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Corbin on Contracts

Copyright 2007, Matthew Bender & Company, Inc., a member of the LexisNexis Group.

PART I FORMATION OF CONTRACTS

TOPIC A OFFER AND ACCEPTANCE

CHAPTER 3 ACCEPTANCE AND REJECTION OF OFFER

1-3 Corbin on Contracts § 3.4

§ 3.4 Motive With Which Offeree Renders Performance

Ordinarily the motive that induces one to offer a reward is the desire to procure the requested performance. Ordinarily, also, the motive that induces someone to render the requested performance is the desire for the reward, knowing of the offered reward. Even in the case of the offeror, however, the desire for the performance may not be the offeror's sole motive, and in the case of an acceptor, the requested service may be rendered from motives wholly other than a desire for the offered reward.

In a well-known English case a reward was offered for information leading to the arrest of a criminal. After having been severely beaten by the criminal in question, one Mary Ann Williams gave the requested information. In one report of this case, it does not appear whether or not Mary knew of the offer when she gave the information, but it does appear that she gave it for other reasons than a desire for the reward. She believed that she was about to die, and she gave the information in order to ease her conscience because she had previously lied about what she knew about the crime, and perhaps to get even with the man who had beaten her or to avoid discomforts in the after-life. The court said that her motives were immaterial and held that she was entitled to the reward.n1 In another report of the case, counsel are said to have admitted that Mary ''must have known of it as it was placarded all over Hereford where she lived.''

We shall not here attack this decision, although some courts have stated a contrary opinionn2 and some persons who have rendered the requested service from other motives than a desire for the offered reward may forbear to seek the reward or even refuse it when tendered.n3 Generally, however, a bargaining contract is explained as the result of mutual expressions of agreement or as requiring the intentional acceptance of an offer. Like other definitions and rules, these are generalizations from the decided cases. They are useful, but they are not consistent with all past court decisions and they do not necessarily control future decisions. Contracts are not always consummated by the machinery of offer and acceptance. If two persons repeat in unison, and in each other's presence, the terms of a contract prepared for them by a third person, they make a valid contract.n4 So also, if two persons simultaneously sign duplicate copies of a proposed contract prepared for them by a third person, they will have a contract. In these cases, no doubt they are consciously expressing mutual assent to the same terms. Usually the motive of each is the desire for what the other gives or promises.n5

In another English case,n6 a manufacturer published an advertisement promising to pay Ј100 to anyone who should use its carbolic smoke ball according to directions for two weeks and thereafter catch the influenza. The plaintiff did as requested and caught the influenza. Judgment was rendered for the Ј100. Without doubt the paramount motive of the offeror was the desire to make sales and receive money. Probably the paramount motive of the plaintiff, the offeree, was to gain immunity from a disease. If the plaintiff attained this chief objective, plaintiff would receive no money at all. That these were the motives of offeror and offeree did not prevent the formation of a valid unilateral contract.

Whatever the motive or motives may be, it is generally asserted that to have a contract there must be mutual expressions of intention to agree upon definite terms. Even this, however is not always true. If one person tenders delivery of a unilateral promise under seal, there is a contract if the promisee receives the document, even not knowing its contents. Also when a debtor makes a new promise to pay a debt barred by the statute of limitations, this promise is a binding contract without any expression of assent by the creditor.n7

In any case, it is certain that in rendering a requested performance it is not necessary that the sole motive of the offeree must be the desire for the offered reward. It need not even be the offeree's principal or prevailing motive. The motivating causes of human actions are always complex and are frequently not clearly thought out or expressed by the actor. This being true, it is desirable that not much weight should be given to the motives of an offeree and that no dogmatic requirement should be embodied in a stated rule of law.n8

The Restatement of Contracts, promulgated in 1932, took the position that: ''If an act or forbearance is requested by the offeror as the consideration for a unilateral contract, the act or forbearance must be given with the intent of accepting the offer.''n9 The rationale was that the performance of an act is ambiguous in that the offeror has no way of knowing whether or not the offeree performed with an intent to accept. The Restatement (Second) takes a position that is more consistent with mixed springs of human conduct. It provides in § 53:

''(2) Except as stated in § 69,n10 the rendering of a performance does not constitute an acceptance if within a reasonable time the offeree exercises reasonable diligence to notify the offeror of nonacceptance. (3) Where an offer of a promise invites acceptance by performance and does not invite a promissory acceptance, the rendering of the invited performance does not constitute an acceptance if before the offeror performs his promise the offeree manifests an intention not to accept.''

