Supp. To § 1.22 The Uniform Commercial Code as a Source of Common Law

[Go To Main]

Supplement to Notes in Main Volume

2. U.S.- United States v. Southern Contracting of Charleston, Inc., 862 F. Supp. 107 (D.S.C. 1994) .

Idaho- Pittsley v. Houser, 125 Idaho 820, 875 P.2d 232 (App. 1994) .

Supp. To § 1.23 Unilateral Contracts Distinguished From Bilateral

[Go To Main]

(A) The following cases cite this section or its predecessor:

(1) Aramony v. United Way of America, 28 F. Supp. 2d 147 (S.D.N.Y. 1998) (quoting Corbin) (predicting that the Second Circuit will follow the Third Circuit in ruling that a top-hat pension benefit plan is a unilateral contract). This case is also noted in §§ 2.10 and 4.1 of this supplement.

(2) Asmus v. Pacific Bell, 23 Cal. 4th 1, 96 Cal. Rptr. 2d 179, 999 P.2d 71 (2000) (quoting Corbin). This case is also noted in §§ 5.9 and 5.32 and fully discussed in § 4.2 of this supplement.

(3) Thompson v. Estate of Pannell, 176 Or. App. 90 (2001) . The plaintiff's children attended school in the defendant school district. In June 1995, the plaintiff's daughter's class took a three-day school-sponsored trip to a camp on the Oregon coast. The plaintiff volunteered to act as a chaperone on the trip. At the request of school staff, the plaintiff transported the students' luggage to and from the camp in her van. During the return trip, the plaintiff's van was struck head-on by a vehicle driven by an uninsured motorist. The uninsured motorist was killed, and the plaintiff was seriously injured. In a declaratory judgment action as to available insurance coverage, the plaintiff, relying on the defendant's ''Guidebook for Volunteers''-stating, in part, that ''volunteers are covered by accidental medical and accidental dental insurance while performing on site volunteer service''-claimed that, in denying coverage, the defendant breached an implied contract of accidental medical and dental insurance for school volunteers. The defendant claimed that the plaintiff had failed to allege the amount of coverage allegedly in place for school volunteers, that the coverage extended only to accidental injuries that occurred ''on site'' of school district property, and that such coverage was limited to $5,000 in medical and dental expenses. On this issue, the trial court granted the defendant's motion for summary judgment and the Oregon Court of Appeals affirmed, noting that the implied contract, if any, was in the nature of a unilateral contract, and that the coverage for volunteers was limited to $5,000 for medical and dental expenses. There is no evidence of an implied contract for a greater amount.

(4) Walji v. Met Ctr. NYCTEX, Ltd., 2002 Tex. App. LEXIS 5420 (Tex. App. July 26, 2002) (unpublished opinion). Walji entered into a contract contemplating the purchase of a portion of land under development from the defendant. Walji paid a $117,612 deposit to the defendant and was required to reimburse it for a percentage of engineering and professional fees within ten days of receiving a notice of the amount. When Walji was one day late making the payment, the defendant notified him that it was terminating the contract and retaining his deposit under a provision in the contract. Walji sought a declaratory judgment that the provision was void or an unenforceable penalty and sought the return of his deposit. He argued that the contract was one for the purchase of land rather than an option contract under which the seller's sole remedy was retention of the deposit.

Corbin was cited for the proposition that in a bilateral contract, both parties are promisors and both are promisees. The legal effect of such a contract is that there are mutual rights and mutual duties. An option contract, in contrast, allows a party the discretion to perform or not, i.e. the option holder has an irrevocable power of acceptance which he may or may not exercise solely as a matter of his discretion. In determining that the agreement here was an option contract, the court found that the sole remedy available to the seller in the event of the buyer's default was the retention of the deposit. The explicit language of the contract limited the seller to this remedy. Walji argued that the reimbursement provision was not a term or condition of the option. The court concluded that Walji's payment within ten days of notice was a condition. An option can only be accepted through strict compliance with its terms; anything less is a rejection. Walji rejected the option by failing to meet the condition of timely payment.

(5) Sully-Miller Contracting Co. v. Gledson/Cashman Constr., Inc., 103 Cal. App. 4th 30, 126 Cal. Rptr. 2d 400 (Ct. App. 2002) . This case is fully discussed at § 1.13.

(6) Combs v. International Ins. Co., 354 F.3d 568 (6th Cir. 2004) , reh'g denied, 2004 U.S. App. LEXIS 1954 (6th Cir. Jan. 27, 2004) . The court quoted Corbin's definition of a unilateral contract in holding that a corporate directors' and officers' (D & O) liability policy was a unilateral contract. This case is also discussed in §§ 962 and 988 of the supplement.

(7) Muniz v. GCA Services Group, Inc., et al., 2006 U.S. Dist. LEXIS 52194 (M.D. Fl. 2006) . The court was presented with a choice of law question. After being terminated from his position, as the manager of the defendant's Florida region, Muniz claimed that he was entitled to an earnout incentive based upon an agreement evidenced by two letters. The first was a letter from the defendant to all managers informing them of the earnout. The second was a letter addressed to Muniz informing him that if the goals were met his loan stock would be paid, and he would be provided a $20,000 bonus. The court determined that this contract was unilateral. Citing Corbin, it noted that a unilateral contract analysis is used concerning claims by employees against present and former employers for employment benefits such as incentive payments. A unilateral contract is created upon performance in accordance with the terms of the offer that operates as an acceptance of the offer. The court determined that the terms in the present matter were clear. The letter stated that to benefit from the earnout, the company had to achieve certain profits. Pursuant to the letters, the earnout period began on June 1, 2003 and ended on May 30, 2004. Thus, the court reasoned that the acceptance of the unilateral contract would have occurred on May 30, 2004. On May 30, 2004, Muniz was employed in Florida. Thus, the contract would have been completed in Florida, and Florida law would therefore apply to the earnout incentive contract.