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Corbin on Contracts

Copyright 2007, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

CHAPTER 3 ACCEPTANCE AND REJECTION OF OFFER

1-3 Corbin on Contracts § 3.8

§ 3.8 Acceptance by Overt Act

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Can an offer ever be accepted in any other way than by an ''overt act''? Before discussing this question, it should be noted that some promises may become binding without any acceptance at all. They are promises that are not offered as a part of any bargaining exchange. Suppose a buyer has purchased a product and has fully paid for it. Subsequently, the seller or manufacturer sends a notice to the buyer that certain problems with this model of the product have occurred and if the buyer will take the product to the place of purchase the manufacturer will make certain preventive repairs. The promise is enforceable without any process of bargaining and without any consideration.n1 Further, a new promise to pay a debt that has been barred by statute of limitations is binding just as soon as it is communicated to the promisee. No expression of assent by the latter is necessary.n2 The promisor has made no bargaining offer. Similarly, at common law, a sealed written promise delivered to the promisee is binding without any process of acceptance of an offer.

Unilateral contracts, of the kind discussed above, involving no bargaining element require no expression of assent called an acceptance. In bargaining contracts such an expression is required. In these instances, expression nearly always requires overt action. There may be a few cases in which silence alone-total inaction-is an expression of assent that is legally operative as an acceptance, because of the antecedent conduct of the parties and the surrounding circumstances. The problem of silence as an acceptance is dealt with elsewhere.n3

The offer creates a power in the offeree to create a contract by accepting. The terms of this power are dictated by the offeror. It is commonly said that the offeror is master of the offer. If the offer unequivocally states the manner of acceptance, absent special circumstances, acceptance must take place, if at all, in the specified manner. Where the offer fails to prescribe unequivocally the appropriate manner of acceptance, the rule of reasonableness prevails.

Acceptance by words or by conduct from a which a promise may be inferred. Acceptance by words, whether written or oral, is acceptance by overt action. The words ''I accept your offer'', spoken by the offeree, are overt action by the offeree. It will be seen, therefore, that acceptance is by overt act, without regard to whether the resulting contract is bilateral or unilateral, whether the acceptance is promissory or non-promissory. Ordinarily, the making of a promise is by overt action.

Nevertheless, it is important to consider different types of overt action, their significance as expressions of assent, and their effect on the legal relations of the parties.

In the beginning, it must be made clear that in the cases often described as an ''offer of a promise for an act'' the act that is requested may constitute the making of a promise, and the resulting contract may be bilateral. If an offer is made by A to sell to B a parcel of land for $5,000, at the same time specifying that B may accept by hanging out a flag so that A can see it as he goes by, the offer is one empowering B to make a bilateral contract, not a unilateral one. A offers a promise of a conveyance in exchange for B's promise to pay $5,000. The hanging out of the flag is, to be sure, an ''act'', but also it is sign language by the use of which B makes, and communicates to A a promise to pay $5,000. Except for the promissory significance of the act of hanging out the flag, A would never offer the promise of a conveyance for it.n4 It is not the performance bargained for.

Acceptance by performance or by commencement of performance. If, on the other hand, A desires that a flag be hung on a certain flagpole and offers a promise to pay $10 to B for hanging the flag there, the act of hanging the flag constitutes B's acceptance, just as in the case above. However, now it is not sign language and B makes no promise. In the present case, the act of hanging out the flag is not only the act for which A offers to exchange the promise, but also the performance for which A promises to exchange ten dollars. In the first case, A offered to exchange a promise for a promise by B. The conveyance of the land was to be exchanged for $5,000. There was an exchange of promises, and also an exchange of performances.

Many cases can be found in the reports illustrating the offer of a promise for an act, in which the act is promissory and the resulting contract bilateral. It must suffice here to make reference to a very few. A carrier promised to receive 10,000 staves and transport them to Mobile, at a specified freight rate, if the owner would place them on a certain wharf and have them ready on arrival of the carrier's ship.n5 Here, the specified acceptance was to consist of the act of piling the staves on the wharf, after which the carrier's offer became irrevocable, but the piling of the staves was not all that the offeree was eventually to do. The offeree was later to do the very important act of paying the agreed freight. At some point in the accepting action, the offeree made a promise to pay the freight. If the offeree did not do this, no contract was ever made. Cases of this sort have been made the centerpiece of the Uniform Commercial Code's provisions on acceptance. Section 2-206 of the Code provides:

(1) Unless otherwise unambiguously indicated by the language or circumstances

(a) an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;

(b) an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that shipment is offered only as an accommodation to the buyer.

