Case: 309

Industrial America, Inc. v Fulton Industries, Inc. (Delware, 1971) pp305-

Facts: 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 agent discovered an ad placed by Fulton Industries stating that Fulton was looking to acquire 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 and said I think I have a firm for you, just like the company you mentioned in your ad. After several discussions, the broker told Fulton the name of the company—Bush Hog. Then, Fulton and Hogbush tried to merge without Industrial’s involvement. Fulton said Industrial was already under a contract to find a company for Bush Hog, and Industrial’s actions with Fulton were encompassed in the activities for Bush Hog, so therefore, there wasn’t a new contract between Industrial and Fulton. Essentially, Fulton argued that there wasn’t a contract between Industrial and Fulton. because Industrial already had a contractual agreement to find a company Issue: Does Industrial have the burden of proving the agent’s subjective intent to accept Fulton’s offer of guaranty in the advertisement? - No. Holding: The supreme court held that plaintiff was also entitled to judgment against defendant holding company because the trial court erred in submitting the issue of subjective reliance to the jury. Reasoning: overt manifestation of assent—not subjective intent—controls the formation of a contract. Restatement § 20: The intention to accept is unimportant except as manifested · In contracts, you can have multiple reasons for doing the action; acceptance of a 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 one has 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 actual knowledge of the offer there is no way that the court will say you accepted the offer Notes You do not need intent to accept. What is the offer to the broker? - that they're fully protected Unilateral 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 have performed anyway. Essentially, he has performed completely both times. In order for fulton to not have to pay commission, they would have had to shown that industrial would have acted anyway (because they were soliciting these ppl for a long time). He wouldn’t have done this without invitation. Subjective intent is not thriving here.

We have a unilateral contract, he had knowledge of the offer, there was full performance - the reason to do it is immaterial. Unilateral contract: · No notice required unless specifically asked for · Acceptance by performance · Knowledge of the offer · Subjective intent doesn’t matter Option contract (like mini contract) -under common law, it is a contract. There is a consideration given in order to keep an option open. Offer cannot be revoked. Offer is to stay open for a particular amount of time. Offeree not bound to accept. UCC - Firm Offers 2-205