Cengage Advantage Books: Law for Business 18th Edition by John Ashcroft ,Janet Ashcroft

Exercise 1

Martin Marietta Materials wanted to mine minerals from some land. Martin sent the landowner's attorney, Michael Antrim, a proposed lease that provided a 4 percent royalty on materials mined. Antrim contacted William Karns, an expert, for help in determining the proper royalty. Antrim and Karns had not agreed on a fee for Karns's services. With Karns's advice, Antrim negotiated and signed a contract paying a 6 to 6.5 percent royalty. Karns then sent a letter stating that his fee was one cent ($0.01) for every ton of materials extracted as long as extraction continued, with a minimum annual fee of $7,500. Over twenty years, this would amount to about $771,000. Antrim testified he had told Karns by phone the fee proposal had been rejected. Six months later, Antrim sent Karns a check for $25,000 that Karns did not cash. Four years later, in legal proceedings, Karns alleged his letter had constituted a binding contract because Antrim had not rejected it. Was Karns correct that his offer had been accepted? [ Mueller v. Kerns , 873 N.E.2d 652 (Ind. Ct. App.)]