100 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 § 3.22

§ 3.22 Multiple Acceptances

[Go To Supp]

An offer may be so made as to empower a single offeree to accept many times, or to empower many offerees to accept. In the former case, the resulting series of contracts between the two parties may be either unilateral or bilateral, and may be wholly independent of each other or may be related in some way to each other. In the latter case, the contracts resulting from separate acceptances by different offerees will usually be quite separate and independent contracts.n1

Continuing guaranties are common illustrations of the former. ''In consideration of your discounting bills of exchange for Davies and Company, we hereby guarantee for the period of one year the prompt payment of all such bills to the extent of $3,000.'' The discounting of each bill as it is presented is a separate acceptance of this offer, each one creating a new unilateral contract with the guarantor. After each discount, the offer would be converted into a unilateral contract as to that particular bill,n2 but it would remain revocable by notice with respect to subsequent bills.n3

A letter of credit may be addressed to a single offeree, or to any bank or banker, or to whom it may concern. ''To the X Filling Station: If A should ask you to supply gasoline from time to time during the next twelve months, please supply it on thirty days credit. I guarantee payment of A's debts so contracted, not exceeding a total of $2000.''n4 This can be accepted by X by selling gasoline to A many times, but can be accepted by no one else. Here, too, the resulting contracts would all be unilateral and independent of each other. Such a letter of credit, however, may be addressed to any and all filling stations, or to any one of a particular line of stations, just as a traveller's letter of credit is usually addressed to a large number of specified correspondents.

There are also standing offers to manufacture and sell specified kinds of goods at stated prices, in quantities to be fixed by the buyer. ''The Racine Company hereby agrees with F. Hopkins to furnish, during the life of the patent, castings for the patented Hopkins gate, for forty cents per set.'' A succession of orders sent in by Hopkins for specified reasonable numbers of sets of castings would make a series of separate bilateral contracts.n5

A standing offer to pay a specified commission for such orders for goods as the offeree might from time to time solicit and send in, or to pay an agent a stated sum per acre for obtaining oil and gas leases within a designated territory, is accepted repeatedly by sending in orders and negotiating leases. Such acceptances make a series of unilateral contracts; but the offer remains revocable by notice to the agent.n6

A single offer may be made to many separate persons and may require acceptance by all. In Hartman v. Lauchli,n7 two persons promised a conveyance of land if the creditors of a corporation would all agree to an extension of time for payment of their claims. One hundred-sixty-five creditors promptly sent acceptances. One hundred-thirty-six creditors, representing about one third of the debts, did not send acceptances. The corporation became bankrupt. The promise to convey was not enforceable. Not only was the offeror not yet bound, but also the promise of each creditor who had signed was conditional on assent by all the other creditors. The offer requested and required just such conditional promises.

Legal Topics:

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

Contracts LawTypes of ContractsGuaranty ContractsContracts LawTypes of ContractsGeneral OverviewBanking LawBonds, Guarantees & Letters of CreditLetters of CreditContracts LawTypes of ContractsBilateral ContractsContracts LawTypes of ContractsUnilateral ContractsGeneral Overview

FOOTNOTES:

(n1)Footnote 1. Illustrations exist in cases holding that one making a charitable subscription is contracting with all the other subscribers, or that all who make entry into a race, contract with all the others that they will obey the rules of the race, or that an agent in contracting with a principal may also be contracting with all other similar agents.

See § 198, Charitable subscriptions.

N.Y. - Kessler v. A.W. Haile Motor Co., 127 Misc. 413, 217 N.Y.S. 182 (1926) .

Eng. -The Satanita, [1895] P. 255, [1897] A.C. 59; McCannell v. Mabee Maclaren Motors Ltd., 36 B.C. 369 (1926).

In the case of In re Field's Will, 15 Misc.2d 950, 181 N.Y.S.2d 922 (1959) , modified, 11 A.D.2d 774, 204 N.Y.S.2d 947 , a donor subscribed $125,000 toward a specified building, conditional on the raising of $1,000,000 by a certain date, and another $125,000 conditional on the raising of $2,000,000 by a second date. The first condition was fulfilled, and the second condition also if a $750,000 pledge could be counted as part of the required amount. The court held the pledge, considered as collectible, could be considered as part of the amount raised.

In a later proceeding, In re Field's Will, 11 A.D.2d 774, 204 N.Y.S.2d 947 (1960) , the Appellate Division ordered payment of the second $125,000 subscription, holding that the decedent subscriber's own conduct had estopped him (and his executors) from asserting that the condition of his subscription had not been fulfilled.

(n2)Footnote 2. Superior Wire & Paper Products, Ltd. v. Talcott Tool & Machine, Inc., 184 Conn. 10, 441 A.2d 43 (1981) . Talcott bought wire from Superior and resold it to its customers. After its debt rose to $137,500, Superior discussed payment with George Roy, an officer. A few days later Superior received guaranties signed by George Roy, Alan Roy, and Roy Machinery & Sales, Inc. A few months later steel prices fell precipitously. Talcott stopped paying, and notified Superior it was having complaints of defects in Superior's steel wire. The trial judge found a lack of proof of defects and gave Superior judgment against Talcott and the guarantors. The latter appealed, claiming no consideration for their guaranties. Held, affirmed. The court cited, among other authorities, §§ 3.22 and 206, to support its view that there was good consideration in Superior's shipments whether at the time or subsequent to the guaranties.

