In the case of J.C. Durick Insurance v. Andrus, Durick notifies Andrus that he is required to insure the apartment building he owns for $48,000. Andrus responds by stating that he only wants to insure it for $24,000, the outstanding balance on the mortgage for the rental property. Andrus stated that if Durick could not sell him the type of policy he was requesting, he would seek coverage elsewhere. Despite Andrus’ statement, Durick went ahead and sent him a policy renewal offer for coverage at $48,000 noting it was in effect unless Andrus notified them otherwise.
Andrus did not respond to Durick and did not pay the premium for the insurance. Durick then went on to sue Andrus to recover payment for the policy.
The issue here is if all the elements of a contract were met in order for Durick to pursue recovery of payment for the insurance policy it had issued. Durick assumed that Andrus’ silence or lack of action was essentially acceptance of the policy renewal, the offer. Andrus’ argued his lack of action indicated non-acceptance of the offer.
Research into this case revealed that the lower court ruled in favor of Durick. Upon appeal, Andrus prevailed. The court found that the contract lacked a meeting of the minds. A key element in the case was Andrus’ silence. The court stated, “Silence gives consent only where there is a duty to speak, and the offeror of a contract cannot force an offeree to speak or be bound by his silence.” (vt.findacase.com)
In order for a contract to exist, the parties involved must have a meeting of the minds. Failure on either party’s behalf to accept the terms of the offer does not constitute a contract. In this particular case, there was no mutual assent. The consideration of the offer failed to meet the previously expressed wishes by Andrus. Durick’s insistence on producing the renewed policy for $48,000 failed to meet...