93 Of 174 documents

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 § 3.15

§ 3.15 Notice as a Condition Distinguished From Notice as an Acceptance

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As indicated in the preceding section, the giving of a notice may be a condition in an already consummated contract, even though no notice of acceptance is necessary to consummate it. Most contracts create conditional duties to render some performance in the future, but they are none the less valid contracts for being conditional. A binding and irrevocable obligation may exist long before it is the promisor's duty to pay over the counter-before there is a duty of immediate performance. A fire insurance policy, duly delivered, is a valid contract, even though the insurer's duty to pay is conditional upon the occurrence of a fire and upon the giving of notice that a fire has occurred. Notice of some fact may be made a condition precedent to a duty of rendering immediate performance, either by express terms of the contract or by construction of law. This notice is not a notice of acceptance that makes the contract. So, the duty of a surety is certainly conditional upon non-payment at maturity by the principal, and it may also be held to be conditional upon a notice that the credit has been given and another notice that there has been a default.n1 In the present chapter, we are dealing with notice as a necessary part of an operative acceptance, not with notice as a condition precedent to a duty of immediate performance.

Legal Topics:

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

Contracts LawFormationAcceptanceMethods of AcceptanceGeneral OverviewContracts LawContract Conditions & ProvisionsGeneral OverviewContracts LawFormationAcceptanceGeneral OverviewContracts LawFormationAcceptanceMethods of AcceptanceOvert Acts

FOOTNOTES:

(n1)Footnote 1. See the discussion of Bishop v. Eaton in the text of § 3.14 above.

See also §§ 724-727.

94 Of 174 documents

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 § 3.16

§ 3.16 Offer of a Promise, Requesting Non-promissory Action in Return

Up to this point in this volume, unilateral contracts have been referred to many times.n1 The most common form of a unilateral contract is that in which the offeror makes a promise and asks some performance by the offeree in return, clearly indicating that the requested performance can be the entire agreed exchange both for the promise contained in the offer and for the performance of that promise. Thus, A requests B to ship specified goods ''as is'' by a named carrier, promising to pay the price that B has previously listed. The actual shipment by B as directed will ordinarily transfer ownership of the goods to A, so that the transaction is an executed sale on credit. The contract is then unilateral, unless by custom or by some expression in A's offer there is a demand for an express or implied promise by B to render further performance in addition to the shipment. In either case the act of shipment is an operative acceptance.n2 The same situation exists where a buyer promises to pay for goods in return for delivery by the seller.n3 In cases like these, it has often been held that the offeree may accept by mailing a letter containing a promise to supply the goods-an ''acceptance of the order,'' and that a revocation after such acceptance is too late, even though the goods are not yet shipped.n4 It must not be assumed too readily that an order for goods is an offer of a promise in return for title to the goods to be conveyed by the act of shipment or otherwise. The offeror frequently wishes a return promise, as the offeree understands. The language used may be elliptical, and understood to be so. This fact is recognized in the Uniform Commercial Code § 2-206, which provides that unless the offer demands with crystal clarity that the acceptance be by performance rather than promise, the offeree may appropriately choose any reasonable mode of acceptance.n5

General offers of a reward or money payment are frequently made by publication, requesting or inviting the doing of some non-promissory act such as the return of a lost article, the giving of information,n6 the arrest of a fugitive,n7 the use of a medicine,n8 the winning of a contest,n9 the catching and return of a tagged rock fish,n10 the advance of goods or money to a third person,n11 or proving that an advertised claim is false.n12 In these cases, the act is both the acceptance and the only subject of agreed exchange to be received by the offeror. Unless otherwise specified in the offer, no notice of acceptance by the offeree is necessary; the offeree's performance is enough.n13

Another example of a unilateral contract in the form of an offered promise to pay for service to be rendered, is the case of an agreement to employ a person for an indefinite period at a stated salary per day or month or year. In a good many such cases, it has been held that the employee has made no promise of any kind. The employee accepts the offer by merely continuing to render the specified service, and becomes entitled to the promised salary in proportion to the work actually done. By such an interpretation of the expressions of the parties as this, the transaction is a ''hiring at will.''n14 The classic simplicity of this form of unilateral contract has been made more complex in recent decades and will be the subject of a separate section.n15

There are cases in which an employer has promised a ''bonus,'' some form of benefit in addition to agreed wages or salary, on condition that the employee or employees remain in service for a stated period. In such cases the offered promise is almost always so made as to make it unnecessary for the employee to give any notice of assent. It is sufficient that the employee continues in the employment as expressly or impliedly requested. It is certain that after so continuing in performance, the employer cannot withdraw or repudiate the promise of a bonus without liability either in damages or for a proportionate part of the bonus promised.n16 A unilateral contract exists when the period of service is substantially completed. Prior to that time the offer has become irrevocable. This analysis goes beyond the bonus promise to the many kinds of promises made to employees with regard to fringe benefits as well as the promises made to agents.n17