(n3)Footnote 3.

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

The following are similar continuing guaranty cases:

Conn. - Hartford-Aetna Nat. Bank v. Anderson, 92 Conn. 643, 103 A. 845 (1918) ; Gay v. Ward, 67 Conn. 147, 34 A. 1025 (1895) ; Hotchkiss v. Barnes, 34 Conn. 27 (1867) . But in White v. Reed, 15 Conn. 457 (1843) , a guaranty offer was held to create but a single power of acceptance.

Fla. -In Frell v. Dumont-Florida, Inc., 114 So.2d 311 (Fla.App.1959) the plaintiff, at the defendant's request, extended a ''line of credit not to exceed $10,000'' to a dealer, and the defendant promised to ''guarantee payment of any and all credit granted.'' The court held that this was a continuing guaranty that did not terminate with the first credits up to $10,000 but included later credits so long as the total amount unpaid did not exceed $10,000. Gibbs v. American Nat'l Bank, 155 So.2d 651 (Fla. App. 1963) , cert. dismissed, 170 So.2d 821 (1964) , is similar to Frell.

Ga. - Roberson v. Liberty Nat. Bank & Trust Co., 88 Ga.App. 271, 76 S.E.2d 522 (1953), is an example of a written continuing guaranty of loans to be made to a third party, accepted several times by the making of such loans as requested.

La. - Bonura v. Christiana Brothers Poultry Co., 336 So.2d 881 (La.App.1976) , writ ref'd, 339 So. 2d 26 , application not considered 339 So. 2d 26 . An offer of continuing guaranty of the credit of a corporate debtor was made in 1961 by corporate officers and in response thereto the plaintiff continued to deal with the corporation. In 1973, the corporation became insolvent and plaintiff claimed under the guaranty. The claim was upheld despite the guarantors' claim that a reasonable time had passed. The plaintiff had continuously supplied goods during this twelve-year period. The fact that one of the guarantors had left the business in 1967 made no difference, according to the court. His alleged oral revocation was ineffective under Louisiana law inasmuch as the written guaranty provided that it continued until receipt of a written revocation.

On the general subject of the termination of offers to guaranties by changed conditions, see § 2.20 above.

Mo. - Hoffman v. Franklin County Merc. Bank, 666 S.W.2d 446 (Mo.App.1984) .

N.J. - Grob v. Gross, 83 N.J.L. 430, 84 A. 1064 (1912) . This subject matter is treated in detail in § 2.33.

(n4)Footnote 4.

Ala. - Consolidated Portrait & Frame Co. v. Barnett, 165 Ala. 655, 51 So. 936 (1910) .

Mass. - Vacuum Oil Co. v. Smookler, 282 Mass. 361, 185 N.E. 13 (1933) .

(n5)Footnote 5.

Wis. - Hopkins v. Racine Malleable & Wrought Iron Co., 137 Wis. 583, 119 N.W. 301 (1909) .

Eng. -Great Northern R. Co. v. Witham, L.R. 9 C.P. 16 (1873).

See, also, McGarrigle v. Green, 76 Conn. 398, 56 A. 609 (1904) , agreement between A and B whereby the latter promised to manufacture for A all the hats which he might order construed as mere offer by B inviting series of contracts. A was held to be under no duty to send in orders.

Mo. - Merit Specialties Co. v. Gilbert Brass Foundry Co., 362 Mo. 325, 241 S.W.2d 718 (1951) .

In Jordan v. Patterson, 67 Conn. 473, 35 A. 521 (1896) , an offer in the form of fourteen separate orders for goods, each specifying the type of goods and the dates of delivery and payment, was held, on acceptance, to create a single contract for the delivery of all the goods ordered.

In Christie, Lowe & Heyworth v. Patton, 148 Ala. 324, 42 So. 614 (1906) , defendant wrote: ''We will put on our work any number of teams you care to furnish ... and will pay ... three dollars.'' After plaintiff had furnished a varying number of teams, he was notified to send no more. This was no breach of legal duty.

(n6)Footnote 6.

U.S. - Hazlewood v. Empire Gas & Fuel Co., 268 Fed. 829 (5th Cir.1920) .

Conn. - Strang v. Witkowski, 138 Conn. 94, 82 A.2d 624 (1951) , standing promise to pay a commission of 5% on all orders sent in.

Arnold Joerns Co. v. Roberts, 16 Wis.2d 333, 114 N.W.2d 416 (1962) , oral promise by defendant, with no time limit, to pay a commission to plaintiff for sending ''prospects'' to defendant who should thereafter purchase property or employ defendant to build a house. Plaintiff sent several such prospects and was paid; it then sent 3 more prospects for whom defendant built houses, and defendant refused payment. It is immaterial that plaintiff made no promise to procure or to seek ''prospects.'' The defendant made a continuing offer, and a separate unilateral contract resulted each time the plaintiff sent a ''prospect'' who bought or built. No such contract when made was within the statute of frauds, either as for a sale of land or as incapable of performance within one year. The plaintiff's power would continue until he received notice of revocation.

(n7)Footnote 7. 194 F.2d 787 (8th Cir.1952) , cert. denied, 343 U.S. 978, 72 S.Ct. 1074, 96 L.Ed. 1370 .