51 Of 174 documents

Corbin on Contracts

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

CHAPTER 2 OFFERS; CREATION AND DURATION OF POWER OF ACCEPTANCE

1-2 Corbin on Contracts § 2.32

§ 2.32 N1 Part Performance and the Indifferent Offer

[Go To Supp]

For a considerable period of time it was believed that any offer had to be characterized either as an offer to a bilateral contract or to a unilateral contract, although it was recognized that clever draftsmanship could be employed to create a hybrid.n2 If the offer was not clearly designed to lead to acceptance by performance or by promise, the Restatement (First) of Contracts took the position that it could be accepted only by a return promise.n3 In the second half of the twentieth century it came to be recognized that it was not so much clever draftsmanship that needed to be dealt with realistically, but indifferent draftsmanship. Tens of thousands of law students have been asked to analyze the possible results, as well as the precise holding, in the case of Brackenbury v. Hodgkin. n4 Mrs. Hodgkin, a widow and mother of six children, living in Maine, sent a letter to her daughter and son-in-law, the Brackenburys, who were living in Missouri. The precise wording of the letter does not appear in the opinion. The substance was that if they ''would move to Lewiston, [Maine], and maintain and care for Mrs. Hodgkin on the home place during her life, and pay the moving expenses, they were to have the use and income of the premises....'' The letter closed, by way of postscript, with the words, ''you to have the place when I have passed away.'' In response, the Brackenburys moved from Missouri to Maine and commenced performance of the contract. Within weeks, the relations of the parties became troubled and litigation ensued. It was held that the parties were bound by a contract. Relief in the nature of specific performance was granted the Brackenburys.

One could argue that Mrs. Hodgkin's offer was to a unilateral contract, the performance of which was moving to Maine and accomplishing the yet incomplete task of taking care of the offeror for life. Under this interpretation of the offer, the offer could be regarded as having become irrevocable by part performance.n5 There is another interpretation, which is more consistent with the court's opinion. The offer was to a unilateral contract, the performance of which was moving to Maine, the further acts of taking care of Mrs. Hodgkin being merely conditions to earning the continuing right to stay on the premises and to have them after her death. A third possibility is that the offer was to a bilateral contract and the plaintiff's conduct manifested acceptance.n6

The difficulty of determining into which of these three categories the facts should be placed becomes understandable if we consider the unlikelihood that Mrs. Hodgkin gave, or more importantly, manifested any thought about what she wanted by way of an acceptance of her offer. Certainly, she expressed her wishes to receive services for life, but how plausible is it that she expressed any wishes as to how she wanted the offer accepted? Non-lawyers rarely think in terms of what kind of action they desire to mark the creation of a contract. If such lack of thought or expression of thought was lacking in this case, the offer should be regarded as an ''indifferent'' offer. If this truly describes the offer, according to the Restatement (Second) of Contracts, the offer can be accepted by promise or by performance.n7 Where the offeree has this choice of modes of performance, commencement of performance or a tender of it operates as a promise to render complete performance: a bilateral contract is created.n8

These rules formulated in the Restatement (Second) followed the guidance of the Uniform Commercial Code. Section 2-206 of the Code provides:

(1) ''Unless 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 the 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.

This Code provision is designed to allow for greater flexibility in the offer and acceptance process. Without destroying the principle of the offeror's mastery over the offer, it creates a presumption that the offeror is indifferent as to the appropriate form of acceptance. Therefore, the offeror who has a firm idea of what form the acceptance must take, has the burden of unambiguously manifesting this idea. If not, the offeree may choose the manner of the acceptance.

Subdivision 1(b) gives a concrete application of the general rule expressed in 1(a). If the offer consists of an order for the prompt or current shipment of goods, the seller may accept by a prompt promise to ship or by an actual shipment. This is believed to be consistent with ordinary commercial understanding.n9 Subdivision 1(b) is not totally inclusive, however, as the general principle stated in 1(a) is not undercut by the specific illustration in 1(b). For example, the contract may be created by the commencement of performance such as by preparing the goods for shipment.n10

Note that whether the seller accepts the indifferent offer by action or by words, a bilateral contract is formed. Thus, the shipment of non-conforming goods can be at once the acceptance of the offer and the breach of the contract.n11 The seller can, however, ship substitute goods, including goods of a lesser quality, as a counteroffer, rather than as an acceptance and breach. But to accomplish this, the seller has the burden of notifying the buyer that the substitution is offered as an accommodation. Of course, the buyer need not accept the accommodation.

The acceptances discussed in this section are also the subject of § 3.8 and 3.23 below. The major theme of this part of the treatise is the effect of the commencement of performance. Under the provisions of the Restatement (Second) and U.C.C. § 2-206, commencement of performance that unambiguously indicates a commitment to the deal by the offeree creates a bilateral contract. The commencement, however, may not come to the attention of the offeror. Unless the offeror is notified by the offeree of the acceptance, or otherwise learns of the offeree's actions, the offeror may treat the offer as having lapsed. In other words, a contract has been formed on commencement of performance, subject to a condition that notice be given within a reasonable time. Because the condition is for the sole protection of the offeror, it is waivable by the offeror.

Legal Topics:

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

Contracts LawSales of GoodsForm, Formation & ReadjustmentFormationOffer & AcceptanceContracts LawPerformancePartial PerformanceGeneral OverviewContracts LawTypes of ContractsBilateral ContractsContracts LawTypes of ContractsUnilateral ContractsGeneral Overview

FOOTNOTES:

(n1)Footnote 1. Former § 52: ''Fiction of an Implied Promise Making the Contract Bigrteral,'' has been consolidated into § 2.31 of the present edition.

(n2)Footnote 2. For example, an offer may be drafted with the following effective language: ''this agreement shall become binding only upon written acceptance thereof or upon complete performance of the work.'' By its written commitment the offeree pledges performance of the requested act. A bilateral contract is formed. By completely performing the work, a unilateral contract has been made. As discussed in § 2.29 above, part performance will make the offer irrevocable.

If the offer provides ''this agreement shall become binding only upon written acceptance hereof by the home office or upon commencing performance of the work,'' the offer is to a bilateral contract. Commencement of performance, by the terms of the offer, creates the ''binding'' contract. See Ever-Tite Roofing v. Green, 83 So.2d 449 (La.App.1955) .