Contract Law - Newman v. Schiff: An Offer of Blatant Nonsense

Abstract

INTRODUCTION|In Newman v. Schiff, the Eighth Circuit held that a bizarre statement made on a television interview show was a contractual offer but a rebroadcast of it on a news program was not. The importance of this novel case is found in its treatment of reward offers made on nationwide television. With this case, the Eighth Circuit established that a televised statement of "blatant nonsense" was nevertheless an offer to enter into a contract.|On February 7, 1983, tax rebel Irwin Schiff made a live appearance on CBS's Nightwatch, a nationally televised interview program. Schiff stated on the air that "[i]f anybody calls this show-I have the [Internal Revenue] code-and cites any section of this code that says an individual is required to file a tax return, I'll pay them $100,000."|John Newman, a St. Louis attorney, did not see this program, but saw a rebroadcast of Schiff's statement on a news show later in the day. Newman sent CBS a letter, which was subsequently forwarded to Schiff, citing various IRS sections supporting the fact that an individual is required to file a return. Newman stated that his letter "represented performance of the consideration requested..." and demanded $100,000.|Schiff responded that his offer was only made to the first person to produce a relevant code section and that Newman was not the first person. Schiff also informed Newman that the sections he had cited did not comply with the offer since they did not state that an individual is "required" to file a return. Newman then sued Schiff for breach of contract in the United States District Court for the Eastern District of Missouri...