CASE BRIEF: Embry V. Hargadine, McKittrick Dry Goods Co.

Chapter 4: Reaching an Agreement (Contract Formation) Section A: The Objective Theory of Assent NAME: Embry V. Hargadine, McKittrick Dry Goods Co. St. Louis Court of Appeals

Page: 290
Comment [T1]: Under the objective theory, the mental assent and intent of the parties is irrelevant (b/c one cannot discover it). The party's intention will be held to be what a reasonable person in the position of the other party would conclude his manifestation to mean. Subjective theory of assent requires meeting of minds, which is difficult to prove because one cannot know one¶s inner intentions and thoughts.

1907

FACTS: y The appellant was contracted to work for the defendant¶s company at a salary of $2,000 per annum. The contract set to expire on December 15, 1903. y The appellant had approached Mr. McKittrick, the president of the company, several times prior to the termination of the contract to discuss re-employment but was always put off. y On December 23, 1903, the appellant said to Mr. McKittrick that it has been 8 days since his employment had lapsed and if Mr. McKittrick wanted to retain him, Mr. Embry must have a contract for another year, or he would quit then and there. y After Mr. McKittrick asked Embry how he was getting along in his department and heard Embry¶s response, he said ³Go ahead, you are alright. Get your men out and don¶t let that worry you.´ Mr. Embry assumed this to constitute a contract. y On February 15, 1904, the appellant received a notice of discontinuation of his employment, to be effective March 1, 1904. y In the trial court, the appellant requested the judge to instruct the jury that the conversation between the D and P constituted a contract. This instruction was refused, but the court gave another instruction, and declaring it made a contract ³if you (the jury) find both parties thereby intended and did contract with each other for plaintiff¶s employment for one year from and including December 23, 1903, at a salary of $2,000 per annum.´ PROCEDURE: The case submitted to court on stipulated facts. The court ruled for the D & the P appealed. The decision of the lower court is not discussed aside from instructions. ISSUE: Did the conversation between P and D constitute a contract of reemployment (assent) on previous terms, irrespective of the intention of Mr. McKittrick? HOLDING: Yes, given this particular case, what Mr. McKittrick said to Embry can be understood by a reasonable man as an assent to the appellant¶s demands for a renewed contract, and hence constitute a contract for re-employment. (The trial court made an error when instructing the jury that in order to return a verdict for appellant not only to find that the conversation occurred as appellant swore, but that both parties intended by such conversation to contract each other for plaintiff¶s employment for a year for $2,000. In other words, the court erred in making the formation of a contract depend on a finding that both parties intended to make a contract. Since P and D coincided as to the terms of re-employment, there was no need for inserting the clause that µif employed for one year from Dec. 13, 1903, was to be paid $2,000«µboth intended¶) REASONING: y Common Law: in Smith v. Hughes, it is said: µif, whatever a man¶s real intention may be, he so conducts himself that a reasonable man would believe that he was assenting to the terms of proposed by the other party, and that other party, upon belief, enters into the contract with him, the man thus conducting himself would be equally bound as if he had intended to agree to the other party¶s terms.¶ y Since the language used by Mr. McKittrick in his conversation to Mr. Embry¶s demand for a re employment contract, that is, ³go ahead, you are alright. Get your men out and don¶t let that worry you,´ can be construed as an assent to the demands, it constitutes a contract. Such an interpretation can be applied only to this case given the language used. The law judges intent thru outward expression. DISPOSITION: The judgment is reversed, and the cause remanded.
CLASS NOTES

Comment [T2]: It is not fact; it is an alleged fact because this fact is what the defendant alleges. So, Facts are transcript of events that are not in dispute. What is alleged is irrelevant. TO PROVE BREACH OF CONTRACT THE D NEEDS TO PROVE THAT THERE WAS NO JUST CAUSE FOR HIS FIRING. In this case, the just cause for breach of contract is not in dispute because Embry is terminated because the department is downsizing. Thus, there is no just cause for firing since downsizing is not a just cause. To proof breach of contract, first need to proof that there was a contract, then proof that he was not fired for a just cause. Verbal contract, implied contract, exists since Embry is employed after the end of contract and since the employer knew he was employed, they agreed implicitly to his employment. Embry would win the case for few days working. He would be paid at pro rata based on the expired contract salary. However, an express contract needs an express renewal. Implied contract has no employment date and requires no just cause to fire the employee of implied contract. If you are in a protected class (black, minority etc), there is not at will contract²at will allows to fire without just cause in implied contract. Comment [T3]: The court instructed jury that even if jury believes Embry¶s facts, the contract requires not Embry¶s but both parties¶ intended to enter into contract. THIS IS THE ISSUE FO THE CASE: does contract require both parties or only one party to agree to a contract. Comment [T4]: Jury instruction is the basis for appeal. A contract exists if in the manifestation of the intent of one party and the reasonable man would believe such manifestation to imply a contract.