(2) Where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed before acceptance.

A premise to this section of the Code, the rule of which has been incorporated in substance into the Restatement (Second) of Contracts,n6 is that many, and probably most, offers are indifferent as to the manner of acceptance. Consequently, in the case of an indifferent offer, any reasonable manner chosen to accept will create the contract. If the beginning of performance is reasonable and sufficiently indicates an intent to accept, a contract is created even without communication.n7 If, however, the party who has accepted fails to give notice to the other within a reasonable time, the latter has the option to deem that the offer has been rejected, or, on learning the facts, regard the contract as binding on both parties-a bilateral contract.

The Code provision preserves the common law idea that the offeror is master of the offer.n8 However, it reflects an underlying assumption that the offeror is often indifferent as to what words or non-verbal conduct will create an acceptance. Subdivision 1(b) is a concrete example of the rule expressed in 1(a). It should be noted that the general principle of 1(a) may override the specific example given in 1(b). Consequently, a buyer's offer for the current shipment of goods may be accepted not only by shipment or promise to ship, but also by commencement of performance, as, for example, the preparation of the goods for shipment.n9

In another case, a dealer wrote to the plaintiff, who was running an exhibition, ''Please reserve for us 234 sq. ft. for which we agree to pay $234.'' The plaintiff held the space reserved, but sent no notice to the dealer. Before the show opened, the dealer gave notice of revocation. This notice was held ineffective and the dealer had to pay.n10 If we accept the court's holding that the actual reservation of the space was a sufficient acceptance, a bilateral contract was made. If the defendant was bound by the promise to pay, we must interpret the plaintiff's action as being a promise that the space would be kept open for the defendant's use. It may be that, if the dealer had no convenient way of learning of the reservation with reasonable certainty and promptness, the court should find an implied condition that the plaintiff notify the dealer of the reservation.n11

There are numerous cases in which one offers to transfer ownership of chattels and authorizes the offeree to take possession on certain terms. The taking possession by the offeree is an acceptance by an act, and it is also a promise to comply with the specified terms.n12

Often it is not easy to determine whether or not the act of acceptance is promissory in character. This is merely another way of saying that it is often difficult to interpret the offer. For the power of acceptance is created by the offer, and the acceptance must comply with its expressed terms. Let us consider in detail the following case:

The defendant wrote a letter to her daughter and son-in-law, the plaintiffs, promising that if they would move from Missouri to Maine and would care for the defendant during her life, they should have the ownership of the home place after the defendant's death and the use of it during her life. The plaintiffs moved as requested and cared for the defendant for a few weeks. Trouble ensued, caused, as the court finds, by the unreasonable demands and bad disposition of the defendant, whereupon she conveyed the premises to her son-a co-defendant. The plaintiffs filed a bill in equity to compel a reconveyance from the son to his mother, to restrain the prosecution of a statutory ejectment suit brought by the son, and to obtain a decree that the mother should hold the land in trust for the plaintiff. The relief asked was granted in full.n13

The court says: ''The offer was the basis, not of a bilateral contract, requiring a reciprocal promise, a promise for a promise, but of a unilateral contract requiring an act for a promise... The plaintiffs here accepted the offer by moving from Missouri to the mother's farm in Lewiston and entering upon the performance of the specified acts... The existence of a completed and valid contract is clear.''

