171 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

Supp. To CHAPTER 4 INDEFINITENESS AND MISTAKE IN EXPRESSION

1-4 Corbin on Contracts Supp. to § 4.11

Supp. to § 4.11 Mistake in Transmission of Messages

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(A) The following case cites this section:

(1) Donovan v. RRL Corp., 26 Cal. 4th 261, 109 Cal. Rptr. 2d 807, 27 P.3d 702 (2001) . This case is fully noted at § 2.2 of this supplement, and is also noted at § 2.4 of the supplement and in §§ 28.39 and 28.40 in Volume 7 of the treatise.

172 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

Supp. To CHAPTER 4 INDEFINITENESS AND MISTAKE IN EXPRESSION

1-4 Corbin on Contracts Supp. to § 4.12

Supp. to § 4.12 Objective and Subjective Theories

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(A) The following case cites this section:

(1) Chase v. Scott, 38 P.3d 1001 (Utah App. 2001) . After inspecting only a small portion of a parcel of land, the plaintiff received plats from the developer which he provided to a design company, which warned the plaintiff that it would be difficult to build a home on the lot. The plaintiff contracted to purchase the lot and later discovered the slope of the lot was not as he had assumed. The contract contained a clause stating, ''in the event of litigation or binding arbitration to enforce this contract, the prevailing party shall be entitled to costs and reasonable attorney fees.'' The plaintiff's action for rescission resulted in a judgment of involuntary nonsuit and dismissal. The defendants' claim for attorney fees and costs was resisted by the plaintiff, who argued that his action was not litigation to enforce the contract, as the contract had already been performed and the consideration had already been paid. Rather, it was an action to rescind the contract, thus making the provision for attorney fees and costs inapplicable. The court (quoting Corbin at § 4.12) was unpersuaded since ''the reasonable expectations of the parties are to be effectuated.'' The court held that the defense to the rescission action was litigation to enforce the contract. The recovery of attorney fees was, therefore, proper. The court also considered whether ''costs'' should be limited to those described in an applicable rule of procedure, holding that the trial court had discretion to award costs beyond those described in the rule and such costs were more in keeping with the contractual provision.

(B) The following case cites the predecessor to this section:

Frickey v. Jones, 280 Ga. 573, 630 S.E. 2d 374 (2006) . Frickey was the cause of a motor vehicle collision that seriously injured Jones. Frickey's liability insurer, State Farm Mutual Automobile Insurance Company (''State Farm''), wrote to Jones' attorney requesting information as to Jones' medical records so that State Farm could tender its policy limit of $100,000. Jones' attorney did not respond to this correspondence. Thereafter, Jones' attorney sent State Farm a demand letter to settle all claims against Frickey and State Farm for the policy limit of $100,000. State Farm responded stating it was willing to tender $100,000 as full settlement of all claims ''upon receipt of the fully executed release enclosed. Obviously, payment is complicated by what appears to be a Grady Hospital lien as well as potential liens by your client's health carrier. Please advise ... of the status of these liens.'' Jones' attorney thereafter withdrew his offer to settle because State Farm refused to tender the policy limits available without putting certain conditions on the settlement including suggesting that the client execute a release prior to the receipt of settlement funds and indicating it would not tender the settlement check until all potential liens or claims for reimbursement have been resolved. Correspondence continued between the parties, but Jones' attorney adhered to his position that the settlement offer had been withdrawn. Eventually, Frickey filed a motion to enforce an alleged settlement agreement between the parties. The trial court granted the motion, but the intermediate appellate court reversed. The state supreme court looked to various letters exchanged by the parties to determine if a settlement occurred. The court relied on Corbin's explanation that courts were free to consider extrinsic evidence such as the circumstances surrounding the making of the contract including correspondence and discussions. The court determined that State Farm's response to Jones' offer required an additional act to accept Jones' offer to settle for the policy limits-the resolution of all actual and potential liens of health care providers. The court therefore determined that State Farm's letter constituted a counter offer and no binding agreement was formed. This case is also cited in § 577.