The difference in application in the two provisions is illustrated by Industrial America, Inc. v. Fulton Industries, Inc. n11 Plaintiff was a broker, specializing in mergers. Plaintiff was retained by B-H, Inc., and succeeded in becoming the procuring cause of a merger whereby the defendant, Fulton, acquired B-H. Fulton had advertised its interest in acquiring other business and had pledged in these advertisements that brokers would be protected. In considering the liability of Fulton, the court, relying on the provisions of the Restatement (Second), rejected the argument that plaintiff had the burden of proof of its subjective intention to accept the offer of guaranty published by Fulton. No inquiry should be made into the motivation of the offeree absent a disclaimer by the offeree.n12

A similar result was reached in Jennings v. Radio Station KSCS. n13 The plaintiff was a convict and his complaint stated that his only contact with the outside world was the radio and that he regularly listened to the defendant station. The station frequently stated that it played ''at least three [recordings] in a row, or we pay you $25,000. No bull, more music on KSCS.'' The plaintiff on a number of occasions reported to the station that it frequently played three songs, a commercial and then only two songs before the next commercial. It was held that the complaint stated a cause of action. The court deemed that listening to the station was the requested performance.n14 The fact that the plaintiff would listen to the same station regardless of the offer should not bar his claim.

Legal Topics:

For related research and practice materials, see the following legal topics:

Contracts LawTypes of ContractsUnilateral ContractsRewardsContracts LawFormationAcceptanceMethods of AcceptanceGeneral OverviewContracts LawFormationAcceptanceMethods of AcceptanceOvert Acts

FOOTNOTES:

(n1)Footnote 1. Williams v. Carwardine, 4 B. & Adol. 621 (1833). The opinions of the judges were as follows:

Denman, C.J. ''The plaintiff, by having given information which led to the conviction of the murderer of Walter Carwardine, has brought herself within the terms of the advertisement, and therefore is entitled to recover.''

Littledale, J. ''The advertisement amounts to a general promise, to give a sum of money to any person who shall give information which might lead to the discovery of the offender. The plaintiff gave that information.''

Parke, J. ''There was a contract with any person who performed the condition mentioned in the advertisement.''

Patteson, J. ''I am of the same opinion. We cannot go into the plaintiff's motives.''

According to these statements, it is the motive of the plaintiff that is immaterial; nothing is said about knowledge of the offer.

The second report of this case is in 5 Car. & Payne 574, 172 E.R. 1101.

This section (also § 3.5) is cited in Simmons v. United States, 308 F.2d 160 (4th Cir.1962) . The American Brewery sponsored the ''American Beer Fishing Derby'', in which it tagged a specific rock fish (like millions of others) with the name ''Diamond Jim III,'' and let him loose in Chesapeake Bay. It then publicly offered a prize of $25,000 to any person who would catch Diamond Jim and present him to the Company along with the tag and with an affidavit that he was caught on hook and line. With knowledge of the prize offer, but without thought of winning, Simmons went fishing and caught Diamond Jim on hook and line. On discovering the tag, he first ''appropriately marked the happy event'' with his fishing companions, and then presented the fish, tag, and affidavit to the Brewery and received his just reward of $25,000. The Internal Revenue Service then assessed and collected from Simmons a deficiency of $5,230 on his income tax. In this suit to compel a refund, while admitting that the $25,000 prize was ''income'', Simmons argued that it was within an express statutory exemption of prizes and awards given ''in recognition of religious, charitable, scientific, educational, artistic, literary or civic achievement'' and also of money received as a ''gift''. The court held that this prize was not within either exemption. It was not a ''gift,'' because the Brewery's offer was in consideration of specific action by the fisherman. His acts as requested even though not at first motivated by the offer, consummated when fully performed a unilateral contract by which the Brewery was legally bound to pay. Also, the prize was not one for a ''civic achievement,'' the statutory meaning of which was determined in part by the ''legislative history,'' in part by its statutory companions (noscitur a sociis), and in part by the dictionaries. The court cited § 1489 also, on the question of illegality. [The fact that the party paying the money was bound by a contract to pay it shows that he was not making a gift, but the party receiving the money would nevertheless be receiving it as a ''gift'' in the following case: A conveys property to B in return for B's promise to pay $1,000 to A's son C. The son is a ''donee beneficiary'' and receives the money as a ''gift''; but the donor is A, not B.] Observe that in this case the plaintiff was motivated by the reward in returning the fish, but not so motivated in catching it. See also § 3.10.

(n2)Footnote 2.

N.Y. - Reynolds v. Eagle Pencil Co., 285 N.Y. 448, 35 N.E.2d 35 (1941), reversing 260 A.D. 482, 23 N.Y.S.2d 101; Vitty v. Eley, 51 App.Div. 44, 64 N.Y.S. 397 (1900) . To be compared is Braun v. Northeast Stations & Services, Inc., 93 A.D.2d 994, 461 N.Y.S.2d 623 (1983) . The defendant employer posted a notice that read ''NOTICE $5,000 REWARD.'' Elsewhere the notice in print 1/8 the size of the headline, read ''A reward of up to $5,000 will be paid for information leading to the arrest and conviction of anyone robbing this station or attendant on duty.'' An employee who was the victim of a robbery provided information leading to the arrest and conviction of the robber. In holding for the plaintiff, the court stated: ''It is well settled, however, that 'motivation of a person performing the acts required by an offer of reward is immaterial, but consent to the offer is vital.'''

