HOUSTON DAIRY, INC. V. JOHN HANCOCK MUTUAL LIFE INSURANCE CO.
643 F.2d 1185 (5th Cir. 1981)
NATURE OF THE CASE: This was a dispute about a good faith loan deposit. Houston (P), challenged an order, which found Hancock (D) had both waived a seven-day limitation and validly accepted P's counter offer and that the parties had entered into a binding contract and awarded D the $16,000 deposit as valid, liquidated damages for breach of the loan agreement.
FACTS: John Hancock (D) mailed a commitment letter to Houston Dairy (P) to lend it $800k if P would return the commitment letter with a written acceptance and enclose a letter of credit or a cashier's check for $16k within 7 days. The commitment letter stated that the $16k was a good faith deposit and the appropriate measure of liquidated damages in case of default by P. P complied with D's terms and but mailed the commitment and check 11 days after the expiration of the term provision. P then found it could obtain a loan for less at a state bank. P requested that its monies be refunded. At trial, it was determined that D had waived the seven-day limitation and that there was a contract. P appealed; the letter was a counteroffer that was never accepted by D.
ISSUE:
RULE OF LAW:
HOLDING AND
DECISION:
LEGAL ANALYSIS:
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