63 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 2 OFFERS: CREATION AND DURATION OF POWER OF ACCEPTANCE

1-2 Corbin on Contracts Supp. to § 2.13

Supp. to § 2.13 Intention to Affect Legal Relations-Social Engagements, Gentlemen's Agreements, Jests and Sham Agreements

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(A) The following case cites this section:

(1) Catholic Univ. of America v. Bragunier Masonry Contractors, Inc., 139 Md. App. 277, 775 A.2d 458 (2001) . This case involved a construction project in which a contractor agreed to donate a building renovation to the Catholic University of America. A Construction Management Agreement was executed to evidence the amount of the donation, although it was understood between the parties that the contractor would not be billed for the work. Years later, when the contractor's business had collapsed, a masonry subcontractor filed a garnishment proceeding against the university, arguing that the contractor had in effect made a fraudulent transfer to it. Although the case was dismissed based upon a lapsed statute of limitations, the court noted that extrinsic evidence is admissible to show that a particular written paper was never intended as a contract or as the binding record of a contract between the parties.

64 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 2 OFFERS: CREATION AND DURATION OF POWER OF ACCEPTANCE

1-2 Corbin on Contracts Supp. to § 2.14

Supp. to § 2.14 Duration of a Power of Acceptance Created by an Offer

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Supplement to Notes in Main Volume

2. Jackson v. National Action Fin. Servs., 2006 U.S. Dist. LEXIS 50897 (N. D. Ill. 2006) . The plaintiff brought this class action suit against the defendant for an alleged violation of the Fair Debt Collection Practices Act (FDCPA) for sending offers to settle debts for a percentage of the obligation, but requiring acceptance by payment within a specified time. The plaintiff claimed that the defendant later made better offers to members of the class and was willing to settle debts for the same percentages even after the date specified in the offer. The court noted the undisputed fact that the defendant was quite willing to settle for the percentages in its offer within the deadline period. The court then noted that black letter contract law permits an offeror to establish a duration of the power of acceptance. The offer expires when the time for acceptance runs out. The fact that the defendant sent a second settlement offer to class members who did not accept the first offer does not indicate that the time limit on the first offer was false. It simply meant that the defendant decided to make a new offer. The fact that some settlements were made after the deadline in the first offer simply indicates that some members of the class made counter offers that the defendant accepted. The court distinguished Goswami v. American Collections Enterprise, Inc., 377 F.3d 488 (5th Cir. 2004) where an offer to settle debts ''only during the next thirty days'' violated the FDCPA because the defendant was authorized to settle for less at any time. Thus, the statement in the offer was false. There was no ''one time only'' or even a ''limited time offer'' in the defendant's letter. The court held that none of the evidence presented by the plaintiff demonstrated that the deadlines set forth in the defendant's offer were false. The plaintiff's motion for summary judgment was denied and the defendant's motion for summary judgment was granted.

4. In C.G. Schmidt, Inc. v. Tiedke, 181 Wis. 2d 316, 510 N.W.2d 756 (App. 1993) an offeree responded to an offer with an alternative proposal stating that it must be accepted by noon on August 20, 1990, but delivered the proposal after that hour. Contrary to the usual rule stated in the main volume, that the power of acceptance can be created only by the offeror and that statements such as ''this offer must be accepted no later than yesterday'' create no offer, the court held that this counteroffer was at once a waiver of the condition it expressly contained! The court therefore held the creator to have created a power it never intended to create. It should make no difference that in Schmidt the operative document would have constituted a counteroffer rather than an offer. See § 3.35.

7. This section is cited in Lacquement v. Handy, 876 S.W.2d 932 (Tex. App. 1994) . A settlement offer stated that if no response to the offer is made within ten days of receipt of the offer, ''this offer to compromise and settle the claim will be withdrawn.'' The question was whether the settlement offer was a ''time demand'' offer. The court held it was not, since the language did not clearly indicate that the offer would expire automatically without any further action required, if not accepted before the expiration of ten days (''will be withdrawn'').

This section is cited in Thomas America Corp. v. Fitzgerald, 957 F. Supp. 523 (S.D.N.Y. 1997) (applying New York law) (settlement offer ''to remain open for 48 hours'' lapsed after that time and purported acceptance sent after that time was ineffective).