Many contracts between a real estate broker and a principal are unilateral in character. The principal promises to pay a commission for finding a purchaser willing and able to pay a stated price. The agent does not promise to find such a purchaser, but has a right to the commission if the agent finds one.n18 An option contract may existn19 as soon as the principal's offer has become irrevocable by reason of the agent's action in reliance upon it.n20 In some cases the principal may request and the agent may give a return promise to make diligent effort, or to advertise the property, thus making a bilateral contract. In any case, whether the contract is unilateral or bilateral, the owner may condition the duty to pay the commission on final consummation of a contract of sale or even on actual receipt of the price.n21

It must not be assumed too readily that one who makes an offer to pay for specified service does not ask for a promise of such service. Frequently, and perhaps usually, the starting of the requested service by the offeree justifies the inference that the offeree is also promising to complete the service.n22 If there is such an implied promise in return, the contract is bilateral and both parties are bound to perform. Transactions of this kind must be interpreted with common sense and in accordance with the actual usages of humanity.

It is not at all uncommon, especially in professional sports, for a party to offer a promise of a large ''bonus'' to induce the promisee (e.g., a ''star'' player) to sign a specific employment contract. The signature of the promisee to that instrument constitutes the acceptance of the offer, the entire consideration for the offered promise, and the entire performance that is the agreed exchange for the ''bonus'' money. The contract so made should be described as a unilateral contract. Yet, by signing the employment instrument, the offeree has made a promise in writing to render the requested service on the stated terms. The transaction is in truth, a promise for a promise, but observe that although the employer has offered the promise of a ''bonus'' in exchange for the player's promise to play, the offeror has not offered the ''bonus'' itself (the money) in exchange for the performance promised by the player (playing the game). Instead, the employer has offered a promise to pay the ''bonus'' in exchange for the making of player's promise (''entering into'' the bilateral service contract). When the player signed the service contract, the player had performed an act that constituted the full agreed equivalent of the ''bonus'' (the money payment). The player may have never made a promise to perform the act of signing. The ''act'' was indeed a promissory act, but the promised ''bonus'' was the agreed exchange for the act itself, and not for the performance that it promised.n23 That performance (playing the game) was the agreed exchange for the salary promised as its full equivalent. The transaction has a double aspect: (1) The employer made two promises, by each of which the employer was separately bound, the first one being unilateral and unconditional, the second being bilateral and conditional, but (2) the transaction is one transaction, even though the employer made two separate promises, the one oral, to pay the ''bonus'', the other written, to pay the salary, the player accepted both offered promises by doing one act. If we choose to regard this transaction as one complex contract, of two promises for one promise, it can be described as ''bilateral,'' and the written instrument is not a complete and accurate ''integration.'' Such a complex contract must be regarded as a ''hybrid,'' because one of the employer's promises is conditional on nothing but the player's signing, and the employer's second promise (salary) is conditional on the player's playing the game. The player's signing (''entering into'' the service agreement) is certainly a sufficient consideration for the promise of the ''bonus.''n24 It would be indecent for a court to hold that the written service contract purports ''on its face'' to be a complete and accurate ''integration'' and that proof of the collateral oral promise of a bonus is excluded by the ''parol evidence rule.'' The author of this treatise cannot believe that any court would make such a decision.n25

Unilateral contract analysis has been brought to bear upon complex matters involving administrative law. The State of Washington enacted a statute directing a state agency (DSHS) to reimburse hospitals that provided certain kinds of care to the medically indigent by any one of three methods of calculation: two of them involved various cost/benefit formulas; the third was by ''contract.'' Without reference to the two possible formulas, the agency published regulations indicating how such reimbursements would be calculated. It was held that the hospitals, by providing care for the medically indigent with knowledge of the regulations, had entered into unilateral contracts, the regulations being the offer to a series of contracts.n26

Legal Topics:

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

Contracts LawFormationAcceptanceMethods of AcceptanceGeneral OverviewContracts LawPerformanceTender & DeliveryContracts LawTypes of ContractsUnilateral ContractsGeneral Overview

FOOTNOTES:

(n1)Footnote 1. See especially, § 1.23 Unilateral Contracts Distinguished from Bilateral; § 2.29 Revocation after Part Performance by the Offeree; § 2.30 Real Estate Brokerage and Other Agency Cases; § 2.31 Effect of Action in Reliance That is Not Part Performance; § 2.32 Part Performance and the Indifferent Offer; § 2.33 When a Standing Offer of a Series of Separate Contracts is Irrevocable; § 3.5 Knowledge of Offer as a Pre-requisite to Acceptance; § 3.6 Knowledge of the Offer after Part Performance Already Rendered; § 3.9 Unilateral Contract-Acceptance by Beginning Requested Performance; § 3.10 ''Acceptance of a Published Offer'' of a Reward for Action or Contest Prize; § 3.11 When the Words ''I Accept Your Offer'' Would be Ineffective; § 3.12 Acceptance by Forbearance from Action; and §§ 3.13-3.15 (on notice of acceptance.)

