Case: Parties


Marchiondo v Scheck (1967) 376-380 Plaintiff - Marchiondo (offeree - real estate broker) Defendant - Scheck (offeror - property seller)

Procedural History: Trial dismissed the complaint. Plaintiff appeals (now in New Mexico Supreme Court) Facts: Defendant Scheck offered to sell property to a buyer and agreed to pay Plaintiff Marchiondo (broker) commission based on that sale. The seller revoked the offer, before buyer accepted it. Marchiondo is suing for breach of contract (he wants the commission), where he (broker, offeree) had a unilateral contract with Scheck (property seller, offeror), where offeror's duty to perform was conditional upon performance completion by the offeree, but offeree did not have a duty to perform. Issue: Whether the offeror had a right to revoke his offer to enter a unilateral contract, after offeree had partially performed. - No. Holding: The offeror could not revoke the offer once it was partially performed, or begun. Partial performance is a material fact that must be decided by the jury, so the case was remanded. (Trial court had said that whether or not there was partial performance was immaterial, here is where this court disagreed - this is important; but whether or not there was partial performance is a jury question). Reasoning: Part performance of the offeree of an offer of a unilateral contract results in a contract with a condition. The condition is full performance by the offeree. If offeree partially performed prior to revocation by offeror, then an option contract (or firm offer) was formed, where offeror could not revoke the offer, but also did not have a duty to the offeree until full performance was received. RULE: Restatement § 45: Option Contract Created by Part Performance or Tender (1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it. Notes • In unilateral contract, acceptance is by complete performance. • Here there is partial performance. ○ So, it creates an option contract • Roofing case - part performance ○ Loading the truck considered part performance here, also buying the materials • In determining what partial performance is, court says it depends on situation, and is fact sensitive, it I contextual, you have to look at each case to determine this. • When you have a unilateral action at issue - offer is accepted by complete performance RULE: When you have a unilateral contract, part performance creates an option (makes the offer irrevocable). • It would be unfair to offeree: (this is the concern that this rule addresses) ○ There must be an opportunity for offeree to perform completely • How much time do we give someone if not stated

○ Reasonable amount of time ○ This is contextual - depends on facts what time period is reasonable • Hutchinson Case (that this case relied on) - real estate case ○ This court doesn’t have a problem saying part performance commenced ○ Court probably looked at the real estate business, and the kind of dealings involved here. ○ Court looking at nature of real estate business, and looks at finding of buyers ready willing and able • the exclusive agency argument ○ Def claims that previous cases had exclusive dealings, but this case doesn’t have this ○ But court not concerned with exclusivity they say it doesn’t matter because it is not exclusiveness that deprives the offeror of the right to revoke, but the partial performance of the offeree that does that • Court calls this an option contract with a condition,