Hypo: Suppose that McKittrick wrote a memo to the board after conversation with Embry and said that he did not intend to hire Embry but he did not fire him since they need workers. He also says that the board could fire Embry later on. Would it provide objective evidence of his intent? Yes, but the outcome would have been the same since Embry would not know about it.

Comment [T5]: When Embry gave an ultimatum to be reemployed, hire or I leave, McKittrick said ³go to work.´ In response to ultimatum, such a response is a per se reasonableness. The is the objective contract standard. (What the lower court did by saying that µboth parties intended and contracted¶ refers to subjective contract standard) In such cases, with such facts, the question of fact to ² decide whether a reasonable person would do this² becomes a question of law.

and (2) consideration. economics. philosophy etc).Three dimensions of law: doctrines (rules and principles of law²Restatement 2nd of the Law of Contracts and the Uniform Commercial Code). Pennzoil Chapter 4: Reaching an Agreement (Contract Formation) Section A: The Objective Theory of Assent Page: 295 . In cases where there is no legal rule. which is difficult to prove because one cannot know one¶s inner intentions and thoughts. legal theory tells us what the new rule should be. Formation of a contract requires two basic elements: 1) the mutual assent of the parties and some showing that this assent is the kind that the law will enforce. Assent can be subjective and objective. the existence and terms of the contract are inferred from the conduct of the parties. and theory (consists of rationale or reasons for legal doctrines²public policy. the Restatement is a good authority²it is widely respected²but it is not law. A judicial decision is binding only w/in that state. Subjective theory of assent requires meeting of minds. it is adopted as a law. It supersedes any common law rule that is inconsistent w/ its provisions. it is not covered by UCC. the mental assent and intent of the parties is irrelevant (b/c one cannot discover it). The party's intention will be held to be what a reasonable person in the position of the other party would conclude his manifestation to mean. CASE BRIEF: Texaco v. Yet. By contrast. The Objective Theory of Assent : includes the requirement that there be a ³meeting of minds. In an express contract. UCC is a statute adopted by the legislature of 49 states and is binding on courts. though it may be persuasive in courts of other jurisdiction. If a contractual transaction is not a sale or does not involve goods. The Under the objective theory. In an implied contract. UCC is the movement to harmonize and make uniform the laws of 50 states. facts (actual application of doctrines and its effect on parties and the public in general). the existence and terms of the contract are stated in words or the writings of the parties.´ Mutual assent is usually established by a process of offer and acceptance. and in cases where legal rules conflict. legal theory tells us which one should prevail.

Texaco (D) made an alternative offer to Getty¶s board. 1st Dist. ISSUE: Did the court erroneously instruct the jury in considering the objective intent of parties to assent? HOLDING: No. 1987 FACTS: ‡ Pennzoil (P) and Getty Oil entered into a merger agreement whereby Pennzoil would acquire Getty. P sued D for tortious interference w/ contract.¶ thereby excluding evidence of meeting between only Texaco and Getty. DISPOSITION: Affirmed DISSENT: None CLASS NOTES The significance of this case is that any information that is not publically available to the contracting parties is considered as to have subjective manifestation and cannot be admitted into the case since the court mainly considers objective theory of intent as expressed by parties¶ deeds and words. Jury returned verdict for P & D appealed. Comment [T6]: This part should follow after the last sentence in the reasoning. REASONING: y The court states that the instructions to the jury were given to consider objective manifestation while denying subjective manifestation. The court found that the conversation b/n Texaco & Getty were subjective. the jury instructions were proper in deciding the objective manifestation of intent to assent. whi h would preclude the jury c from considering the evidence of intent. Pennzoil and Getty signed a Memorandum of Agreement and issued a press release. and secret manifestations were properly precluded from consideration. Texaco appealed because it believed that the court should not have included the instructions to jury that they ³should look to the intent of Pennzoil and the Getty as outwardly or objectively demonstrate to each other by their words and deeds.´ Such narrow instructions limits jury¶s consideration of evidence to manifestation of intent made to µeach other. secret manifestations since Pennzoil did not know. Pennzoil Court of Appeals of Texas. Zehmer Chapter 4: Reaching an Agreement Section A: The Objective Theory of Assent Page: 296 . Getty repudiated its agreement with Pennzoil and accepted Texaco¶s offer. CASE BRIEF: Lucy v.NAME: Texaco v.