In this case the defendant was the offeror, and by her letter she created in the plaintiffs the power to form a contract by accepting. What was this power and how was it to be exercised? The defendant has clearly offered to undertake the duty of allowing the plaintiffs to enjoy the use of certain lands during her life and of conveying to them the fee therein at her death. Did she in return ask the plaintiffs to promise to support her until her death? No such promise was asked for in express terms, nor was such a promise expressly made. Nevertheless, it would not be unreasonable to find an implication of such a promise both in the offer and in the acceptance. In such case, the contract would be bilateral, for each of the parties would be undertaking to perform certain acts in the future. The contract would include mutual rights and mutual duties. The act of the plaintiffs in moving to Maine might have been understood by the parties as an expression of an intention to undertake the duty of supporting the defendant during her life, that is, this act would be a promissory act. If such was the fact, the decision is justifiable; for the contract was fully completed,-the requested promissory acceptance had been given, and the offeror had knowledge of it.n14

In cases of this sort, the parties may not be at all clear in their own minds as to the legal relations that they desire to create. The court must determine their legal relations, not because the parties have clearly assented to them but because they have done certain acts that ought to result in such relations. It is quite likely that the defendant had no notion of what she wanted by way of acceptance of the offer. The court says, however, that the contract was unilateral. This means that the plaintiffs were requested to make no promise, either by words or by other action. They undertook no duty for breach of which they would be bound to pay damages. They could have abandoned the place in Maine and ceased to support the defendant, without committing any breach of contract. It does not follow from this, however, that the defendant was not bound, and still had the power and privilege of revoking her offer.

Since the court was willing to hold that the defendant's offer became irrevocable after the plaintiff rendered the substantial part performance of moving from Missouri to Maine, this made it unnecessary to decide whether or not the plaintiffs had by their action promised to render complete performance for the defendant's life. In either case, the plaintiffs were entitled to the remedy that they sought. But if the parties had been reversed, the plaintiff having wilfully abandoned performance, before giving to the defendant a judgment for damages it would have been necessary to find that the plaintiffs had, by implication, promised to render all the requested service.n15

Whether the expressions of the parties be interpreted as making either a bilateral or a unilateral contract, in either case the defendant's duty to convey the land should be held to be conditional upon performance substantially in full by the plaintiffs, and the defendant's duty to permit continued occupancy by the plaintiffs should be held to be conditional upon the plaintiffs' continuing to render the support requested. If the plaintiffs promised to perform, the defendant's duty is constructively conditional on substantial performance of that promise. If the plaintiffs did not promise to perform, the defendant's duty is constructively conditional upon the substantial performance of the requested service.n16 In the actual case, therefore, the final decree should have been a conditional decree, making proper provision for the continued support of the defendant. If, even because of the defendant's own wilful breach, it had become impracticable to carry out the purposes of the agreement, the decree should have been restricted to compensatory damages only, or should have required the land to be held in trust for the plaintiff subject to proper provision for the defendant's continued support for life.

It is sometimes said, in cases like the foregoing, that the contract is consummated as soon as the first substantial act has been done as requested by the offeree.n17 This is reasonable and just, and our contract theories should be molded in harmony therewith. If the facts justify it, a promise to complete the requested performance can be found by implication, and the contract is bilateral.n18 If the facts do not justify such an implication, then a unilateral contract exists in which the defendant's duty is conditional upon continued performance by the plaintiff.n19

Although the beginning of the action requested by the offeror may make the offer irrevocable, the substantial completion of the requested action is necessary before the offeror's promise is immediately enforceable. If the offeree performs in part and then delays completion beyond a reasonable time, the offeror's promise cannot be enforced. In determining how soon the offeror is discharged by the offeree's failure to complete the requested acts, the terms of the offer must be interpreted with the same regard to usage and to customary practices as in the case of any other kind of contract. If the offeror has not expressed an intention to the contrary, it may be reasonable for the offeree to ship the goods in separate parcels and at different times. In the absence of a clear requirement that the requested action shall be completed within a definite time, completion within a reasonable time is enough.

One who makes an offer to sell land for a stated price ''if paid within 15 days'' thereby promises to deliver a deed of conveyance concurrently with payment. For this reason an operative acceptance is possible without an actual delivery of the money. If within the 15 days the buyer appears and gives notice of acceptance and readiness to procure the money by drawing a check on a sufficient bank account, but the vendor is not then able to deliver the required deed within the 15 days, a contract has been consummated without actual payment.n20 It should be regarded as bilateral.