Austl.- R. v. Clarke, 40 C.L.R. 227 (1927) ; see 1 Austl.L.J. 287 (1928). Clarke was arrested for the murder of two policemen. After four days he revealed information implicating two others and exonerating himself. After his release he claimed a reward of Ј1,000 of which he was aware of at the time of his arrest but which was not a motivating factor in inducing him to provide the desired information.

Vitty v. Eley, supra , involved much the same sort of facts as R. v. Clarke. There seems to be much justification for treating self-exculpatory cases differently from the run-of-mill unilateral contract formation cases. They can be distinguished from the general run of cases on the ground that the performances were not voluntary. Sheldon v. George, 132 App.Div. 470, 116 N.Y.S. 969 (1909) . It is perhaps more accurate to say ''the right to claim a reward may be limited by equitable principles,'' including the doctrine of ''clean hands.'' Alexander v. Russo, 1 Kan.App.2d 546, 571 P.2d 350 (1977) .

(n3)Footnote 3. The following item appeared in a newspaper: ''Little Rock, Ark., Dec. 12.-James Howard, convict who killed Tom Slaughter, notorious outlaw, in a communication to Gov. McRae today relieved the state from any and all obligations of paying him the $500 reward offered for the apprehension and killing of Slaughter. Howard declared that when he shot and killed the bandit he did not know that any reward had been offered.''

(n4)Footnote 4. See § 1.12 above.

(n5)Footnote 5. It is rare indeed for a promisor in a bilateral agreement to urge that the motive for promising was something other than the desire for the return performance. Such a motive is, of course, irrelevant. See Hamilton v. Oakland School Dist., 219 Cal. 322, 26 P.2d 296 (1933) , where the school district entered into a compromise agreement with a general contractor with whom a bona fide dispute had arisen. The district sought to renege, unsuccessfully arguing that its sole motive in entering into the compromise agreement was to make certain that the contractor would perform its already existing duty to pay its subcontractors.

(n6)Footnote 6.

Eng. -Carlill v. Carbolic Smoke Ball Co., [1893] Q.B. 256, 62 L.J.Q.B. 257.

(n7)Footnote 7. See Restatement, Contracts, §§ 85-94; Restatement (Second) of Contracts §§ 82-85.

(n8)Footnote 8.

Ga. - Consolidated Freightways Corp. v. Williams, 139 Ga.App. 302, 228 S.E.2d 230 (1976) . Freightways posted a sign offering a reward of ''up to $5,000'' for information leading to the conviction of a thief of company property, telling employees to ''Contact your supervisor or manager.'' Williams, a supervisor, gave such information, but the company refused to pay. The trial court awarded Williams the full $5,000 and the judgment was affirmed. The court cited this § 3.4 to show that Williams' admission that he was not thinking of the reward at the time of recovery was irrelevant to his recovery.

Iowa - Schlosser v. Allis-Chalmers Corp., 86 Wis.2d 226, 271 N.W.2d 879, 884-885 (1978) , collecting Iowa cases and adopting the terms of Restatement (Second) of Contracts § 53.

N.J. -In Klockner v. Green, 54 N.J. 230, 254 A.2d 782 (1969) , plaintiff admitted that he would have taken care of his stepmother even without her promise to leave him her estate on her death. The court held, citing this section, that the motive which induced Klockner to perform the contract was immaterial. Substantially to the same effect is Ballard v. Schoenberg, 224 N.J.Super. 661, 541 A.2d 258 (App.Div.1988) , cert. denied, 113 N.J. 367, 550 A.2d 473 .

(n9)Footnote 9. Restatement of Contracts § 55 (1932).

(n10)Footnote 10. Section 3.15 deals with acceptance by silence and by conduct.

(n11)Footnote 11. 285 A.2d 412 (Del.1971) .

(n12)Footnote 12. See Cobb v. Texas Distributors, Inc., 524 S.W.2d 342 (Tex.Civ.App.1975) ; Restatement (Second) of Contracts § 53(3) and comment c thereto.

(n13)Footnote 13. 708 S.W.2d 60 (Tex.Civ.App.1986) , appeal after remand, 745 S.W.2d 97 .

(n14)Footnote 14. Query whether this was the requested performance. Arguably the offer challenged the listener to disprove the station's boast that it maintained a certain policy.