Vassar’s Mistaken Acceptance Letters

Six dozen applicants for admission to Vassar College were thrown a boomerang over the weekend, first receiving electronic letters of acceptance only to be followed an hour later by electronic messages of apology saying the first batch were erroneous. At least some of the disappointed hopefuls object that the college is in breach of contract. They say Vassar’s first letter was binding because the deal was described as binding early admissions decision. As a matter of law, this is not a winning argument; but as a matter of public and student relations, the college may wish to do more than send what appear to be mere mass form apologies.

Ordinarily, the school’s letter would not constitute the formation of a contract. Contracts for college matriculation are formed after students first file an application for admission, which has zero contractual significance. The first step in the process with contractual significance is the letter of admission schools send. This would be considered to be an offer of admission. It creates in the student the power to accept, by following stated procedures, such as submitting a deposit by a stated deadline and committing to matriculating.

But offers to form contracts may be revoked at any time until the offeree has accepted or, in limited circumstances when the offeror seeks action in return, begun the requested action in reliance. Accordingly, Vassar’s letters of acceptance had no legal effect unless and until the students accepted, which none of the recipients over the weekend had done. It does not matter that the context involved early admission decisions described as binding. The decisions are binding only once the offer has been made and accepted.

Even if the college’s letters were somehow seen to form a binding contract, another basic contract law doctrine comes into play: mistake. In most cases, excuse from contractual obligation on the basis of mistake is granted only when both parties are mistaken (mutual mistake) and then only when it is evident that some risk existed that the parties did not intend to exchange or allocate. Classic examples are mistakes about the attributes of an animal (such as whether a cow was a breeder or barren) or provenance of a coin or instrument (such as whether a dime was minted in 1916 at Denver or whether a violin was made by Stradivari or not).  [I analyzed those in the pending case about a Madoff Ponzi scheme account.]

But there is also a class of cases allowing rescission of a contract based merely on unilateral mistake–mistake by one side only. Excuse based on unilateral mistake requires that the mistake be made honestly not with any whiff of bad faith; involve a clerical matter rather than a matter of judgment; be reported to the other side promptly upon discovery; and not prejudice the other side as a result of its reliance. The case favoring the excuse is strengthened when insisting on enforcement of the contract would result in a windfall to the other party.

All those elements are present in the Vassar case: college officials made an honest computer mistake to which it alerted students within an hour after they had done nothing in reliance. To enforce the letters as contracts would create a windfall–a spot at Vassar that the school’s admissions office had declined to award.

On the other hand, the school’s response to its error seems both glib and insensitive. It sounds as if the school is treating these students as the clinical subjects of the type that appear in the kind of legal analysis I just offered. The school should not forget the human dimension of its error. Perhaps it can could offer something more substantive to these students for its mistake. At minimum, the school should refund any application fee students paid, since the school botched the application process that those fees pay for.

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18 Responses

  1. Elisa Fielding says:

    My question – what if a student accepted and paid their deposit before the second email went out? This happened to one family I know, their daughter paid her deposit immediately. Is that doing something “in reliance” and does it create a contract in your opinion?

  2. Lawrence Cunningham says:

    Elisa: If a student promptly accepted and paid the deposit as you indicate, a contract may well have been formed; but the college’s claim for rescinding it based on unilateral mistake remains strong, because the reliance is quite technical–the deposit can be promptly refunded and no other change of position appears to have taken place. What would defeat the college’s unilateral mistake excuse, in my opinion, would be a student having withdrawn applications to other schools that could not be reinstated.

  3. Elisa Fielding says:

    Thanks for the clarification – I’m not sure what she did with her other colleges. Suspect her parents will be contacting their lawyers in any case!

  4. BillJ says:

    FYI: the NY Times article, from which you base your opinion, is not completely accurate. In addition to students that were admitted and denied there were also some that were deferred. Furthermore, some students did accept the offer and pay the deposit. My child received this notice of acceptance (he was meant to be deferred) and we promptly accepted it and paid the deposit via bank transfer–a transaction that I cannot stop. Finally, the school did not notify the students promptly, in my opinion. They discovered the error after 30 minutes but did not send out the correction email until 3 hours later.