In Ever-Tite Roofing Corp. v. Green, n21 the defendant made a written offer to pay for specified roofing work, providing that acceptance must be either in writing or ''upon commencing performance of the work.'' Before the end of a reasonable time for acceptance, the plaintiff sent its workers with two trucks loaded with materials for roofing to the defendant's residence. The defendant then forbade them to do the work. The action of the plaintiff was held to be an operative acceptance in accord with the terms of the offer. Observe that although the acceptance was by the ''act'' of commencing performance without other communication, the contract that was consummated was a bilateral contract. The drafter of the roofer's form accomplished by draftsmanship what the U.C.C. and Second Restatement seek to accomplish by legislation and education.

Acceptance by shipment of non-conforming goods. At common law, if a buyer orders the shipment of six hogsheads of rum at once, the shipment of three hogsheads is not an acceptance.n22 Under the Uniform Commercial Code, the shipment is both an acceptance and a breach. Under the circumstances, it may be a curable breach, but it is nonetheless a breach by shipment of non-conforming goods. The seller may avoid this result by informing the buyer that the nonconforming shipment is intended merely as an accommodation.

In Corinthian Pharmaceutical Systems, Inc. v. Lederle Laboratories, n23 the buyer placed a larger than normal order of 1,000 vials of DPT vaccine at the seller's then current selling price of $61 per vial. The seller notified the buyer that its selling price had been increased to $171, and normally it would invoice the order at the price in effect at the time of shipment. However, the letter continued, because of the magnitude of the price increase, it was shipping 50 vials at the old price and would ship the rest at the new price. The buyer claimed that the shipment of the nonconforming quantity constituted an acceptance of the offer and a breach. The court, however, ruled, quite correctly, that adequate notice had been given that the shipment was intended as an accommodation.

Acceptance by wrongful act of dominion. Suppose a seller offers certain goods at a specified price. Suppose the buyer takes and uses the goods but clearly and firmly communicates to the seller a lack of intention to accept, perhaps saying, ''I have taken the goods, but I will pay you one-half of your price. I am not accepting your offer.'' Clearly the offeree has committed the tort of conversion. The course of history has given the seller three optional remedies: a tort action for conversion; the ability to ''waive the tort'' and sue in quasi-contract; or, under an ancient theory of estoppel, an action in contract wherein the tortfeasor is estopped from claiming the status of a tortfeaser where the tortious conduct could have been the rightful acceptance of an offer.n24

Legal Topics:

For related research and practice materials, see the following legal topics:

Contracts LawFormationAcceptanceMethods of AcceptanceSilenceCommercial Law (UCC)Sales (Article 2)Form, Formation & ReadjustmentOffer & AcceptanceContracts LawFormationAcceptanceMethods of AcceptanceGeneral OverviewContracts LawFormationAcceptanceMethods of AcceptanceOvert Acts

FOOTNOTES:

(n1)Footnote 1. See Uniform Commercial Code § 2-209.

(n2)Footnote 2. See Chs. 8 and 9 dealing with Informal Contracts Without Assent or Consideration.

(n3)Footnote 3. See §§ 3.18-3.21 below.

(n4)Footnote 4. There are many cases in which the only acceptance of an offer was the performance of some action from which a promise would be inferred. See the sections dealing with Implied Promises in Chapter 25 on Interpretation.

The acceptance of delivery of a deed poll in which the conveyance is on some condition involving action by the grantee or in which the grantee ''assumes payment'' of a debt is ordinarily held to be a sufficient basis for inferring a promise to perform the condition or make the payment. An illustrative case is Goodwin v. Tyson, 167 Ark. 396, 268 S.W. 15 (1925) , finding an implied promise to support the grantor and his family.

An excellent illustration is Autographic Register Co. v. Philip Hano Co., 198 F.2d 208 (1st Cir.1952) . In resolving a dispute as to a patent license, the licensee sent a check for royalties, specifying that retention of the check ''would constitute an undertaking to repay'' in the event of an affirmance on appeal of another case. The licensor cashed the check without any communication to the licensee. This was held to be an operative acceptance, whatever may have been the licensor's ''intention.'' Observe, too, that the licensor's ''act'' was a ''promise.''

