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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 § 2.22

§ 2.22 Irrevocable Offers-Meaning of ''Irrevocable''

One who has made an offer to contract with another can, without question, change his or her mind. Even if the offeror has promised not to do so and has been paid for the promise, still the offeror's mind can change. Also, the offeror can communicate the fact to the offeree if the latter is within reach of the post, the telephone, or other media of communication. But it is quite another question whether the offeror can, either by changing his or her mind or by communicating that fact to the offeree, undo what has already has been done and destroy the power that the offer has created in the offeree. As has already been seen, the offeror can do this in the case of an ordinary offer; but there are cases in which the offeror has created a power of acceptance but is powerless to terminate it and to escape from the self-created liability to become bound. Our problem now is to state what offers are irrevocable, what factors make them so, and what is meant by irrevocability. In earlier times, Dean Langdell declared an irrevocable offer to be a ''legal impossibility.'' He wrote that ''It is indispensable to the making of a contract that the wills of the contracting parties do, in legal contemplation, concur at the moment of making it. An offer, therefore, which the party making it has no power to revoke, is a legal impossibility.''n1

Observe that in Langdell's quoted statement he adds the phrase ''in legal contemplation.'' This is pregnant with the admission that the wills of the parties do not have to concur in fact. And it is obvious that if the concurrence of wills can be supplied by a fiction ''in contemplation of law,'' the fiction can be discarded and the law can ''contemplate'' the truth, that concurrence of wills is not necessary.

An offer may be irrevocable in the sense that revocation is physically impracticable or even entirely impossible; that is, the acts necessary to operate as a revocation can not physically be done. The offeror may be legally privileged to do these acts, and the performance of them would effectuate a revocation and terminate the power of acceptance, while at the same time they are not within the offeror's physical capacity. In other words, the offeror has both the privilege and the legal power to revoke, but is unable physically to do it. For example, one who has made an offer by mail to another is suddenly cut off by a flood from all communication with the outside world. Any ordinary offer may become irrevocable in this sense, unless a power of revocation without notice has been reserved. Many an offeror, desiring to revoke, has found that the offeree is too far away, or that the wires are down, the mails too slow, and the offeree without a radio set or functioning facsimile machine.

Secondly, an offer may be irrevocable in the sense that the offeror has made a binding promise not to revoke it and will have to pay damages as a consequence of revoking. If this is all that is meant, the offeror can actually revoke but is under a legal duty not to do so. There is the legal power to terminate the offeree's power of acceptance, without the legal privilege to exercise this power. As we proceed with the discussion, cases of this kind will be presented and analyzed.

Thirdly, an offer may be irrevocable in the sense that by no act can the offeror terminate the offeree's power. Even though the offeror can and does communicate to the offeree the desire to revoke, such communication is legally inoperative as a revocation. The offeree in spite of a notice received, retains the power to consummate and to enforce the contract as the offer originally contemplated. This is irrevocability in its strictest sense, the total absence of legal power. The offeror may be physically able to make the communication or to do other acts; but they simply won't work legally.

We shall now consider some of the factors that make an offer irrevocable in one or both of the last two senses.

Legal Topics:

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

Contracts LawFormationOffersGeneral OverviewContracts LawFormationOffersIrrevocable OffersContracts LawFormationAcceptanceGeneral Overview

FOOTNOTES:

(n1)Footnote 1. Christopher C. Langdell, Summary of the Law of Contracts § 178, also § 4. See also, I. Maurice Wormser, The True Conception of Unilateral Contracts, 26 Yale L.J. 137 (1916); note; Lee, Contract, Jenks Digest of Eng.Civ.Law, 195; Clarence D. Ashley, Contracts § 13.

In Adams v. Lindsell, 1 B. & Ald. 681 (1818), it was said: ''The defendants must be considered in law as making, during every instant of the time their letter was travelling, the same identical offer to the plaintiffs.'' It is obvious fiction to say that the offeror continuously repeats the offer; but it is no fiction that the power of the offeree continues even though the offeror's mind has changed, that the offeree's act of acceptance will induce society to compel performance. See also Boston & M.R. Co. v. Bartlett, 57 Mass. 224, 3 Cush. 224 (Mass.1849) ; Nyulasy v. Rowan, 17 Vict. L. R. 663 (1891) . If an offer were at every instant revocable, these decisions would be wrong, and Cooke v. Oxley, 3 T.R. 653 (1790) would not have been overthrown.

See M.F. Kemper Constr. Co. v. City of Los Angeles, 37 Cal.2d 696, 235 P.2d 7 (1951) .