(n2)Footnote 2. In Port Huron Machinery Co. v. Wohlers, 207 Iowa 826, 221 N.W. 843 (1928) , the defendant signed a written order directing the plaintiff to ship immediately certain farm machinery and promising to pay a specified price therefor. The plaintiff immediately shipped the goods and the next day received a telegram from the defendant canceling the order. The court held that a contract was made and that the cancellation was ineffective. The court said: ''The law recognizes, as a matter of classification, two kinds of contracts-unilateral and bilateral. In the case at bar a typical example of unilateral contract is found, since it is universally agreed that a unilateral contract is one in which no promisor receives a promise as consideration, whereas, in a bilateral contract there are mutual promises between the two parties to the contract.''

With respect to the form of acceptance, the court said: ''Appellant, however, contends that there was no acceptance of the offer. Words are not the only medium of expression of mutual assent. An offer may invite an acceptance to be made by merely an affirmative answer or by performing a specific act. True, if an act other than a promise is requested, no contract exists until what is requested is performed or tendered in whole or in part. We are here dealing with a unilateral contract, and the act requested and performed as consideration for the contract indicates acceptance as well as furnishes the consideration. The sending of an order for goods to a merchant is an offer of a promise for an act.''

Note that the court did not state that the offeree could only accept by shipment of the goods. On the contrary, an acceptance by express promise to ship or by any other reasonable means would also have created a contract. Today, this conclusion is made explicit in U.C.C. § 2-206.

See further:

U.S. - Hollidge v. Gussow, Kahn & Co., 67 F.2d 459 (1st Cir.1933) .

Ala. - Sturdivant v. Mt. Dixie Sanitarium, Land & Invest. Co., 197 Ala. 280, 72 So. 502 (1916) .

Iowa - Tegler v. Shipman, 33 Iowa 194 (1871) .

Md. - Wheat v. Cross, 31 Md. 99, 1 Am.Rep. 28 (1869) .

Mass. - Commonwealth v. Farnum, 114 Mass. 267 (1873) .

Mo. - Williams v. Emerson-Brantingham Implement Co., 198 S.W. 425 (Mo.App.1917) ; Interstate Folding Box Co. v. Hodge Chile Co., 334 S.W.2d 408 (Mo.App.1960) , actual shipment of goods pursuant to buyer's order held a sufficient acceptance of the buyer's order by the seller.

Tex. - Stufflebeme v. Jack, 253 S.W.2d 459 (Tex.Civ.App.1952) . The seller of a sprinkling system, when notified of defects by the buyer, wrote to the buyer to make the necessary repairs and to send his bill therefor. The buyer made the necessary repairs.

Pa. - Garbracht v. Commonwealth, 96 Pa. 449 (1881) .

Wis. - Sarbecker v. State, 65 Wis. 171, 26 N.W. 541, 56 Am.Rep. 624 (1886) .

Eng. - Fragano v. Long, 4 B. & C. 219 (1825) ; Wood v. Benson, 2 Cr. & J. 94 (1831).

In Sanford v. Brown Bros. Co., 208 N.Y. 90, 101 N.E. 797 (1913) , the buyer's offer was an order to ship nursery stock of specified varieties, and the acceptance was by actual shipment. Some years later, the young peach trees were found to be of other varieties and worthless. The court found that the seller had, by filling the order, made a warranty. Had the trees shipped been exactly as ordered, the defendant's warranty would have been performed as it was made.

An automobile company, by general letter to its dealers, made the following offer: ''We are prepared to offer Packard Dealers a special inducement in return for direct purchase of their scrap cast iron. Therefore, for each ton of scrap gray iron furnished us by a Dealer, one additional Packard car will be allotted to him.'' Packard also promised to pay for such scrap iron at market rates and to pay freight from point of shipment. The plaintiff, a Dealer, shipped 97 tons of scrap iron. Such actual shipment consummated a unilateral contract at point of shipment. Packard Englewood Motors, Inc. v. Packard Motor Car Co., 215 F.2d 503 (3d Cir.1954) .

