce. The University appealed.

Holding

The Pennsylvania Superior Court affirmed enforcement of the settlement agreement. The court held that the statement “get back to me” indicated a contrary intention sufficient to extend the offer beyond the end of the conversation, that acceptance approximately seventy minutes later was within a reasonable time under the circumstances, and that commencing closing arguments did not constitute a rejection of the offer.

Reasoning

The court addressed three arguments in turn.

On the conversation rule, the court applied the standard that an offer made face to face ordinarily lapses at the end of the conversation, but that a contrary intention may be shown by express words or circumstances. The phrase “get back to me” expressly invited a later response. It signaled that Haaz was expected to consult his client before answering. The offer therefore extended beyond the conversation, and the relevant question became how long it remained open.

On rejection, the court refused to create a per se rule that commencing closing arguments constitutes rejection. To do so would allow an offeror to unilaterally assert after acceptance that an unspecified trial event constituted rejection. The University’s own assumption — that Dr. Yaros had not yet been informed of the offer when closings began — made it impossible to argue that her participation in closings manifested a knowing rejection.

On reasonable time, the court acknowledged this is a question of fact. The University’s argument that seventy minutes was unreasonable rested on the same flawed premise that urgency was apparent from the circumstances. Since the court had already rejected the claim that the time limit was clear to the offeree, the seventy-minute interval was not unreasonable as a matter of law. The trial court’s factual finding was affirmed.

The court also turned the prior-course-of-dealings argument against the University. Dr. Yaros had previously imposed an explicit event condition on her own offer. When the University made its offer, it imposed none. That asymmetry supported the inference that no event condition attached.

Why it matters

Yaros teaches three things that the conversation rule alone does not.

First, the rule is a default, not an absolute. Students need to understand that the phrase “offer lapses at the end of the conversation” is the starting point of the analysis, not the ending point. Any contrary indication — including words as simple as “get back to me” — displaces the default.

Second, ambiguity in the offer’s duration resolves against the offeror. The offeror is the master of the offer and can set its terms precisely. When the University’s own attorney did not know whether the offer was still open, the court would not impute clarity to the offeree.

Third, no per se rule makes a specific trial event — closing arguments, testimony, a recess — into an automatic lapse or rejection. Context determines whether any particular event signals the end of the offer’s life.

Yaros v. Trs. of the Univ. of Pa., 742 A.2d 1118 (Pa. Super. Ct. 1999).