In Northern Natural Gas Co. v. Landon, 212 F.Supp. 856 (D.Kan.1961) , judgment aff'd, 338 F.2d 17 (10th Cir.) , cert. denied, 381 U.S. 914 , the plaintiff had a contract for the purchase of gas from defendant at 5cent(s) per mcf. The legislature then passed a law fixing a minimum price of 11cent(s). Thereafter, the plaintiff informed the defendant that it would pay 11cent(s) under protest, on condition of a refund in case the law was held to be invalid. The defendant accepted and cashed the plaintiff's checks bearing a similar endorsement. The court held that the defendant was bound by contract to refund the overpayment, the letter of plaintiff being an offer and defendant's actions an acceptance. Observe that the defendant's ''act'' was promissory.

The defendant received a purchase order for work and materials. The defendant performed the work and demanded payment. By this conduct, the defendant expressed assent to the terms of the order, including a promise to indemnify the other party. Joseph v. Atlantic Basin Iron Works, 132 N.Y.S.2d 671 (Sup.1954) , aff'd, 285 App.Div. 1147, 143 N.Y.S.2d 601 . Observe that by the ''act'' of acceptance the offeree made a promise.

In George Pridemore & Son, Inc. v. Traylor Bros., Inc., 311 S.W.2d 396 (Ky.1958) , the defendant sent a ''purchase order'' to plaintiff, a subcontractor, expressly covering plumbing, heating, and air conditioning, and authorizing beginning work. Acting under it, the plaintiff began work, completing the plumbing and heating but wholly overlooking the air conditioning. Beginning work was an authorized mode of acceptance, but only of the offer as made in the written order. Even though the plaintiff overlooked the air conditioning, as it asserted, its beginning work bound it to do all the work covered by the order, at the price specified. Its acceptance was by an ''overt act''; but the contract thereby made was a ''bilateral'' contract.

In Acadia, California, Ltd. v. Herbert, 54 Cal.2d 328, 5 Cal.Rptr. 686, 353 P.2d 294 (1960) , the plaintiff sent its check for $1,000 expressly stating that its acceptance would confirm the understanding that existing facilities for supply of water by the defendant would be continued. The defendant cashed the check but wrote that it was accepted under a previous written contract. The court held that the cashing of the check operated as an assent to the conditions on which it was tendered. Here the plaintiff specified the act by which its offer could be accepted and also the significance thereof. That significance was a promise to continue the water service. The resulting contract was unilateral, because the sending of the check was itself the offered performance-a non-promissory act. The acceptance (the cashing of the check) was also an ''act,'' but it was a promissory act. See note on this case under § 3.30.

In Allied Steel & Conveyors, Inc. v. Ford Motor Co., 277 F.2d 907 (6th Cir.1960) , a purchase order for installation of machinery stated certain promises by the seller, including a promise of indemnification, and suggested a mode of acceptance by signing and returning a duplicate copy. The court held that the offeree's beginning work, with the knowledge and assent of the buyer, was an operative acceptance of the purchase order on all of its terms. The resulting contract was bilateral, including the promise to indemnify. Here, the offer required a promissory acceptance, but not an acceptance by the ''act'' of beginning work. Yet such an act was operative as a promise. See also notes under § 3.9 and § 3.34.

(n5)Footnote 5. Mott v. Jackson, 172 Ala. 448, 55 So. 528 (1911) . In the actual case, it may well be that in the oral conversation between the shipper and the carrier, the former promised to ship the staves and to pay the freight, the latter promising in exchange to carry to Mobile if the staves were on the wharf ready for loading. In such case, the act of piling the staves on the wharf was not an acceptance at all. It was merely a condition of the carrier's duty. But no such promise by the shipper was alleged by the plaintiff.

(n6)Footnote 6. Under the Restatement (Second), ''in case of doubt, an offer is interpreted as inviting the offeree to choose between acceptance by promise and acceptance by performance. See §§ 30, 32, 58.'' Restatement (Second) of Contracts § 62 comment a. In such a case the ''tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance.'' Restatement (Second) of Contracts § 62(1). In such a case, the contract so formed is bilateral. Id. § 62(2). Notice of the beginning of performance would generally be a condition of the contract, not a condition to formation. Id. §§ 54 comment b; 56 comment a.

