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Industrial America, Inc. v. Fulton Industries, Inc.

Industrial America, Inc. v. Fulton Industries, Inc.

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Published by: crlstinaaa on Apr 08, 2008
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11/25/2012

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Case: Industrial America, Inc. v Fulton Industries, Inc. (Delware, 1971) pp305-309Facts: There was a contract between Industrial America’s agent and Bush Hog,Inc. for the agent to find a merger partner for Bush Hog. At some point, the agentdiscovered an ad placed by Fulton Industries stating that Fulton was looking toacquire a firm that matched Bush Hog’s description, and the bottom of the ad said,“Brokers full protected.” The Industrial broker called up Fulton’s president andsaid I think I have a firm for you, just like the company you mentioned in yourad. After several discussions, the broker told Fulton the name of the company—BushHog. Then, Fulton and Hogbush tried to merge without Industrial’s involvement.Fulton said Industrial was already under a contract to find a company for BushHog, and Industrial’s actions with Fulton were encompassed in the activities forBush Hog, so therefore, there wasn’t a new contract between Industrial and Fulton.Essentially, Fulton argued that there wasn’t a contract between Industrial andFulton. because Industrial already had a contractual agreement to find a companyIssue: Does Industrial have the burden of proving the agent’s subjective intentto accept Fulton’s offer of guaranty in the advertisement? - No.Holding: The supreme court held that plaintiff was also entitled to judgmentagainst defendant holding company because the trial court erred in submitting theissue of subjective reliance to the jury.Reasoning: overt manifestation of assent—not subjective intent—controls theformation of a contract. Restatement § 20: The intention to accept is unimportantexcept as manifested· In contracts, you can have multiple reasons for doing the action; acceptance ofa contract just has to be one of these reasons, however small· In contracts, the test for reason for action is not a subjective test; no onehas to look and see whether the contract is exactly why a party chose to perform.This is an objective test.RULE:· Objective intent is all that is required for the formation of a contract· You can have mixed motivations for the act that constitutes acceptance· You have to have actual knowledge of the offer. If you didn’t have actualknowledge of the offer there is no way that the court will say you accepted theofferNotesYou do not need intent to accept.What is the offer to the broker? - that they're fully protectedUnilateral contract - you have to have knowledge of the contract (Glover)Complete performance can be an acceptance (Carbolic)Need not show subjective intent is a motivating factor in contract formation(Industrial)If subjective intent is not relevant, they needed to show that they would haveperformed anyway.Essentially, he has performed completely both times.In order for fulton to not have to pay commission, they would have had to shownthat industrial would have acted anyway (because they were soliciting these pplfor a long time). He wouldn’t have done this without invitation. Subjectiveintent is not thriving here.

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