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James and Barbra Smith were negotiating to buy a house. Their offer was for $180,000. On June 6th The Smiths received a counteroffer from the seller containing different terms and conditions with no mention of the price. The seller said if they wished to accept the counteroffer they should sign it and return it immediately. The Smiths signed the counteroffer and on June 6 at 11 AM Barbra Smith handed the sealed envelope to her company's mail clerk with instructions to mail it. The clerk mailed it but not until 9 AM on June 8th. Meanwhile, at noon on June 7th the seller told Barbra Smith that the counteroffer was revoked because the seller was going to raise the price. The Smiths sued the seller, claiming that they had accepted the counteroffer before it was revoked. Barbra Smith argued that she put the acceptance in the "course of transmission" when she gave it to her clerk. The seller contended that no contract had been formed because the acceptance had been received after the revocation. How should the court rule?
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