This section (also § 3.9) is cited in Atlas v. Wood, 33 Misc.2d 543, 226 N.Y.S.2d 43 (1962) , aff'd, 17 A.D.2d 821, 232 N.Y.S.2d 743 . The defendant, real estate broker, in anticipation of commissions to be earned by finding tenants, promised that, if the plaintiff would purchase a certain tract and develop a shopping center thereon he would pay to the plaintiff $10,000 in reimbursement of monies to be expended. The plaintiff purchased the tract and improved it as a ''Center'', spending more than $10,000. The court held that there was sufficient consideration for the defendant's promise, even though the plaintiff made no promise and his action as requested was not a quid pro quo beneficial to the defendant. ''The plaintiff acted upon the promise in the classic unilateral contract situation.''

In Fidelity & Casualty Co. v. Charles W. Angle, Inc., 243 N.C. 570, 91 S.E.2d 575 (1956) , the defendant executed a written contract of indemnity, and in reliance thereon and as requested by defendant the plaintiff executed several contractor's performance bonds. Action was sustained on this indemnity contract even though it had not been signed by the Fidelity company. Its acceptance and assent were amply evidenced by its action in executing the requested bonds. Of course, the bonds were made use of by the contractor for whose benefit they were obtained, as the defendant well knew. No other notice of acceptance by the plaintiff of the defendant's promise of indemnity was necessary for the creation of a contract. See §§ 3.14-3.15. Observe that the contract of indemnity was a unilateral contract, the defendant having requested the act of executing a bond. This bond was itself promissory, but the promise was made to a third party, not to the defendant. The defendant's indemnity promise became a unilateral contract when the requested bond was executed by the plaintiff. The plaintiff's performance bond became a separate unilateral contract with a third party when that party acted in reliance on it by awarding a contract to the contractor named by the defendant.

An offered promise to pay for requested services is found in Wyse v. Refrigeration Sales Corp., 124 N.E.2d 737, 71 Ohio L.Abs. 67 (Ohio App.1955) . The court said: ''The contract was oral, the request to render service was in express terms; but it was for service in an undetermined quantity and consequently was for an indefinite sum. There was then an assent by Wyse when he proceeded to perform the service requested. Such a contract is much like one where a merchant receives a request from a former customer to send to such customer's house a named article of merchandise.'' The defendant was bound to pay reasonable value for the advertising performed as requested by him.

As to the making of a valid brokerage contract, in Cochran v. Ellsworth, 126 Cal. App. 2d 429, 272 P.2d 904 (1954) the court said: ''Ordinarily the 'last act essential to the validity' of a brokerage contract is not the signing of authorization to act. The mere engagement of a broker to dispose of specified property does not create an enforceable contract, for the broker is not obligated to find a purchaser. An enforceable contract does not result until the broker finds one able and willing to buy the property at the authorized price.''

Where the offeree's acceptance by a purchase order was delayed beyond the 30 days prescribed in the seller's offer, it has the effect of a counter-offer incorporating the provisions of the earlier correspondence. The seller's shipment of the goods in pursuance of the purchase order consummated a contract on the terms thereof. Whatever warranties and promises by the seller that were contained in the incorporated letters were again impliedly assented to, and the contract was bilateral. Fire Ass'n of Philadelphia v. Allis Chalmers Mfg. Co., 129 F.Supp. 335 (N.D.Iowa 1955) . The result is not believed to be changed by the enactment of U.C.C. § 2-207, discussed in § 3.37 below.

(n3)Footnote 3.

N.Y. - Quick v. Wheeler, 78 N.Y. 300 (1879) , delivery of lumber.

(n4)Footnote 4.

Kan. - Bauman v. McManus, 75 Kan. 106, 89 P. 15 (1907).

Mo. - American Pub. Co. v. Walker, 87 Mo.App. 503 (1901) .

Neb. - Doolittle v. Callender, 88 Neb. 747, 130 N.W. 436 (1911) .

N.Y. - Sanford v. Brown Bros. Co., 208 N.Y. 90, 101 N.E. 797 (1913) ; Thomas Gordon Malting Co. v. Bartels Brewing Co., 206 N.Y. 528, 100 N.E. 457 (1912) .

(n5)Footnote 5. The Restatement (Second) of Contracts §§ 32, 62 are in accord with the U.C.C. Such an offer, indifferent as to the manner of acceptance is discussed in §§ 2.32 and 3.8 above and in § 3.16 below.

(n6)Footnote 6. Consolidated Freightways Corp. v. Williams, 139 Ga.App. 302, 228 S.E.2d 230 (1976) . This case is noted in § 3.4 above.