money.´ Lucy told him that Zehmer change I to we since Mrs. Bank V. Also. DISPOSITION: The judgment is reversed. his undisclosed intentions are immaterial«´ y Rule: When one party manifests an intention to be bound by an agreement. (Specific performance refers to the acquisition of land and not merely damages or money). There is also an intention to enter into contractual relation between P and D). given the written agreement between P and D and the imputed intent to sell the farm. .000 for it.000 complete. (Objective theory of mutual assent) y Given the complexity and detail of the contract. a binding contract will have been created y First Nat. CLASS NOTES A low price.00 to D to bind the deal. which D did not accept. Mrs. a party can be bound to a contract when he/she secretly does not intend to enter into a contract w/ another and fails to disclose his/her intention to the other party. P said ³I bet you would not take $50. upon which another reasonably relies.NAME: Lucy V. and dismissing the bill. Zehmer convinced her it was a joke. (There exists a contract between parties and the P is hence entitled to have specific performance on the contract since there is good faith offer and acceptance. Vol. 71. the D wrote out on the back of a check a contract saying ³I do hereby agree to sell to W. but they are not applicable here. the appellant. REASONING: y Restatement of the Law of Contracts. Not the Meeting of minds. P is entitled to have specific performance. Zehmer replied that he never intended to sell.000 and Lucy said ye The D replied that P did not have the s. Zehmer and asked her to sign. Zehmer Supreme Court of Appeals of Virginia 1954 FACTS: y On the night of December 20.C. an agreement exists between the parties. had come to McKenney and asked Zehmer . Harsh Chapter 4: Reaching an Agreement (Contract Formation) Page: 305 Section B: What is an Offer? Comment [T7]: Reasonable standard is applied to determine the outward expression of the parties' actions. Th P took e the check and gave $5.O. followed by the execution and delivery of the contract. PROCEDURE: The case submitted to trial court on stipulated facts. Thus. During their conversation. Lucy and arranged to take half of interest in the purchase. the defendant. the D was not intoxicated to the extent of being unable to understand the consequences of the instrument he executed. (This is the error of the lower court. The entire conversation took about 40 min or more.) ISSUE: Whether a party can be bound to a contract when he/she secretly does not intend to enter into a contract with another and fails to disclose his/her intention to the other party? HOLDING: Yes. fraud. The law imputes to a person an intention corresponding to the reasonable meaning of his words and acts. Both D and P had a little to drink before and after their conversation. given that D and his wife signed the check. the contract did not mention that the money had to be paid that night. Lucy. v. misrepresentation etc could be reasons against specific performance. Roanoke Oil Co. carried out a 40 or more minute conversation about the deal. The D complied and signed. Also. Lucy the Ferguson Farm for $50. The next day Lucy contacted J.. The lower court found that the complainants had failed to establish their right to specific performance. and the cause remanded. 1952. Eventually. she agreed to sign the back of the check.´ Zehmer asked if he would give $50. This argument went on for a while. Accordingly. CASE BRIEF: Nebraska Seed Co. the law must impute that an intention to sell existed in this case. P¶s attorney reported that the title was satisfactory and P on January 2 wrote to Zehmer to arrange for the closing of the deal. despite his true intentions. On December 31. p. He later went to Mrs.74: ³if the words or other acts of one of the parties have but one reasonable meaning. whether had sold the Ferguson Farm. Zehmer would ahev to sign it too. The court ruled for the D & the P appealed. I. 114: ³we must look to the outward expression of a person as manifesting his intention rather than to his secret and unexpressed intentions. and did not mention that he did not intend to sell his farm. Zehmer claims that since Mr.´ y Mental assent of the parties is not requisite for the formation of contract²undisclosed intentions are immaterial if the word & acts of parties have only one meaning. but the manifestation of mutual assent is the definition of agreement. 169 Va 99.

