2.9.10 Unilateral contracts and ‘agreement’

Having looked at the issues surrounding the question of acceptance in unilateral contracts, we can now return to the question of how well such contracts fit with the concept of an ‘agreement’. Is a unilateral contract really anything more than a promise which becomes enforceable on the fulfilment of a condition? Not all such promises are enforceable, of course. A promise by a mother to pay her daughter £500 on her 18th birthday is not enforceable. It is only where the promisee does something at the request of the promisor that the relationship becomes ‘contractual’. A promise by the Smoke Ball Company to pay Mrs Carlill £100 the next time she caught flu would not have been enforceable. It was only because the advertisement was aimed to encourage people to use the company’s smoke ball, and Mrs Carlill had done so that she became eligible for the reward. The question here is whether the mere fact that the promisee does something at the request of the promisor means that there is an ‘agreement’. Although the promisee is responding to the promisor, in ‘reward’ or ‘advertisement’ situations the promisor will know nothing of this until performance is complete. Is it accurate to say that the promisor has an agreement with the promisee in such a situation? The answer is that we can fit this into the overall ‘agreement’ framework by accepting that some agreements will be ‘implied’ or ‘imputed’. As long as we are prepared to accept this ‘fiction’, then the unilateral contract can be treated as falling within the overall classical paradigm of a contract.

Much of the difficulty derives from the insistence by the courts that a unilateral contract must have an offer and acceptance in the same way as a bilateral contract. It might have been better if the courts, recognising that the unilateral contract was not the same as a bilateral contract, had devised a separate set of rules to deal with them. It is arguable that this is what has happened in practice, since a number of the cases involving unilateral contracts (for example, Errington v Errington, Daulia v Four Millbank Nominees, Williams v Carwardine) seem to involve the courts taking a decision based on pragmatism and ‘fairness’ rather than formal and logical application of the rules as they apply to bilateral contracts. As such, it is perhaps an area where doctrine has been a hindrance rather than a help to the development of a coherent set of principles.