Carver

Introduction

In this case a prospective purchaser of real property submitted a sealed bid which stated he would pay “$1,000 more than any other sealed bid.” Although such bids have been severely criticized, as we explain in greater detail below, the record here is not sufficient to determine whether the bid submitted in this case was fatally defective.

Factual and Procedural Background

A. The Bidding

The facts which give rise to the parties’ dispute are for the most part, undisputed. In early September 1988, Robert A. Teitsworth decided to sell four acres of improved property he owns in Rancho Santa Fe. Toward that end he listed the property with a real estate broker. The listed price was $795,000.

One day after listing the property, Teitsworth’s broker had two full-price offers. One offer was made by Leroy Carver III. The other offer was made by James E. Crowley and Marybeth Crowley. Faced with two interested buyers willing to pay his asking price, Teitsworth responded by delivering to Carver and the Crowleys identical documents entitled “Counter Offer.”

The “Counter Offers” were on forms published by amicus curiae, the California Association of Realtors (CAR). The…