  5. Lawrence Cunningham says:

    BillJ–Thanks for noting the additional group of applicants, though I’m not sure it actually complicates or changes the basic analysis. What counts as prompt error correction is interesting and contestable. It seems obvious that a delay of several business days, during which students would quite expectedly begin to make substantive changes in positions in their dealings with other schools, would be dilatory. It’s less obvious whether 3 hours during a weekend is prompt or dilatory.

  6. Matt says:

    Not important to the main point, but can a steer ever be anything but barren? At least as far as I’ve ever understood the term, a steer is a castrated male cow and so would never be a breader. (Where I grew up, at least, people would think you’d made quite a mistake indeed if you thought you could breed a steer, though I am sorry to get off topic.)

  7. Lawrence Cunningham says:

    Matt–Nice catch! In the post, I changed the word “steer” to the word “cow.”

  8. Howard Wasserman says:

    Would they have a tort claim, such as negligence or I/I/E/D? Not a lot of money involved and it’s not going to get what they probably really want, which is a spot in Vasser’s freshman class.

  9. PrometheeFeu says:

    Couldn’t the college also claim that they had no intent of being legally bound and that therefore, there is no contract.

  10. James says:

    Professor Cunningham — I have two comments. First, as to the formation of the contract: these applicants were participants in an early decision program. My understanding is that when the applicant submits the application, s/he signs a statement reciting that s/he will attend should Vassar accept her/him. To my way of thinking, that form of application makes the application, in essence, an offer. It is not, as would be the case were we dealing with a run-of-the-mill application, effectively a mere inquiry, an inquiry whose goal is to see whether Vassar deems the applicant eligible to attend. (“Vassar has accepted you, but we understand that you have no obligation to attend.”) Once Vassar accepts an early decision applicant, a contract is formed. Second, unilateral mistake: Vassar, located in Poughkeepsie, is subject to New York law. I confess that I have not researched the subject in depth recently, but if I remember correctly, New York requires extraordinary circumstances to relieve a party from a unilateral mistake. And, I don’t believe that those circumstances are present here. I’d appreciate your thoughts. — James

  11. Lawrence Cunningham says:

    James–Thanks for the nice questions.

    I would like to know more about the terms stated in the documents. Maybe Vassar’s application form indicates that those pre-committing to enroll make a binding offer that Vassar’s notice accepts. That sounds a little different than what I’ve heard applicants did after getting the mistaken letters though–they talk as if they were acccepting something Vassar offered. But I would like to see the written terms. (Interesting additional issue is whether Vassar “signed” the mistaken letters, a requirement to form a contract whose performance would go beyond a single year under the “statute of frauds”.)

    I haven’t researched the latest NY cases either, and of course there is a chance that the law of the state of an applicant might govern these cases, but I would describe the unilateral mistake doctrine as applying only in extraordinary circumstances in general. That is, it’s a very narrow doctrine, available only in very limited circumstances, in pretty much every state.

    But aren’t those circumstances present in cases like this? Everyone knows that one side made an honest, clerical mistake and, in most cases it seems, no one has taken any material irrevocable or damaging action in reliance on it. To uphold a contract in such circumstances would be to impose a punishment on the mistaken party, to deter it from making similar mistakes. I can imagine something in tort law, the law of negligence, being the route to achieve that objective. But to enforce such a contract would not protect the intentions of either party on these facts, which is contract law’s principle objective.

  12. BillJ says:

    To anwer your question above as to whether the documents were signed, the acceptance notices were signed by the college (electronic image of the Dean of Admission’s signature), and the students who promptly accepted the offers also sent their electronic signatures. Furthermore, a deposit was electronically transferred by some of the students and a confirmation receipt of that transfer was sent in return.

  13. Lawrence Cunningham says:

    BillJ: Thanks for the update.

    If there is a contract and it is valid despite Vassar’s unilateral mistake, the next question will be: what remedy should be provided?

    The standard remedy for breach of contract is money damages. These are designed to compensate the aggrieved party for the disappointed expectation caused by a breach.

    In cases when a money award would be inadequate to protect the expectation, it is possible to award “specific performance,” an order to compel the breaching party to perform its promise. The latter is an “equitable” remedy, not granted as of right, and requires judicial balancing of contending interests.

    These alternative remedies raise a profound question about the value of college education, and particularly a Vassar education: is it something measurable in money or something so special that money is no substitute for the promise of matriculation?

    This opens up many, many additional issues about remedies, how to measure them, how to evaluate their adequacy, the need for reasonable certainty, the duties breaching parties have to mitigate them, and others. This unfortunate story starts to look like the basis for a law school exam in a contracts class.