(n7)Footnote 7. The requested act may be either the actual arrest of the fugitive or the giving of information that leads to his arrest. Such offers are frequently worded rather indefinitely; they should be interpreted reasonably. Often, acceptance may be either by actual arrest or by the giving of information.

See:

U.S. - Shuey v. United States, 92 U.S. (2 Otto) 73, 23 L.Ed. 697 (1876) , one sum offered for ''apprehension'' and a different sum for ''information''; McClaughry v. King, 147 Fed. 463 (8th Cir.1906) , arrest required.

S.Dak.- Madsen v. Dakota State Bank, 79 S.D. 495, 114 N.W.2d 93, 100 A.L.R.2d 569 (1962) . A reward was offered for the ''apprehension'' of bank robbers. Plaintiff supplied police with the license number of the getaway car. It was held that plaintiff substantially performed and was entitled to the reward.

Tex. - Choice v. Dallas, 210 S.W. 753 (Tex.Civ.App.1919) .

(n8)Footnote 8. The proprietor of a medicine published an offer to pay Ј100 to anyone who should use his medicine as directed and thereafter catch the influenza. In reliance on this, the plaintiff used the medicine and caught the influenza. The use of the medicine was an operative acceptance, consummating a unilateral contract. No notice was necessary. Carlill v. Carbolic Smoke Ball Co., [1893] 1 Q.B. 256 .

(n9)Footnote 9. Where a contestant has complied fully with the conditions on which a prize was promised, an enforceable contract has been made, even though the contestant made no promise:

Ariz. - Shorey v. Daniel, 27 Ariz. 496, 234 P. 551 (1925) .

Cal. - Long v. Chronicle Pub. Co., 68 Cal.App. 171, 228 P. 873 (1924) .

Iowa - Smead v. Stearns, 173 Iowa 174, 155 N.W. 307 (1915) .

Minn. - Mooney v. Daily News Co., 116 Minn. 212, 133 N.W. 573 (1911) .

Okla. - LeFlore v. Reflections of Tulsa, Inc., 708 P.2d 1068, 64 A.L.R.4th 1001 (Okl.1985) . (''Eileen LeFlore was adjudged to have the most beautiful legs in the City of Tulsa.'' The court decision focuses on the remedies available to the contest winner.)

Pa. - Palmer v. Central Bd. of Ed., 220 Pa. 568, 70 A. 433 (1908) , a contract as soon as the competing architect submitted his plans.

In Moreno v. Marbil Productions, Inc., 296 F.2d 543, 544 (2d Cir.1961) , the court said: ''By submitting a postal card entry containing the estimate of the price of the merchandise displayed in each contest, plaintiff accepted the offer and a unilateral contract was created which bound defendants to deliver the prize to the winner. See Corbin on Contracts, §§ 41 [§ 2.21], 1489.''

(n10)Footnote 10. Simmons v. United States, 308 F.2d 160 (4th Cir.1962) , facts stated under § 3.4.

(n11)Footnote 11. In Rome v. Gaunt, 246 Mass. 82, 140 N.E. 242 (1923) , the defendant wrote a letter to a Woolen Mill promising to ''finance your purchases of wool not to exceed $20,000 at any one time, in return for the cash discount of 2% which we understand you can obtain from your wool dealers.'' The Mill showed this to the plaintiff, a wool dealer, and he sold wool to the Mill on credit. The defendant later learned of this sale. It was held that there was a valid contract of guaranty.

In Tarbell v. A.J. Stevens & Co., 7 Iowa 163 (1858) shareholders in a private bank advertised that they were responsible for and would pay the bank-notes previously issued. This led many to receive the notes as current money. The receipt of such notes in reliance on the promise was held an acceptance. ''The defendants must be considered as undertaking to every individual who saw their advertisement, or heard their representations.''

Where three persons sign a writing mutually agreeing to be jointly bound on notes to a bank that might be indorsed by any one of them, the delivery of this writing to the bank and its making loans on such notes in reliance thereon constitute offer and acceptance. See First Nat. Bank v. Doherty, 156 Ky. 386, 161 S.W. 211 (1913) .

Where a partner in business promised another partner to repay to him a share of such expenditures as he might thereafter make, the promise became binding as soon as expenditures were actually made. No notice of acceptance was required. Here, the other partner made expenditures but made no promise to make them, and the transaction made a unilateral contract. Ross v. Leberman, 298 Pa. 574, 148 A. 858 (1930) .