Public Policy a proposal to negotiate terms shouldn¶t be construed as an offer & agreement b/c it can lead to lawsuit against the proposer if more than one bidder accepts the proposal as offer. Also. As such. Harsh. Knight v. 34 Ia. it often becomes difficult to distinguish an offeror from offeree. Cooley. No binding contract. The trial court rendered a verdict and judgment for . REASONING: y The court found D¶s correspondence to constitute a proposition to trade and bid on his seed as part of the preliminary negotiations.25 per cwt. ISSUE: Does the proposition for trade in preliminary negotiations. y The mere statement of price at which pr-ty is held cannot be understood as an offer to sell. CASE BRIEF: Leonardo v. D didn¶t deliver the seeds. constitute an offer? HOLDING: No. CLASS NOTES Traditionally courts conceive of mutual assent in terms of offers and acceptances. the amount of seeds in sale is not specified. DISPOSITION: The judgment is reversed. the proposition to trade should not be interpreted as an offer to contract.´ The sent out a letter confirming the acceptance of the alleged offer on the same day. D appealed.1. PROCEDURE: The brought the action against D for noncompliance. Preliminary Negotiations NAME: Nebraska Seed Co. Of millet seed «I want 2. ( ) v. In the process. Harsh Supreme Court of Nebraska 1915 FACTS: y The . The letter said ³I have about 1800 bu. Pepsico Chapter 4: Reaching an Agreement (Contract Formation) Section B: What is an Offer? Page: 308 . received correspondence from the D. and not as an offer to sell because the correspondence didn¶t specify if D specifically µoffered to sell¶ but only that he wants $2. For the seed.. demanding judgment in sum of 900. D had proposed to negotiate terms of trade and had to make an offer and not acceptance. if price specified. to initiate negotiate to trade. 218.25 per cwt. This can lead to offeror thinking that the other party was unjustified in thinking that offeror would assent to the bargain and would conclude it. Nebraska Seed Co.

An ad is nothing but an invitation to enter into negotiations. seeking declaratory judgment stating that it had no obligation to the . 1996. CLASS NOTES CASE BRIEF: Empro Manufacturing Co. Chapter 4: Reaching an Agreement (Contract Formation) Section B: What is an Offer? Page: 319 . Pepsico US District Court. 1996 because an ad according to the Restatement is not an offer. featured in the Pepsi Stuff commercial TV promotion. The order form was sent on March 27 and the D on May 7. Afte repeated r request for the jet. the ¶s Oder Form constituted an offer on March 27. writing in the Harriet Jet into it and writing a check for $700. An ad is not transformed intoan enforceable offer merely by s potential o fferee¶s expression of willingness to accept the offer through completion of order form. Frederick Loeser & Co. The D has moved for Summary judgment and it was granted.) Whether an offer has been made depends on the objective reasonableness of the alleged offeree¶s belief that the ad or solicitation was intended as an offer. an advertisement or television commercial does not constitute an offer unless it clearly provides for offer. Ball-co Manufacturing. brought this action seeking specific performance of an alleged offer of a Harrier Jet. v. PepsiCo brought suit in this court on June 17. the commercial is not an offer because an objective.) Finally.000. Preliminary Negotiations NAME: Leonardo v. and 4) traveling to school in a jet is not possible. Under these principles. PepsiCo promotion in 1995-96 advertised various product one could receive for collective certain number of Pepsi points. The Harriet Jet was not in the Pepsi catalog and to redeem merchandise had to fill out the original order form. Commercial is not an offer b/c it requires the offer to a separate writing. Also. which could be obtained either by drinking or by purch asing one point for 10 cents.000.000 points. details acceptance and the language is plain and clear. REASONING: y Restatement 2nd: the general rule is that an ad does not constitute an offer. Thus there is no contract. the commercial did not mention steps a potential offeree would be required to take to accept offer of Harrie Jet (the only step to acceptance was order t form and the jet was not in it. thus. ISSUE: Does a television commercial constitute an offer? HOLDING: No.000. and is not an offer«Lovett v. The commercial said that the Harriet Jet was worth 7. The purchased enough point for the Jet by filling out the order form. no way to accept. DISPOSITION: Motion for Summary Judgment granted. The court found that a reasonable person would not expect the commercial to offer a Jet because 1) it is merely a promotion and exaggeration. Inc. PepsiCo rejected this offer by returning the check. 1996 returned check & rejected submission of the order stating that the jet in the commercial was merely to make it humorous. Leonard. the Catalog.1. reasonable person would not have considered a commercial an offer because it is done to be humorous by dramatizing through exaggerated claims (it¶s merely a jest. given that first 15 points are original. 3) security threat to the public to give jet to a child. 2) costs more than $700. Southern District NY 1999 FACTS: y The .

