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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 2 OFFERS; CREATION AND DURATION OF POWER OF ACCEPTANCE

1-2 Corbin on Contracts § 2.21

§ 2.21 Revocation of General Offer by Publication

When an offer has been published or broadcast to an unlimited number of unidentified persons, a power of acceptance is created in all those who read it or hear it. This power can be terminated by a personal notice of revocation, as in the case of an offer to one specific person. It is impracticable for the offeror to find and to notify all those among the total millions who may have seen or heard the offer. It might have been held, nevertheless, that no other method of revocation would be effective, and that the difficult position in which the offeror is placed is one that offeror has chosen-or, as it was once often said, is due to the person's ''own folly.'' The Supreme Court of the United States, however, had such sympathy with the offeror, who in the case before the Court was the United States, that it saved the offeror from the unfortunate position. The court held that an offer by publication can be revoked by publication and that the power of acceptance is terminated even though some offeree never hears of the revocation and completes the acceptance as originally invited.

The facts of the case were as follows: The Secretary of War issued a proclamation offering a reward of $25,000 for the apprehension of John H. Surratt, believed to be implicated in the murder of Abraham Lincoln. Later he issued a similar proclamation revoking the offer. One Ste. Marie, a zouave in the service of the Papal Government, knew of the original offer, recognized Surratt in the same service, and caused his arrest. This service was rendered by him after the proclamation of revocation was published but wholly without knowledge of it. The court held, as one of the reasons for refusing judgment for the reward, that the revocation was effective.n1 Some of the reasoning of the court is not easy to approve. Consider the following: ''True, it is found that then, and at all times until the arrest was actually made, he was ignorant of the withdrawal; but that is an immaterial fact. The offer of the reward not having been made to him directly, but by means of a published proclamation, he should have known that it could be revoked in the manner in which it was made.'' Why anyone ''should have known'' anything about this rule of law is difficult to see, especially when the rule involved was one that no court had yet laid down. The rule thus applied in favor of the government has been applied in some other cases to published offers of reward made by private persons.n2

Cases are sure to arise requiring a determination of how long the publication of the revocation must continue and how wide must be its distribution. Surely, an offer that has been posted on a bulletin board for a year and seen by passing thousands cannot be revoked instantly by tacking on the same board a notice of revocation that has been seen by nobody.n3 Some have suggested that the revocation should be effective when it has been given ''equal publicity'' with that given to the offer.n4 In the Supreme Court case above, we are not told what the Secretary of War did to cause the widespread publication of the first proclamation, or whether the second proclamation was issued in the same manner. It is highly improbable that the second proclamation actually received as great publicity. It had not the news interest of the first one. Nevertheless, five months had passed from the revocation of the offer and Ste. Marie's participation in the apprehension of Suratt. The rule stated in Restatement (Second) of Contracts § 46 is as follows: ''Where an offer is made by an advertisement in a newspaper or other general notification to the public or to a number of persons whose identity is unknown to the offeror, the offeree's power of acceptance is terminated when a notice of termination is given publicity by advertisement or other general notification equal to that given to the offer and no better means of notification is generally available.'' This differs from the prior formulation in the first Restatement by qualifying the idea of ''equal publicity'' by focusing on equality of advertising.

If revocation by the same medium is impracticable; e.g., the offeree no longer has access to the medium used to promulgate the offer, it has been suggested that a medium of similar scope can be utilized.n5 This seems an appropriate qualification of the rule. What is sought is the fairest and most efficient means of communicating the termination of the power of acceptance. Thus, where a newspaper published a subscription prize contest and subsequently attempted to modify the offered terms by publication in the same paper, it was held that the purported modification, i.e., revocation and renewal on different terms, was ineffective as to participants who had not seen the modified terms, the court deeming that under all the circumstances the modification should have been personally addressed to the agents. This seems an appropriate result as the participants were not very numerous and their names and addresses were known to the offeror.n6 Another perspective on the case, however, must be taken. Inasmuch as the contestants had partly rendered the requested acts of performance, the offer should not be subject to revocation or modification, except to the extent that the offeror had expressly reserved such powers.

