Question: In July 1985 Congress passed the Statue of Liberty Ellis

In July 1985, Congress passed the Statue of Liberty- Ellis Island Commemorative Coin Act. The Act instructed the Secretary of the Treasury to mint and sell a stated number of coins. In November and December 1985, the U.S. Mint mailed advertising materials about the coins to people whose names were included on a list of previous customers/coin collectors. These materials described the various coins the issuance of which was authorized by the Act, and encouraged potential purchasers to forward early payment for commemorative coins. Payment could be made either by check, money order, or credit card. The Mint had not previously dealt with credit card sales and the processing of credit card orders. Directly above the space provided on this form for the customer's signature on the order form was the following: VERY IMPORTANT-PLEASE READ: YES, Please accept my order for the U.S. Liberty Coins I have indicated. I understand that all sales are final and not subject to refund. Verification of my order will be made by the Department of the Treasury, U.S. Mint. . . . If my order is received by December 31, 1985, I will be entitled to purchase the coins at the Pre-Issue Discount price shown. I have read, understand and agree to the above. . . .Please allow 6 to 8 weeks for delivery after issue date of January 1, 1986. The U.S. Mint reserves the right to limit quantities shipped, subject to availability. Mint may discontinue accepting orders should bullion prices increase significantly. Credit card orders will be billed upon receipt by the U.S. Mint. In November 1985, Mrs. Mesaros sent an order to the Mint for certain Statue of Liberty coins. She provided information about her husband's credit card, reflecting that $1,675 should be charged to Mr. Mesaros's credit card account. Later in November, Mr. Mesaros sent additional orders for another 18 gold coins to the Mint. These orders were placed in the names of members of the Mesaros family, and were paid for with nine separate checks. Demand for the coins far exceeded the Mint's expectations, and there were not enough five-dollar gold coins to fill all the orders of those who had responded to the Mint's promotional materials. The last order for gold coins that was filled was accepted sometime between December 31, 1985, and January 6, 1986. This exhausted the supply of the 500,000 gold coins that were authorized by the Act. These gold coins increased in value by approximately 200 percent within the first few months of 1986. In February 1986, the Mesaroses were informed by a form letter that the Mint "had tried but was unable" to process the Mesaroses' November credit card order. The Mesaroses did receive the 18 coins that had been paid for by checks. Investigation revealed that the Mesaroses' bank had given authorization to the Mellon Bank (responsible for processing credit card orders for the Mint) with respect to the coin order charged to Mr. Mesaros's account. However, the Mint and the Mellon Bank were swamped with a deluge of 756,000 orders, of which 186,000 were credit card orders.
Cash orders were filled fairly promptly by the Mint, but credit card orders before being filled had to be sent by the Mint to the Mellon Bank in Pittsburgh for verification, investigation, and determination of validity, which was a slow process. Credit card orders, when approved by the Mellon Bank were certified as valid and returned to the Mint to be filled. Before all of the 186,000 credit card orders could be verified by the Mellon Bank and thereafter filled by the Mint, all of the gold coins had been sold by the Mint in filling cash orders, and no more coins were available. As a result, 13,000 credit card orders could not be filled, and were rejected by the Mint. The Mesaros order was in this rejected group. The Mesaroses brought suit against the government for breach of contract. They claimed that the Mint's promotional material and order form was an offer. Are they correct?

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  • CreatedJuly 16, 2014
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