See further:

Mass. - Lascelles v. Clark, 204 Mass. 362, 90 N.E. 875 (1910) ; Lennox v. Murphy, 171 Mass. 370, 50 N.E. 644 (1898) ; Bishop v. Eaton, 161 Mass. 496, 37 N.E. 665 (1894) .

Pa. - Eddowes v. Niell, 4 U.S. (4 Dall.) 133, 1 L.Ed. 772 (1793) .

Eng. -Offord v. Davies, 12 C.B., N.S., 748 (1862).

In Midland Nat. Bank v. Security Elevator Co., 161 Minn. 30, 200 N.W. 851 (1924) , the court approved Bishop v. Eaton and expressly disapproved cases contra. See § 3.14.

(n12)Footnote 12. Rosenthal v. Al Packer Ford, Inc., 36 Md.App. 349, 374 A.2d 377, 96 A.L.R.3d 897 (1977) .

(n13)Footnote 13. See § 3.13, When Notice of Acceptance is Necessary, and the sections hereafter dealing with silence as an acceptance, § 3.18 et seq.

(n14)Footnote 14.

Ky. - Edwards v. Kentucky Utilities Co., 286 Ky. 341, 150 S.W.2d 916, 135 A.L.R. 642 (1941) .

N.Y. - Martin v. New York Life Ins. Co., 148 N.Y. 117, 42 N.E. 416 (1895) , the plaintiff was hired at a salary of $10,000 per year, no definite period being otherwise mentioned. It was held that this was a hiring at will and the defendant was privileged to discharge the plaintiff at any time. The decision was followed in Watson v. Gugino, 204 N.Y. 535, 98 N.E. 18 (1912) .

(n15)Footnote 15. See § 4.2 below.

(n16)Footnote 16.

U.S. - Kerbaugh v. Gray, 212 Fed. 716 (2d Cir.1914) ; Gronlund v. Church & Dwight Co., 514 F.Supp. 1304 (S.D.N.Y.1981) , noted at § 3.11.

Ill. -Similarly, a promise to pay a pension if the employee retires early becomes a unilateral contract where the employee accepts by resigning. Wickstrom v. Vern E. Alden Co., 99 Ill.App.2d 254, 240 N.E.2d 401 (1968) .

N.C. - Roberts v. Mays Mills, 184 N.C. 406, 114 S.E. 530, 28 A.L.R. 338 (1922) .

Pa. - Snyder v. Hershey Choc. Co., 63 Pa.Super. 528 (1916) .

Va. - Twohy v. Harris, 194 Va. 69, 72 S.E.2d 329 (1952) . See also § 153, as to ''mutuality.''

Wash. - Brydges v. Coast Wide Land, Inc., 2 Wash.App. 223, 467 P.2d 209, 43 A.L.R.3d 496 (1970) ; Scott v. J.F. Duthie & Co., 125 Wash. 470, 216 P. 853, 28 A.L.R. 328 (1923) .

Wis. - Zwolanek v. Baker Mfg. Co., 150 Wis. 517, 137 N.W. 769 (1912) . Hyman-Michaels Co. v. Ashmus Equipment Sales Corp., 271 Wis. 82, 72 N.W.2d 742 (1955) , illustrates a unilateral contract created by a promise for a series of performances. A dealer promised to pay a commission of 10% on all orders produced by an agent, the latter making no promise to procure any orders. The dealer's promise was merely a revocable offer as long as no order had been obtained; but the dealer was bound to pay the commission on all orders produced before notice of revocation.

(n17)Footnote 17. In Peters v. Mutual Ben. Life Insurance Co., 420 N.W.2d 908 (Minn.App.1988) , the defendant distributed a handout to its agents indicating by a formula the minimum going concern value an incoming agent would have to pay a retiring agent. This was a binding offer to a unilateral contract. The court wrestles with the problem of consideration but the result could have easily have been reached on promissory estoppel grounds.

(n18)Footnote 18. On brokers' commissions generally, see §§ 2.29-2.31 above.

Iowa -At the owner's request, the broker found a buyer who was willing and able to buy and who signed a contract of purchase but later repudiated. The owner then purported to revoke his offer with the broker and then entered into a substantially similar contract with the buyer, except, as one would expect, a provision for the broker's commission. The broker, it was held, had earned his commission. Cortright v. Pettit, 461 N.W.2d 202 (Iowa App.1990) .

Minn. - Stensgaard v. Smith, 43 Minn. 11, 44 N.W. 669 (1890) .

Miss. - Shemper v. Latter & Blum, 214 Miss. 113, 58 So.2d 359 (1952) , promise of a commission for obtaining a building construction loan, commission not earned by obtaining a loan good only after completion. But owner had no right to damages, because broker made no promise.