Ball-co Manufacturing. ISSUE: Did the court erroneously instruct the jury in considering the objective intent of parties to assent? HOLDING: No. Written Memorial Contemplated NAME: Empro Manufacturing Co. Dodds. REASONING: y look to the intent of Pennzoil and the Getty as outwardly or objectively demonstrate to each other by DISPOSITION: Affirmed DISSENT: None CLASS NOTES CASE BRIEF: Dickinson v. Revoking an Offer Page: 319 .2. Chapter 4: Reaching an Agreement (Contract Formation) Section B: What is an Offer? 3. Inc US Courts of Appeal. 7th Circuit 1989 FACTS: ‡ Pennzoil (P) and Getty Oil entered into a merger agreement whereby Pennzoil would acquire Getty. the jury instructions were proper in deciding the objective manifestation of intent to assent. v.

463 1876 FACTS: ‡ On June 10. 25. PROCEDURE: The cause came to hearing before Vice-Chancellor Bacon on Jan. however. the D. thus. June 12. the latter did not accept yet and when wanted to accept. 1876. Allan accepted it first. this would revoke the offer. a memorandum that stated ³I hereby agree to sell to Dickinson«for the sum of 800. No contract. The lower court thought otherwise. it was merely a promise to sell or nudum pactum (bare or naked promise²promise that was not legally enforceable for want of consideration). ¶s agent. Mr. he was informed by Mr. DISPOSITION: Reversed DISSENT: None CLASS NOTES The trial and appellate courts reach different decisions because they do not agree on the form of communication required to inform the offeree that the offer has been revoked before the acceptance. can be offered to other parties unless the person originally offered to accept the offer. Thus. the offer once made. if not accepted at once. signed and delivered to the . Acceptance that Varies Terms²the Mirror Image Rule Page: 336 . Since reserved the time to rethink the offer. 1874.´ While Dickinson contemplated the purchase. Berry. the seller needs to inform him of the sale of pr-ty. 9 o¶clock. CASE BRIEF: Ardente v. ISSUE: Is an offer that specifies the time limit for the acceptance of the offer binding? HOLDING: No.S. Thereupon. If an offer to sell was made to one person but sold to another. The two Ds. 1874. Dodds because it is not an option and because it has no consideration²the contract would be one sided. when Dickinson informed Dodds that he would accept the offer. Horan Chapter 4: Reaching an Agreement (Contract Formation) Section C: What is an Acceptance? 1. which would have become a contract had the accepted it then²at the time offer. REASONING: y The court determined that the document to sell the pr-ty was nothing more than an offer. A contract requires a meeting of two minds at one and that there be a continuing offer to the time of acceptance. 2 Ch. provided that the first had not accepted the offer before the sale. D did not want to sell. was to inform Dickinson of the sale following the sale. it was not a binding contract. The appellate court holds that an indirect communication (knowing thru Berry that D is negotiating with someone else) is sufficient to satisfy the requirement of informing the offeree of the revocation of an offer.NAME: Dickinson v. 1874. Dodds told he that he had sold the pr-ty and already received a deposit for it. Allan and Dodds. Allan. The court held that there is no binding contract in Dickinson v. On June 12. who gave judgment for the . this offer to be left over until Fri. binding only the offeror and not the offeree if the offeror had to wait until after Friday to sell. the court found that Dodds had the right to offer the pr-ty for sale to another person and since Mr. One thing Dodds had to do. Dodds Courts of Appeal. Dickinson knew of the sale from his agent. it was a binding contract for him. the rushed to Dodds¶ residence and left with his mother the letter of acceptance. John Dodds. Dickinson. which Dodds did not receive. that Dodds was offering and agreeing to sell the pr-ty to Mr. revoking an offer. It is impossible to say that there were meeting of two minds since when the D offered to sell to . at 7AM.. P. D. appealed.

