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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

Supp. To CHAPTER 3 ACCEPTANCE AND REJECTION OF OFFER

1-3 Corbin on Contracts Supp. to § 3.22

Supp. to § 3.22 Multiple Acceptances

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(A) The following case cites this section:

(1) Bruce v. The Fountains at Logan Square, LLC, 2006 Phila. Ct. Com. Pl. LEXIS 374 (2006) . One man was injured and another killed when the scaffolding in an elevator shaft gave way while they were remodeling an elevator at The Fountains, a retirement facility. The Fountains sued Amtech, a subcontractor on the construction job, for failure to name The Fountains as an additional insured on its insurance policy. The following provisions appeared in The Fountains' contract with its general contractor Uniwest: ''The Elevator Contractor shall maintain a comprehensive general liability insurance policy throughout the term of the contract, including completed operations, blanket contractual and broad form property damage in a casualty or liability insurance company acceptable to the owner.'' In addition: ''Insurance shall fully protect ... the Owner ... and any other Owner representatives identified by the Owner, from all loss.'' However, when Uniwest awarded the elevator work bid to Amtech, it forwarded a different agreement that included specific instructions regarding insurance coverage requiring only that Uniwest be named as an additional insured. The court noted that the awarding of the bid to Amtech by Uniwest did not create a contract between Amtech and The Fountains. Nor did awarding of the bid to Amtech bind Amtech to provide insurance for The Fountains. The terms of the subcontract do not specify inclusion of the terms of the original bid specifications, which did contain the provision requiring that The Fountains be named an additional insured. The court cited Corbin for this proposition: ''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.'' The court explained that the bids for the work on the job do not constitute a ''series'' of contracts; rather, the subcontract superseded the bid and the bid specifications. Accordingly, by failing to include a reference to insurance coverage for The Fountains in Uniwest's contract with Amtech, The Fountains could not claim a right to such coverage.

(B) The following case is noteworthy:

(1) Threlkel v. Shenanigan's, Inc., 110 Nev. 1088, 881 P.2d 674 (1994) . The seller of a restaurant financed a portion of the purchase price. The corporate buyer executed a promissory note in favor of the seller and its president. The note was signed by Miller, as President (of the buyer), and by Threlkel, as Secretary/Treasurer. Threlkel's signature appeared just prior to the handwritten notation of his corporate capacity, and his name and corporate capacity were also type-written on the note below his signature. The last sentence of the note, just prior to the signatures of Miller and Threlkel, provided: ''The undersigned do hereby personally guarantee the payment of this note.''

The buyer defaulted on its lease payments and payments under the note, and filed a petition in bankruptcy. The landlord sued the seller and its president for the delinquent lease payments and for failure to surrender the premises. The seller and its president impleaded Threlkel and Miller, alleging that they were personally liable on the note. Although the trial court allowed Threlkel to testify that the parties did not intend for him to be personally obligated on the note, it found his testimony unconvincing and insufficient to overcome the clear intent of the note. Threlkel alone appealed.

The Supreme Court of Nevada noted that § 3-402 of the UCC absolves a signer of personal liability if the signer of the instrument both identifies the principal on whose behalf he is signing and discloses the representative capacity in which he is signing. When, however, the representative signs an instrument stating that the signer ''personally guarantee[s] ... payment,'' Nevada courts hold that § 3-402 does not apply, and the representative is personally liable.

Under general contract law, when an officer signs an unambiguous personal guarantee agreement in his representative capacity only, he is nonetheless personally liable for the guarantee. The court rejected Threlkel's argument that the note he signed contained only a single sentence of guarantee rather than an entirely separate paragraph, and that his single signature could not have bound both himself personally and the corporation as principal.

An instructive case of multiple acceptances by a single person.

Supplement to Notes in Main Volume

7. See also N.F.L. Insurance Ltd. v. B & B Holdings, Inc., 874 F. Supp. 606 (S.D.N.Y. 1995) (consent of all member teams of insurance company was required for any one team to be obligated to perform under contract to fund the insurance company's deficit).