N.J. - Hooper v. William P. Laytham & Sons Co., 123 N.J.Eq. 596, 199 A. 51 (1938) .

Where one writes to another promising to pay a commission of 5 percent on all business received through the promisee, all that is necessary to create a valid unilateral contract is to send a customer before any revocation of the offer. No notice of acceptance and no return promise are necessary. Hooper v. Laytham & Sons Co., supra.

One who promises to pay a commission on all business done with any customer who may thereafter be introduced by the promisee becomes bound as soon as such a customer has been introduced, the duty of course being conditional on actual consummation of a business transaction with the customer. British Bank for Foreign Trade v. Novimex, [1949] 1 All Eng. 155.

In Lamb v. Prettyman, 33 Pa.Super. 190 (1907) an agent sued for a commission: ''The counsel for defendant contends that when Prettyman asked Lamb 'to get a deal,' Lamb did not agree to do so and therefore there was no contract. The answer to this is that it was not necessary for Lamb to say in words that he would act; he could make it a contract by performance, and there is evidence that he did procure a party to deal with the defendant. Where acceptance of a proposition is by a promise, it must presently follow the offer and notice of it be given to the other party. But where acceptance is by act, the mere performance of the act, without notice, concludes the contract.'' In accord is In re Lineaweaver's Est., 284 Pa. 384, 131 A. 378 (1925) . Cf. The Gleaner, 240 F. 163 (N.D.Cal.1917) , criticized in 26 Y.L.J. 795.

(n19)Footnote 19. For qualification of this statement, see § 2.30 above.

(n20)Footnote 20. In Marchiondo v. Scheck, 78 N.M. 440, 432 P.2d 405 (1967) it was held that action in reliance by the real estate agent short of full performance can make the vendor's offer irrevocable. The case was remanded for trial of this issue.

(n21)Footnote 21. Where a broker was promised a commission ''to procure a purchaser and to effect a sale'' of a saloon business and stock, a buyer was found and a contract executed in which the purchase was conditional on the obtaining license by the buyer-''if no license should be granted there will be no sale.'' It was held that this did not entitle the broker to a commission, no license having been obtained. Kost v. Reilly, 62 Conn. 57, 24 A. 519 (1892) .

Cases must be distinguished in which an owner merely ''lists'' his property with an agent, making no promise to pay a commission. In such case the owner merely invites the agent to find a buyer on terms that he may himself be willing to accept; he makes no offer to the agent. This situation is rare.

See:

Conn. - Stagg v. Lawton, 133 Conn. 203, 49 A.2d 599 (1946) .

Eng. -Luxor v. Cooper, [1941] A.C. 108.

Also § 2.30 above, Real Estate Brokerage.

(n22)Footnote 22. An offer to leave property by will in return for personal care and service for the rest of the promisor's life may contemplate a return promise to render the care and service as well as the rendition of the service itself. See Davis v. Jacoby, 1 Cal.2d 370, 34 P.2d 1026 (1934) , a promissory acceptance found by implication; Brackenbury v. Hodgkin, 116 Me. 399, 102 A. 106 (1917) , offer irrevocable after part performance, promise could have been implied.

An order for 160,000 copies of an advertising leaflet, to consist of 8 monthly issues of 20,000 each was held to become irrevocable as an offer after one issue had been delivered. The court could easily have found an implied promise by the publisher to furnish the other 7 issues, and it probably would have done so if the publisher had been the one committing the breach. Hollidge v. Gussow, K. & Co., 67 F.2d 459 (1st Cir.1933) .

A written order for 500,000 feet of lumber by the plaintiff, on stated terms, contained this: ''If you cannot deliver as ordered, please advise us immediately.'' The defendant made no reply. Some months later and within the time specified for performance he notified the plaintiff that some carloads were ready. Later he shipped and the plaintiff received 160,000 feet. These facts, with others, justified the jury in inferring a promise by the defendant to fill the entire order. Wood & Brooks Co. v. D.E. Hewitt Lumber Co., 89 W.Va. 254, 109 S.E. 242, 19 A.L.R. 467 (1921) .

