that defendants shipped a car of chestnut coal to the plaintiffs on August 26 at the new rate, i.e., $ 9.60 per ton.
August 29 plaintiffs acknowledged receipt of the new price quotations, ordered 8 cars of stove coal, 8 nut, 4 pea, for September and insisted all shipments be made at July 1st prices.
When plaintiffs refused to pay the new price defendants re-billed them at the old rate and stopped making shipments.
On September 26, 1947, the parties met and failed to adjust their differences. Plaintiffs thereafter sought damages for defendants' failure to ship the 10,000 tons.
We find as a fact that apart and distinct from the preliminary remarks made by plaintiffs in their letter of July 3, there was an offer made to defendants to purchase 20 cars of coal. Similarly as to the August and September orders.
Whatever plaintiffs' intent may have been as to making an offer to purchase 10,000 tons of coal in the letter of July 3 and subsequent correspondence, the offer was not accepted by the defendants. Defendants' silence and other conduct was not sufficient to indicate acceptance of plaintiffs' offer to purchase 10,000 tons of coal.
When defendants proceeded to fill plaintiffs' July order they were precluded from doing so by the order to stop shipments.
The shipment of August 26th was made by defendants, relying upon the representations of Mr. Sleppy.
Defendants had a right to refuse to accept plaintiffs' orders for August and September, and to refuse to accept plaintiffs' offer to purchase 10,000 tons of coal. There being no overall contract there could be no breach thereof, and therefore no damages.
'Whether the parties are merely negotiating a contract, or entering into a present contract, is purely a question of intention.' Windsor Mfg. Co. v. Makransky & Sons, 322 Pa. 466 at 472, 186 A. 84, 86, 105 A.L.R. 1096.
'It is a fundamental and well recognized rule that in construing contracts, courts must look not only to the specific language employed, but also to the subject matter contracted about, the relationship of the parties, the circumstances surrounding the transaction, or in other words place themselves in the same position the parties occupied when the contract was entered into, and view the terms and intent of the agreement in the same light in which the parties did when the same was formulated and accepted.' Miller v. Miller, 10 Cir., 134 F.2d 583, 588.
'That an offer is distinguished from preliminary negotiations is a fact well recognized in the law of contracts. Williston on Contracts (Revised Ed.) vol. 1, Sec. 27, makes this statement: 'Frequently negotiations for a contract are begun between parties by general expressions of willingness to enter into a bargain upon stated terms and yet the natural construction of the words and conduct of the parties is rather that they are inviting offers, or suggesting the terms of a possible future bargain, than making positive offers. * * * Language that at first sight may seem an offer may be found merely preliminary in its character.' Section 25 of the Restatement of the Law of Contracts, reads as follows: 'If from a promise, or manifestation of intention, or from the circumstances existing at the time the person to whom the promise or manifestation is addressed knows or has reason to know that the person making it does not intend it as an expression of his fixed purpose until he has given a further expression of assent, he has not made an offer." Upsal St. Realty Co. v. Rubin, 326 Pa. 327, 329, 192 A. 481, 482; and see comment a to Sec. 25, Restatement of the Law of Contracts: 'It is often difficult to draw an exact line between offers and negotiations preliminary thereto. It is common for one who wishes to make a bargain to try to induce the other party to the intended transaction to make the definite offer, he himself suggesting with more or less definiteness the nature of the contract he is willing to enter into. Besides any direct language indicating an intent to defer the formation of a contract, the definiteness or indefiniteness of the words used in opening the negotiation must be considered, as well as the usages of business, and indeed all accompanying circumstances.' And cf. Illustrations 1 and 2, e.g. '2 * * * The word 'quote' and the incompleteness of the terms indicate that the writer is simply naming a current price which he is demanding.' See Vitro Mfg. Co. v. Standard Chemical Co., 291 Pa. 85, 139 A. 615; Edgecomb v. Clough, 275 Pa. 90 at page 103, 118 A. 610; Rissmiller v. Evangelical Lutheran Congregation, 268 Pa. 41, 110 A. 740; Brown v. Finney, 53 Pa. 373, 378 (a coal case).
While an offer may be accepted by conduct ( Gum, Inc., v. Felton, 341 Pa. 96 at page 102, 17 A.2d 386) to be a contract an offer must be accepted. An offeree has a right to make no reply to offers, and his silence and inaction cannot be construed as an assent to the offer. Baum's Estate, 274 Pa. 283, 117 A. 684; Restatement of Contracts, Secs. 55, 72; 1 Williston on Contracts, Rev. Ed. Sec. 91 et seq.
Plaintiffs' letter being contrary to and beyond the prior understanding, defendants' silence had no effect since they obviously declined to recognize any overall offer but construed it as an offer to purchase 20 cars of coal, which they proceeded to accept by making delivery.
'While it must be conceded that circumstances may exist which will impose a contractual obligation by mere silence, yet it must be admitted that such circumstances are exceptional in their character, and of extremely rare occurrence * * * it is difficult to understand how a legal liability can arise out of the mere silence of the party sought to be affected, unless he was subject to a duty of speech, which was neglected, to the harm of the other party. If there was no duty of speech, there could be no harmful omission arising from mere silence.' Royal Ins. Co. v. Beatty, 119 Pa. 6, 9, 12 A. 607, 4 Am.St.Rep. 622; see also Berg Co. v. Thomas & Son Co., 256 Pa. 584, 100 A. 951; Kennedy-Stroh Corp. v. Davis, 72 Pa.Super 381; and see 46 Am.Jur.Sales, § 50, p. 240.
'If either party knowns that the other does not intend what his words or other acts express, this knowledge prevents such words or other acts from being operative as an offer or an acceptance.' Restatement of the Law of Contracts, Sec. 71(c), and see comment a.
We accept the law as to implied contracts suggested by plaintiffs as outlined in Cameron v. Eynon, 332 Pa. 529 at page 532, 3 A.2d 423; Lion Yarn Co. v. Flock, 154 Pa.Super. 528 at page 534, 36 A.2d 246; and see Restatement of the Law of Contracts, Sec. 52, comment a, and Sec. 45, and 46 Am.Jur.Sales, § 49, p. 239; but there was no implied contract here.
Where a question of whether a contract is divisible or entire arises, it is the intention of the party that controls and not the divisibility of the subject. Shinn v. Bodine, 60 Pa. 182. This intention is to be collected from the words employed where the intention can be clearly derived therefrom. Producers' Coke Co. v. Hillman, 243 Pa. 313, 315, 90 A. 144; McKeefry v. United States Radiator Co., 31 Pa.Super. 263; West Republic Mining Co. v. Jones & Laughlins, 108 Pa. 55.
'The mere fact that a transaction is set forth in one document is not alone sufficient to require the result that there is a single entire contract and not several separate contracts.' 12 Am.Jur.Contracts, § 321, p. 876.
'No formula has been devised which furnishes a test for determining in all cases what contracts are severable and what are entire. The primary criterion for determining the question is the intention of the parties as determined by a fair construction of the terms and provisions of the contract itself, by the subject-matter to which it has reference, and by the circumstances of the particular transaction giving rise to the question.' 12 Am.Jur.Contracts, § 315, p. 870.
We adopt the above opinion as findings of fact and conclusions of law.
An order entering judgment for the defendants will be filed herewith.