  14. James says:

    Professor Cunningham — I agree that the fact pattern, ripped from the headlines (if you will), is ripe for a law school exam. As for the remedy: it would be difficult, if not impossible, for a plaintiff to prove money damages. One measure, I think, would be the difference between the cost of tuition, etc. at a college that the wrongly rejected applicant decided to attend and the same cost at Vassar. Under that measure, there might be no damages at all. But suppose the measure were the one that you suggest: the loss in value of a Vassar education. Were Vassar to have to defend on that measure, it would be put in the deliciously ironic position of arguing that a Vassar education was no better, and would confer no greater a benefit, than an education at, say, Dutchess County Community College. The more I think about the facts, the more I think that your students are going to be discussing them on a final exam! Best. — James

  15. Lawrence Cunningham says:

    James–Thanks again. Very interesting comments.

    A doctrinal update: we did some research on New York contract law governing unilateral mistake. We could find no New York Court of Appeals cases or statutes directly on point. We found a few lower appellate court cases and a couple of federal court cases applying them. The import as as you suggested, reading as strict an approach to unilateral mistake as one might imagine.

    Stricter than what I described, these courts say that: (1) the mistake must be one the other side knew or should have known was a mistake, (2) the mistake must not be the result of negligence, and (3) enforcing the contract would be unconscionable. These are tougher standards than appear in the general common law found in many other states and the elements may be missing on the facts of cases involving mistaken college admission letters [(1) is certainly not met, (2) depends on what standard of care applies and what actually happened, and (3) depends on the notoriously slippery and subjective notion of the judicial conscience].

    That said, these cases arise in commercial exchanges unlike those of college and applicant, in addition to being the opinions of inferior and federal courts, rather than New York’s top court. The upshot? For reasons set forth in my initial post and in the comment thread, it remains difficult to predict how New York’s top court would rule in a case such as this. Therefore it is good exam material!

    Source: the most recent of the cases drawn on here, which cites the others: VCG Special Opportunities Master Fund Ltd. v. Citibank, 594 F. Supp. 2d 334, 343-44 (S.D.N.Y. 2008) (affirmed by the 2d Cir. in an unpublished opinion, LEXIS 26621).

  16. James says:

    Professor Cunningham — Yes, I looked, too, and could find nothing from the Court of Appeals. I found some Third Department cases requiring unconscionable injury; Vassar, in Dutchess County, is in the Second. But unlike the federal courts of appeals, in New York the four departments of the Appellate Division are considered one for stare decisis purposes, so that when one speaks the others, and the trial level courts within them, should ostensibly follow. By the way, on the unconscionability standard, would it make a difference in the following two situations, both relating to rejected students. Student A has a GPA of 2.75 and SAT scores on the three sections (combined) of 1500. Student B has a 3.6 and SATs of 2000. No other issues come into play, such as coming from a disadvantaged background. Unconscionable to allow Student A to enter, but not student B? I don’t know. Best. — Jamie

  17. Lisa says:

    I have a question about “mistaken” acceptance letters. I received my grad school acceptance letter without the requirement of taking the GMAT (although the catalog said it would be a requirement). The only requirement was providing my undergrad transcript with proof of that degree being awarded. I called and asked the college if that was correct and was told, “whatever your acceptance letter says it was you are obligated to do.” A couple months before I am expected to receive my grad school degree, I received a letter from the college stating I have to take the GMAT! I don’t have the money for that extra expense and, if I were to not get the minimum score, I won’t be able to graduate in time. In this case is the original acceptance letter considered to be legally binding(especially after I have been operating under the agreement for that last two years without any communication from the college to the contrary)?

    Thanks for your assistance!

  18. merey says:

    On 1 May 2011, Alison in Sydney wrote to Tina in Dubbo, offering to sell her bike for $300. Tina received the letter of offer on 4 May in the morning. Later that day she posted off a letter of acceptance to Alison.

    Unfortunately, when Alison was talking to a friend, Peter, in Sydney on 2 May 2011 about what she had done, Peter said the he would buy the bike from her for $350, so Alison sold the bike to him instead. She then posted a letter withdrawing the offer on 3 May, but this letter did not reach Tina until 5 May 2011.

    Has a valid contract been formed between Tina and Alison?
    what are the facts? what is the relevant law