Acceptance that varies terms²the mirror image rule. 366 A. a contract was not formed. the judgment appealed from is affirmed and the case is remanded.This is the doctrine of Mirror Image Rule. of RI. UCC. was to inform Dickinson of the sale following the sale. Chapter 4: Reaching an Agreement (Contract Formation) Section C: What is an Acceptance? 3. it was not a binding contract. it is easier to contest the existence of mutual assent to a contract whose terms have been changed by finding that a purported ³acceptance´ wasreally a counteroffer and therefore a rejection of the original offer. ISSUE: Was there a valid acceptance of the defendants¶ offer? HOLDING: No. The Ds filed an answer and a motion for summary judgment. Mr. Thus. it was merely a promise to sell or nudum pactum (bare or naked promise²promise that was not legally enforceable for want of consideration). It is impossible to say that there were meeting of two minds since when the D offered to sell to . the latter did not accept yet and when wanted to accept.l Supreme Ct. which would have become a contract had the accepted it then²at the time offer. Judgment was entered by the court for the Ds. There being no mutual assent. the court found that Dodds had the right to offer the pr-ty for sale to another person and since Mr. this would revoke the offer.d 162 1976 PROCEDURE: Ardente. D did not want to sell. DISSENT: None CLASS NOTES Firm offers²defined on pg 335. The caseabove is a modern rule that asserts the continued validity of the Mirror Image Rule. Before performance. brought action in Superior Court to enforce an agreement between himself and Horans. the Ds. Acceptance by Performance or ³Unilateral´ Contracts? Page: 343 . the . Dickinson knew of the sale from his agent. No contract.NAME: Ardente v. however. Horan FACTS: ‡ dfgh. A contract requires a meeting of two minds at one and that there be a continuing offer to the time of acceptance. REASONING: y The court determined that the document to sell the pr-ty was nothing more than an offer. Carbolic Smoke Ball Co. the issue of mutual assent sometimes turns on whether or not an offeree has accepted. Allan accepted it first. it was a binding contract for him. CASE BRIEF: Carlill v. DISPOSITION: Appeal denied and dismissed. The now appeals. Acceptance: because an offer can be revoked. which is not used when performance indicates the existence of a contract. One thing Dodds had to do. to sell certain real pr-ty. Since reserved the time to rethink the offer.

PROCEDURE: The . Although there is nobody in particular who the offer is made to. Acceptance by Performance or ³Unilateral´ Contracts? NAME: White v. w/ regard to the allegation that the contract is made w/ the world. Corlies & Tifft Court of Appeals of NY. Court of Appeals. whereas unilateral contracts are the ones that result from acceptance by performance. complying w/ the directions of the advertisement. Corlies & Tifft Chapter 4: Reaching an Agreement (Contract Formation) Section C: What is an Acceptance? 3. inserted in the Pall Mall Gazette on Nov 13. an ad in this case is not an offer to negotiate but an offer in itself. Bilateral agreements are the ones that result from acceptance by a promise. £1000 is deposited w/ the Alliance Bank shewing our sincerity in the matter. the difference b/n which is the mode of acceptance. REASONING: y Given that the ad demonstrated the sincerity of its promise thru the deposit of 1000 in the bank. courts have normally distinguished between bilateral and unilateral contracts. Last. brought an action against the D for money on the faith of advertisement. colds. it is a fallacy since it is an offer made to the world and contract exists only with those who accept the offer by performance²distinction b/n contract and offer. proprietors of a medical preparation called the carbolic smoke ball. was attacked by influenza. after having used the ball 3 times a day for two weeks. it was a promise. the court held that anyone who performs the conditions accepts the offer. Yes.´ The . Thus. The trial court found that the was entitled to recover. a lady. 46 NY 467 Page: 358 1871 . With regard to this point. the court found from the nature of transaction that the person who makes the offer gets notice contemporaneously w/ his notice of performance of the conditions. DISPOSITION: Judgment affirmed and appeal dismissed. The D appealed. 1 Q. 1891 the following: ³£100 reward will be paid by the Carbolic Smoke Ball Co. or any disease caused by taking cold.B 256 1893 FACTS: y The D. an offeror may invite the offeree to accept by actually performing the act rather than giving a promise to perform. Carbolic Smoke Ball Co.NAME: Carlill v. The law requires that the party accepting the offer must notify the offeror before accepting it so that there is a meeting of minds. even if there is no notice of acceptance. ISSUE: Did the advertisement constitute an offer or merely a puff? Is there a binding contract if the offer is accepted by performance and w/o the notice of acceptance? HOLDING: Based on the analysis of the text in the ad. CLASS NOTES On rare occasions. there is a binding contract b/n the company and one who accepts the offer by performance. In this area. CASE BRIEF: White v. to any person who contracts the increasing epidemic influenza. the court held that it was a promise.