Sir Frederick Pollack, in 28 Law Quarterly Review, 100, reviewing Ashley on Contracts, said: ''Some of Prof. Ashley's positions verge on paradox, as when he suggests that the doctrine of consideration may ultimately be devoured by relaxations and exceptions. One or two seem to us really paradoxical, as where he maintains that in a unilateral contract, where a promise is offered for an act requiring an appreciable time for performance, there is no consideration for the promise and no acceptance until the act is completed. If this be so, the promisor may withdraw his offer when the work is all but done, or the promisee may capriciously leave the work half done, and in either case without remedy, unless there be something in the circumstances which can be made to support an action of tort. A carter, for example, who is carrying goods to a wharf to be put on an outgoing ship, may abandon them in the middle of the journey. Both the plain man and the average lawyer will say that, whatever Prof. Ashley's logic may be, the law really cannot be so absurd as that; and they will be right, and, what is more, any rational court before whom such a question is moved will surely find a way to make them so. It might easily be held that acting on a request for an act to be done for reward implies a promise to go through with the performance. At all events it seems to us that the offer is irrevocably accepted by the first unequivocal commencement of the act requested. In fact it does not often happen that a man sets about a job without writing or uttering some kind of word of acceptance. 'All right' is enough. Thus the practical outcome of Prof. Ashley's ingenious exercise may be to convince us that there are fewer unilateral contracts in the world than we supposed.''

In Durasteel Co. v. Great Lakes Steel Corp., 205 F.2d 438 (8th Cir.1953) , where the acceptance relied on by the court was the actual shipment and receipt of some installments of the goods ordered, the contract so made was without doubt bilateral, binding the offeree to fill the remainder of the order.

(n23)Footnote 23. See Alabama Football, Inc. v. Greenwood, 452 F.Supp. 1191 (W.D.Pa.1978) . In May 1974, Greenwood signed to play for three seasons, starting with the 1975 season, for the Birmingham Americans of the World Football League. He received as a bonus the sum of $50,000, with a promise of $25,000 more. His salary was to be $90,000 the first year and more thereafter. The Americans came to be in financial difficulties so that the team's uniforms were seized by the unpaid vendor after the WFL championship game in December 1974. Greenwood canceled his contract. Subsequently, the team folded and its franchise was forfeited to the league. The court rejected a claim by the Americans for restitution of the bonus payments. The consideration for the payments was the signing of the contracts. The court unnecessarily, perhaps, dwelt on the benefit to the defunct team of the publicity engendered by Greenwood's signing.

(n24)Footnote 24. Cases so holding are Lawrence v. Tandy & Allen, Inc., 14 N.J. 1, 100 A.2d 891 (1953) ; Pinole Land Co. v. Baker, 287 F.2d 828 (9th Cir.1961) ; Winslett v. Rice, 272 Ala. 25, 128 So.2d 94 (1960) . These cases are noted under § 132; and see other cases of guaranty contracts there cited. Caplan v. Schroeder, 56 Cal.2d 515, 15 Cal.Rptr. 145, 364 P.2d 321 (1961) , involved this ''bonus'' problem in a land development transaction; it is analyzed and noted at length under § 1131. See also Wilson v. Anderson, 208 Cal.App.2d 62, 25 Cal.Rptr. 105 (1962) , where an owner's signing a written listing contract with a broker was sufficient consideration for the latter's oral promise to split his commission with another broker. This case is stated under § 594.

A ''commitment fee'' contract has aspects similar to those of a bonus for signing a contract. In Paley v. Barton Savings & Loan Ass'n, 82 N.J.Super. 75, 196 A.2d 682 (1964) , certif. denied, 41 N.J. 602, 198 A.2d 446 , a land developer paid $10,000 to the defendant in return for the latter's promise to have $1,000,000 available for one year for the purchase of mortgages given by home owners to the developer, on stated conditions including approval of counsel and of credit standing. No home was ever built and no mortgage ever purchased, but there was no ''failure of consideration'' and no duty to return the $10,000. Note that this differs, however, from the bonus case stated in the text. There the bonus was earned by a unilateral contract and the parties were also bound by a bilateral contract. Here, the commitment fee creates a unilateral contract, but no bilateral contract was ever made, only an option. To the same effect, see Testerman v. Home Beneficial Life Ins. Co., 524 S.W.2d 664, 93 A.L.R.3d 1147 (Tenn.App.1974) .

(n25)Footnote 25. Something close to this, however, occurred in Ensign Painting Co. v. Alfred A. Smith, Inc., 21 Mich.App. 494, 175 N.W.2d 789 (1970) . According to plaintiff, a bilateral oral contract was entered into for the painting, with certain exceptions, of a new structure. Defendant sent a purchase order describing more work than the oral agreement allegedly required. The court held that plaintiff accepted the purchase order by performance, creating a unilateral contract, the terms of which were integrated into the purchase order. Therefore parol evidence was inadmissible. The dissent, summarizing the uncontradicted testimony, is on sounder ground, and was vindicated by a reversal. 385 Mich. 268, 188 N.W.2d 534 .

(n26)Footnote 26. Multicare Medical Center v. State, Department of Social & Health Services, 114 Wash.2d 572, 790 P.2d 124 (1990) (en banc).