(n7)Footnote 7. Much ink has been used in attempts to reconcile Official Comment 3 with the text of the U.C.C. § 2-206. The comment seems to indicate that no contract is formed until the offeror is notified, although the offer may become irrevocable. The attempted reconciliations do not work. Comment 3 is inconsistent with the text of the Code and should be disregarded.

(n8)Footnote 8.

U.S. -In Southwestern Stationery & Bank Supply Co. v. Harris Corp., 624 F.2d 168 (10th Cir.1980) , it was held that the phrase ''seller shall mail to purchaser a signed duplicate copy hereof,'' was unambiguous as a matter of law. Kroeze v. Chloride Group Ltd., 572 F.2d 1099, 1105 (5th Cir.1978) .

Ariz. - Empire Machinery Co. v. Litton Business Tel. Sys., 115 Ariz. 568, 566 P.2d 1044 (1977) .

(n9)Footnote 9. Wheaton Glass Co. v. Pharmex, 548 F.Supp. 1242 (D.N.J.1982) , noted in § 2.32 above; Joseph Muller Corp., Zurich v. Commonwealth Petrochemicals, 334 F.Supp. 1013 (S.D.N.Y. 1971) .

(n10)Footnote 10. High Wheel Auto Parts Co. v. Journal Co., 50 Ind.App. 396, 98 N.E. 442 (1912) . It seems probable that the plaintiff solicited the order for space. I indeed, the order may have been an acceptance of an offer by the manager of the exhibition. But the court regards the order as an offer, not as an acceptance. In any case, it seems probable that the defendant was assured when it gave the written order that the space would be reserved.

(n11)Footnote 11. See § 3.13 below.

(n12)Footnote 12.

U.S. -In Pyrate Corp. v. Sorensen, 44 F.2d 323 (9th Cir.1930) , the defendant was a licensee and sales agent under a contract by which he promised to buy and dispose of a stated amount of the product and in which he was given the option of a renewal for five years. About the end of the original term, he made new contracts with sub-agents for a new period of five years. This was known to and acquiesced in by the plaintiff, and the defendant continued to act under the contract, but no express notice of renewal was ever given by the defendant. The court held that the conduct of the defendant was an assent to renewal and was a promise to continue performance for five years.

Conn. -In Ostman v. Lee, 91 Conn. 731, 101 A. 23 (1917) , the defendant was put in possession of an old automobile under an agreement to buy it, if he found it useful for his business. He kept the machine for nearly two years, in the meantime having offered it for sale, and then notified the plaintiff that he did not wish to buy it. It was held that the defendant's acts constituted an acceptance and a promise to pay the price.

Ga. - Classic Restorations, Inc. v. Bean, 155 Ga.App. 694, 272 S.E.2d 557, 562 (1980) . Bean's house burned. Classic's sole stockholder, Floyd, arrived in the same car with Bean's insurance adjuster, just after Thanksgiving. The adjuster recommended Floyd's work to Bean, promised that Floyd would restore her house to its pre-fire condition, told her she would not get a penny more than Floyd's price if she used anyone else, and that Floyd would not be paid a penny by the insurer until he had done the work to her satisfaction. Floyd promised to finish the work by Christmas. In April, dissatisfied with the work (which at trial Floyd admitted he would not have in his house), tired of living in a motel with her pets boarded out, Bean told Floyd to get off the property. Classic sued for $7,000; Bean counterclaimed for a like amount, claiming ''Mr. Floyd did more damage to the house than the fire did,'' winning a jury verdict for $5,200. This was affirmed. The court noted that Bean had signed a ''proposal/contract''. It concluded that Classic's assent could have been manifested by the beginning of performance. A bilateral contract resulted.