248 NY 86 Page: 362 1928 . notice is necessary to inform the other party of acceptance since mere performance may not give clear indication of acceptance. in light of the note. Pattberg Court of Appeals of NY. On Sept. which he assented to by signing the same and returning it to the D. the D made changes in their specifications and sent a copy of the same to the for his assent under his estimate. the left the estimate w/ the D. ISSUE: Was a binding contract formed b/n parties. In this case. a builder in the 40th street. there¶s no contract b/c indication of acceptance is necessary even if offer accepted by performance REASONING: y The court held that acceptance through performance is possible and creates a binding agreement if the other party is informed of acceptance w/in a reasonable time. merchants at 32 Dey Street. Pattberg Chapter 4: Reaching an Agreement (Contract Formation) Section C: What is an Acceptance? 3. DISPOSITION: Judgment reversed and new trial ordered CLASS NOTES CASE BRIEF: Petterson v. 28. furnished the . affirming a judgment entered upon a verdict for plaintiff. The brought this action for the breach of contract after the receipt of countermand. The action was for an alleged breach of contract. however. by acceptance thru performance even though there was no indication to the other party of an acceptance? HOLDING: No. 29. as demonstrated by the purchase of lumbar. the D¶s bookkeeper sent a note to stating to begin in 2 weeks. the D wasn¶t informed of acceptance either before or after the acceptance by performance.FACTS: y The D. the commenced a performance by purchasing lumber. w/ specifications for fitting up a suit of offices at 57 Broadway and requested an estimate of the work. 1865. Immediately on receipt of the note and before the countermand (order to cancel) was forwarded. hence. The court charged the jury as follows: was it ¶s duty to go down to Dey Street for notice of assent before commencing the work? PROCEDURE: Appeal from the judgment fo the General Term of the 1st Judicial district. the court held that no binding contract existed because although there was acceptance through performance by the . On the same day. Acceptance by Performance or ³Unilateral´ Contracts? NAME: Petterson v. It can be argued that purchase of lumber could be used for another project. On Sept.

the D wrote to . which was not binding b/c D revoked the offer. 2) If the offeror can say ³I revoke´ before the offeree accepts. Judge Lehman believes that the act that was required to satisfy the requirement of consideration was the completed act of payment since the D agreed for discounted repayment if Petterson repaid the entire sum at once. DISPOSITION: Judgment reversed and complaint dismissed DISSENT: Judge Lehman dissented on the ground that Petterson¶s willingness to accept constituted consideration required for the contract to be binding. however brief the interval may be between two acts. Massasoit Whip Co. The D was the owner of a bond executed by Petterson. Acceptance by Silence NAME: Hobbs v. Supreme Judicial Ct.450 remained unpaid. PROCEDURE: Appeal from the judgment of Appellate Division of the Supreme Court in the 2nd judicial district affirming a judgment in favor of plaintiff entered upon a verdict directed by the court. but before May 31st . On April 4th. y Rule: 1) In case of offers for a consideration. of whose last will and testament the is the executrix. Under the date of April 4. (No consideration was present when D made the offer to Patterson). he told him that the offer was no longer valid b/c he had sold the bond and mortgager to a third party. Massasoit Whip Co. The fact that D used the phrase ³I agree to accept«´ in the note shows that this is an offer which should have been kept since Petterson came to satisfy it. offeror has a right to revoke an offer at any time before acceptance. either by promise or performance. NY. Since Petterson had come to repay the entire sum. It is understood and agreed as a consideration I will allow you $780 providing said mortgage is paid on or before May 31st. When D heard that Patterson came to pay off the mortgage. Thus. acceptance by the doesn¶t constitute acceptance because D revoked the offer beforeacceptance. The contract does not exist because the offeror revoked the offer following Petterson¶s saying that he would like to accept the deal. of MA.FACTS: y Petterson. REASONING: y The D¶s letter to Petterson clearly is a unilateral contract. which was secured by a third mortgage upon the parcel. Since Petterson had not performed yet when he said that there was no offer & the offer was revoked before acceptance by performance.´ On April 25. ³I hereby accept cash for the mortgage which I hold against premises 5301 6th Ave. the performance of the consideration is always deemed a condition. by informing the offeree of his decision. in Brooklyn. Chapter 4: Reaching an Agreement (Contract Formation) Section C: What is an Acceptance? 4. 1924. 1924. there is no escape from the conclusion that the offer is terminated. 194 Page: 368 1893 . CLASS NOTES Comment [T8]: Too Long. which was payable in installments of $250 every three month. make facts one or two sentences and CASE BRIEF: Hobbs v. ISSUE: Was there a valid acceptance of D¶s offer by the that would result in a binding contract? HOLDING: No.. went to the D¶s house to accept the offer. was the owner of a parcel of real estate at 5301 6th Avenue in Brooklyn. 1924. he satisfied the consideration requirement and created a binding contract. 158 Mass. the principal of $5. Patterson made the regular quarterly payment and later.

