Embry v. Hargadine, McKittrick Dry Goods Co.

Facts

Embry worked for a wholesale dry goods company under a written contract that ran to December 15, 1903, at a salary of $2,000 per annum. He ran the sample department and chose samples for the traveling salesmen. Before the contract ended, he tried several times to get an understanding with McKittrick, the company's president, about another year. He was put off each time. On December 23, 1903, eight days after the contract expired, Embry went to McKittrick's office. By Embry's account, he said he must have a contract for another year or he would quit then and there. McKittrick asked how the department was doing. Embry said it was very busy getting salesmen out. Embry testified that McKittrick then told him to go ahead, that he was all right, and that he should get his men out and not let it worry him. Embry kept working. On February 15 he was told his services would end, and he was discharged on March 1, 1904, as a cost-cutting move. McKittrick denied that account. He said he was busy preparing for a stockholders' meeting, had no time to take the matter up, and told Embry to see him later and to go get his men out on the road.

Issues

1. Does a contract arise from the words and acts of the parties as a reasonable person would understand them, or must both parties actually intend to contract, so that the jury had to find that intent?
2. Was McKittrick's reply, as Embry told it, language a reasonable man could take as assent to re-employment for another year, and was that question for the court or the jury?

Holding

If the conversation happened as Embry told it and he understood he was re-employed, McKittrick's reply was an unambiguous assent that made a valid one-year contract. The court erred in making the contract depend on a finding that both parties intended to make one.