Legal Topics:

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

Contracts LawFormationOffersGeneral OverviewContracts LawFormationOffersRevocable Offers

FOOTNOTES:

(n1)Footnote 1.

U.S. - Shuey v. United States, 92 U.S. (2 Otto) 73, 23 L.Ed. 697 (1876) . Pollock says of this case: ''it seems a rather strong piece of judicial legislation.'' Wald's Pollock, Contracts (3d Ed.) p. 23. To the writer it seems no stronger than are many other decisions.

The rules applied in certain other legal systems are reported in I. Rudolph Schlesinger, Formation of Contracts: A study of the Common Core of Legal Systems 112-115, where it is shown that comparison is difficult because of different legal conceptualizations of reward offers in diverse legal systems.

(n2)Footnote 2.

Mass. - Sears v. Eastern R. Co., 14 Allen 433 (Mass.1867) , a railroad can change timetable by giving proper published notice, even though tickets have been bought. In Vantage Point, Inc. v. Parker Bros., Inc., 529 F.Supp. 1204, 1218, 213 U.S.P.Q. 782 (E.D.N.Y.1981) (applying Mass. law), affirmed 697 F.2d 301 (2d Cir.), the court took note of plaintiff's argument that there was an industry-wide custom to evaluate unsolicited ideas and to pay for those it used. It then indicated that if there was such an offer it could only be revoked by equal publication, citing this section of the treatise. This discussion was dictum as the case turned on other factors.

Mo. - Hoggard v. Dickerson, 180 Mo.App. 70, 165 S.W. 1135 (1914) .

Tex. - Lauve v. Balfour, 1 Tex.Civ.Cas. 396 (1879) .

(n3)Footnote 3. In Carr v. Mahaska County Bankers Ass'n, 222 Iowa 411, 269 N.W. 494, 107 A.L.R. 1080 (1936) , it was held that where a bank had offered a reward, for the capture of bank robbers, by tacking up a poster containing the offer, it was not an effective revocation for the cashier to remove that poster. A contrary result appears to have been reached in Lauve v. Balfour, 1 Tex.Civ.Cas. 396 (1879) . Query whether in the Carr case a posted notice of revocation would have been effective. In dictum, the court indicates that it might have been. It is difficult to believe that any bank would post a notice indicating that there was no reward for the capture of someone who robbed the bank.

(n4)Footnote 4. See Sullivan v. Phillips, 178 Ind. 164, 166, 98 N.E. 868, 869 (1912) , where the court said, in dictum, ''The offer of a reward can only be revoked in the manner in which it was made, or in some other manner which will give the revocation like publicity as the offer.''

The rule was recognized in Hoggard v. Dickerson, 180 Mo.App. 70, 165 S.W. 1135 (1914) , where, however, the court ruled that an offer of reward made to a crowd at one location was not revoked by the offeror's making of a different reward offer at another location for apprehension of the same criminal.

(n5)Footnote 5. John Murray, Contracts 108 (3d ed. 1990).

(n6)Footnote 6. Long v. Chronicle Pub. Co., 68 Cal.App. 171, 173, 228 P. 873, 875-76 (1924) . The court said: ''Necessarily ... the several contestants would be required to be in constant touch with the management of the newspaper... The relationships between the parties, considering the population of the city (a city of the sixth class) wherein the newspaper was published and the surrounding circumstances, would be of a very close personal nature. The contestants were not so numerous but that if any changes in the rules of the contest were either contemplated, or had been made by the management, the most natural thing to have been anticipated by each of the parties to the contract would have been an actual notification thereof, rather than the impersonal method of publication in a newspaper.''

An advertiser offering premium coupons with products generally has the power to modify the offer in any detail through the same medium that the original offer was made. Payne v. Lautz Bros. & Co., 166 N.Y.S. 844 (City Ct.1916) , aff'd, 168 N.Y.S. 369 (App.Term) , aff'd, 185 A.D. 904, 171 N.Y.S. 1094 .