Ill. -In Calo, Inc. v. AMF Pinspotters, Inc., 31 Ill.App.2d 2, 176 N.E.2d 1 (1961) , the plaintiff as lessee of a building was bound under the lease to make certain alterations. The defendant prepared a purchase order to be executed by the plaintiff and given to the defendant as an offer to purchase and to lease certain equipment to be used in the alterations. The plaintiff informed the defendant that it had secured the necessary license and signed and delivered to the defendant the purchase order. The defendant then requested and received an additional payment of $5,000 on account. The court held that the defendant's action constituted an acceptance of Calo's offer, even though it had never signed the purchase order. The contract thus made was a bilateral contract. The court quoted this section and §§ 1.11 and 562. See also note under § 3.23.

Wash. -In Bicknell v. Henry, 69 Wash. 408, 125 P. 156 (1912) , the court said: ''The telegram was a refusal to permit the delivery of the sheep unless the claim was paid or assumed. He thereupon took the sheep. It is true he made no verbal or written promise to assume or pay the note... He acted upon the authority of the telegram, and is bound thereby as much as if he had answered back in writing: 'I will take the sheep and pay the note.'''

(n13)Footnote 13.

Me. - Brackenbury v. Hodgkin, 116 Me. 399, 102 A. 106 (1917) . This case is also considered at length in § 2.32 above.

A similar case is Clark v. Coulson, 351 S.W.2d 538 (Tex.Civ.App.1961) , writ of error refused, n.r.e., noted herein under § 127, § 529.

(n14)Footnote 14. In Davis v. Jacoby, 1 Cal.2d 370, 34 P.2d 1026 (1934) , the facts were similar and the court held that a bilateral contract was consummated by the offeree's action in closing up business in Canada and moving to California. The offeree's action was promissory by implication.''

(n15)Footnote 15. In Hollidge v. Gussow, K. & Co., 67 F.2d 459 (1st Cir.1933) , the defendant made a written order for 160,000 copies of an advertising paper, in 8 monthly issues of 20,000 each. The court held that this order was made irrevocable by the publisher's delivery of the first issue. The publisher was held entitled to damages for the defendant's failure to take the other 7 issues. A promise by the publisher to deliver them might easily have been implied, and no doubt would have been if the publisher had been the one committing the breach.

The case of Durasteel Co. v. Great Lakes Steel Corp., 205 F.2d 438 (8th Cir.1953) in which an analysis of the facts will show that the case is similar to the Hollidge case cited here. The acceptance relied on by the court was the actual shipment of some installments of the goods ordered. Without doubt, the seller thus bound itself to ship the remainder of the goods, and the contract was bilateral.

(n16)Footnote 16.

Or. -In Walker v. American Optical Corp., 265 Or. 327, 509 P.2d 439 (1973) (en banc), American's sales incentive plan promised bonuses to employees exceeding a certain quota provided they were still working for American at the time of distribution. Walker far exceeded his quota, but voluntarily left American before distribution. He sued for his bonus. The court affirmed a judgment for American, citing this section and others for the proposition that an employer's duty to pay a bonus which is subject to a condition precedent of performance arises only when the condition is fulfilled. Here the purpose of the plan was to secure the continued services of employees producing high levels of sales. The promise of a bonus helps advance that purpose-but so does the denial of a bonus to an employee who leaves the company, contrary to the terms of the offer. The same principle was involved in State ex rel. Roberts v. Duco-Lam, Inc., 72 Or.App. 473, 696 P.2d 561 (1985) , review denied, 299 Or. 313, 702 P.2d 1110 . The employer told its employees that it could not operate at current labor costs. As an alternative to ceasing operations if offered to continue if the employees would agree to a wage reduction of 30% for two months. The withheld sums would be paid in the event market conditions later improved to the point where profits would allow such a payback. The employees agreed. It was held that the wage reduction agreement was valid and did not violate a worker's protection statute.

(n17)Footnote 17. In Martin v. Meles, 179 Mass. 114, 60 N.E. 397 (1901) , where the defendant subscribed money to be used by a committee in rendering a requested service, Mr. Justice Holmes said: ''If necessary, we should assume that the first substantial act done by the committee was all that was required in the way of acts to found the defendant's obligation. But, if that were true, it would follow that as to the future conduct of the committee their promise not their performance was the consideration.'' Here the learned Justice seems to say that a promise to complete the performance by the committee would be implied. In the case before him, such an implication may have been justified, but the same result should be reached in the absence of such an implication.

