Immaterial is Still Material for Contract Formation Under Georgia's Mirror Image Rule

The Georgia Court of Appeals, in Pierce v. Banks, No. A23A0394, 2023 Ga. App. LEXIS 347 (Ga. Ct. App. June 28, 2023) has reaffirmed, at least for now, its strict adherence of the mirror image rule as it relates to contract formation in cases where an offer to form a unilateral contract for the settlement of a claim is at issue.

In Pierce, the Court of Appeals was faced with a time-limited demand that was declared rejected by the claimant’s attorney because the settlement check was delivered earlier than required by the demand, the payee on the check was improperly named because the payee did not include a comma contained in the payee name designation in the demand, and the settlement check included language not permitted by the demand which declared the check “void after 180 days”.

The Appellees asserted on appeal that they satisfied the material conditions of the claimant’s time-limited demand, and that the claimant was attempting to enforce immaterial and inconsequential details. The Appellees, unsuccessfully, argued that a contract was created when parties “agree on the material terms which define their rights and obligations” and that the parties need not “necessarily agree on non-material matters for a contract to form.”

However, when assessing the claims made by both sides, the Court of Appeals held that the contract opportunity presented through the time limited demand was that for formation of a unilateral contract, i.e., a contract formed through acts versus simple communication. Because the contract offered was a unilateral contract, the acceptance was required to be identical to that called for by the offer, without any variance whatsoever. In so holding, the Court of Appeals rejected the appellee’s contention that the failure to perform immaterial terms did not prevent a contract from being formed.

With these principles setting the stage, the Court of Appeals concluded that the failure to deliver a settlement day on the exact day requested by the demand letter was an imperfect performance that prevented a settlement agreement from being formed. Additionally, the Court of Appeals concluded that the inclusion of the “void after 180 days” language on the settlement check was an expiration clearly prohibited by the demand which prevented the formation of a contract. 

While time-limited demands are often not straightforward, the law surrounding the application of a mirror image acceptance is. There is no differentiation between “material” and “non-material” terms. Determining what acts are required to accept a complex time-limited demand are therefore, paramount to ensuring a mirror image acceptance.