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Lucy v. Zehmer | 84 S.E.2d 516 (1954)

For an enforceable contract to arise, both parties must manifest an intention to be bound by the same terms. This is called mutual assent. Most commonly, mutual assent arises by offer and acceptance. One party offers to enter a contract upon definite terms, and the other party accepts, creating a binding contract. In Lucy versus Zehmer, the Virginia Supreme Court confronted a case where a party’s words and actions indicated assent, but in his mind, he thought quite the opposite.

Zehmer owned Ferguson Farm, a large parcel in Virginia. In the 1940s, a man named W. O. Lucy sought to buy the farm, but Zehmer refused to sell. In late December 1952, while drinking with Zehmer at a restaurant, Lucy again offered to buy the farm. This time, he offered $50,000. The two visibly intoxicated men discussed the transaction for forty minutes or more. Finally, due to Lucy’s prodding, Zehmer scribbled the following language on some scrap paper, quote:

“We hereby agree to sell to W. O. Lucy the Ferguson Farm complete for $50,000.00, title satisfactory to buyer,” unquote.

At Lucy’s insistence, Zehmer had used the pronoun we to reference himself and his wife Ida. Also at Lucy’s insistence, Zehmer had included the part about satisfactory title. Then, Zehmer signed the paper. Ida signed the paper, too, but only after Zehmer assured her, out of Lucy’s earshot, that he was joking about selling the farm. But before signing the paper, Zehmer hadn’t told his friend Lucy that he was joking.

The next day, Lucy offered his brother a onehalf interest in Ferguson Farm, in exchange for $25,000. The brother agreed. The day after that, Lucy hired a local attorney to conduct a title search on Ferguson Farm. Finding the results satisfactory, Lucy contacted Zehmer to proceed with the sale. Zehmer refused, insisting that the contract was a joke.

Lucy and his brother sued Zehmer and Ida in Virginia state court, seeking to compel the sale of Ferguson Farm, per the terms on the signed paper. In his defense, Zehmer argued that no binding contract existed, because he never subjectively intended to sell Ferguson Farm. Rather, he was just joking around, and the whole discussion was merely idle banter between two drunks.

The trial court found for Zehmer and dismissed the case. Lucy appealed directly to the Virginia Supreme Court.

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