(n18)Footnote 18. An excellent illustration is found in Wood & Brooks Co. v. D.E. Hewitt Lbr. Co., 89 W.Va. 254, 109 S.E. 242, 19 A.L.R. 467 (1921) . The plaintiff sent an order for 500,000 feet of lumber on fully stated terms, saying ''If you cannot deliver as ordered please advise us immediately.'' The defendant made no reply; but within the time limited for performance it shipped 160,000 feet and notified plaintiff as to inspection. There were additional circumstances. The jury was held justified in finding that the defendant had impliedly promised to fill the order as given.

If one offers a promise to pay for specified construction or for service over a period of time, the beginning of the work so that it is known by the offeror may be a sufficient acceptance to bind both parties by mutual promises.

U.S. - Fujimoto v. Rio Grande Pickle Co., 414 F.2d 648 (5th Cir.1969) .

Ga. -In Silvey v. Wynn, 102 Ga.App. 283, 115 S.E.2d 774 (1960) , the parties made a profit-sharing agreement and reduced it to writing. The defendant did not sign it, but he performed as it required until there was a falling-out. The court held that the defendant had expressed assent and that an action lay for breach of his promise so made. See also Allied Steel above, note 4.

N.Y. - White v. Corlies, 46 N.Y. 467 (1871) ; Post v. Albert Frank & Co., 75 Misc. 130, 132 N.Y.S. 807 (1912) .

Wis. - Albright v. Stegeman Motorcar Co., 168 Wis. 557, 170 N.W. 951, 19 A.L.R. 463 (1919) .

(n19)Footnote 19. The offer might be clearly so worded as to require this interpretation. In the case above discussed, the defendant might have written: ''I ask you to leave Missouri and move to Maine. You need make no promises of any kind to me. In consideration of your moving here as I have requested, I promise to leave the land to you at my death, on condition that you have lived upon it and supported me until that time.''

(n20)Footnote 20.

W.Va. - Barrett v. McAllister, 33 W.Va. 738, 11 S.E. 220 (1890) .

(n21)Footnote 21. 83 So.2d 449 (La.App.1955) .

(n22)Footnote 22.

N.Y. - Bruce v. Pearson, 3 Johns. 534 (1808) . The precise holding was that, because the shipment did not constitute an acceptance, the risk of loss did not pass to the buyer. Query: if the issue were different, might not an implied promise to complete performance be inferred from the circumstances?

No contract is consummated if the offeree when making any shipment indicates that it is made on terms other than those specified in the order. Baird v. Pratt, 148 F. 825 (8th Cir.1906) ; Goodspeed v. Wiard Plow Co., 45 Mich. 322, 7 N.W. 902 (1881) . This statement, while true at common law, is subject to the qualifications legislated in Uniform Commercial Code § 2-207, discussed at § 3.37 below.

(n23)Footnote 23. 724 F.Supp. 605 (S.D.Ind.1989) .

(n24)Footnote 24. This kind of case is further discussed in §§ 3.17 and 3.21 below. For the moment two illustrations will be given. In Sinclair Refining Co. v. May Bros. Oil Co., 118 Ohio App. 263, 194 N.E.2d 75 (1963) , the plaintiff offered to sell to defendant all of its equipment at a service station at stated terms. The defendant replied by a counter-offer to buy certain specified items of the equipment at the prices the plaintiff had stated, and enclosed its check for this amount. The plaintiff cashed the check without word to the defendant, but at a later time sued the defendant for the value of all of the items specified in its original offer, less the amount received. The plaintiff, by its act of cashing the check, accepted the offer, irrespective of its intention, and effectuated transfer of ownership of the articles. The transaction was a fully executed cash sale.

In Valiant Steel Equipment, Inc. v. Roadway Exp., Inc., 205 Ga.App. 237, 421 S.E.2d 773 (1992) , tenant offered to enter into a new lease on different terms than the expiring lease. The lessor made a counter-offer. The tenant continued in possession. It was held that continued possession with knowledge of the counter-offer would constitute acceptance of the counter-offer.