Netscape Communications US District Ct. It is a general principle that a conduct imports acceptance or assent in the view of the law. then it fails to notify. REASONING: y The court held that if D sees fit. coupled w/ the retention of skins for unreasonable time allow for acceptance. the jury would be warranted to find for the plaintiff. the D had the duty to notify the as to whether he accepts shipments or not. These shipments have been exchanged several times b/n the parties before this issue and the D had accepted them and paid for them. The shipments were fit for business. CLASS NOTES Acceptance by Silence CASE BRIEF: Specht v. and to say nothing.. is not a stranger to him and since there was a standing offer b/n them. the D. silence. Judgment for plaintiff and defendant excepts to an instruction to the jury that whether there was any prior contract. Thus. NAME: Specht v. whether he had agreed to take eelskins or not. it does. Netscape Communications Chapter 4: Reaching an Agreement (Contract Formation) Section D: E-Commerce and Mutual Assent. brought an action against the Massasoit Whip Co. Southern District of NY Page: 370 2001 . Exception overruled ISSUE: Does D¶s silence or failure to respond to the shipment constitute an acceptance of that shipment? HOLDING: Yes. having no reason to suppose that the man who has sent them believes that he is taking them. Given that the D has received the shipments from several times. the .FACTS: y Hobbs had sent to the D a shipment of skins and did not receive notice of acceptance for several months. to recover skins shipped to it and retained by if for several months w/o notice to the . DISPOSITION: Judgment affirmed and exception overruled. since it said nothing. whatever may have been the actual state of mind of the party. PROCEDURE: Hobbs.

and to say nothing. silence. The shipments were fit for business. then it fails to notify. Given that the D has received the shipments from several times. REASONING: y The court held that if D sees fit. . Whether a contract was formed is a question of state law. Exception overruled ISSUE: Does D¶s silence or failure to respond to the shipment constitute an acceptance of that shipment? HOLDING: Yes. the . whether he had agreed to take eelskins or not. since it said nothing. PROCEDURE: Hobbs. the jury would be warranted to find for the plaintiff. the D. coupled w/ the retention of skins for unreasonable time allow for acceptance. brought an action against the Massasoit Whip Co. Thus. the D had the duty to notify the as to whether he accepts shipments or not. having no reason to suppose that the man who has sent them believes that he is taking them. DISPOSITION: Judgment affirmed and exception overruled. to recover skins shipped to it and retained by if for several months w/o notice to the . is not a stranger to him and since there was a standing offer b/n them. Assent may be registered by a click of a computer mouse. whatever may have been the actual state of mind of the party.FACTS: y Hobbs had sent to the D a shipment of skins and did not receive notice of acceptance for several months. These shipments have been exchanged several times b/n the parties before this issue and the D had accepted them and paid for them. It is a general principle that a conduct imports acceptance or assent in the view of the law. Judgment for plaintiff and defendant excepts to an instruction to the jury that whether there was any prior contract. CLASS NOTES Promises become binding when there is a meeting of minds and consideration is exchanged. it does.

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