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Schott v. Westinghouse Elec. Corp. - 436 Pa. 279, 259 A.2d 443 (1969)

Rule:

Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer. Acceptance of an offer is of course essential to the making of a contract.

Facts:

From 1962 to 1965, defendant Westinghouse Electric Corporation ("Westinghouse") had a formalized suggestion program under which its employees were invited to submit to Westinghouse any suggestions they might have for increasing production and reducing costs. Employees whose suggestions were adopted were paid a cash award. In 1962, plaintiff Harry Schott submitted a cost-savings suggestion, in the manner prescribed by the program, that involved changing the way Westinghouse manufactured certain. Schott submitted the same suggestion in 1963, and it was again rejected. In 1964, Westinghouse essentially adopted Schott's suggestion, but it refused Schott's request for payment of an award. In 1966, Schott filed a complaint against Westinghouse in Pennsylvania, seeking an accounting as to Westinghouse's savings derived from adopting his suggestion and damages equal to 20 percent of those savings. By an amended complaint, Schott asserted claims of breach of contract and unjust enrichment.  The trial court sustained Westinghouse's preliminary objections to the complaint and dismissed the action. Schott appealed.

Issue:

Was Schott entitled to the cash award from Westinghouse's suggestion program under a contract theory?

Answer:

No.

Conclusion:

The state supreme court reversed the trial court's judgment and remanded the matter to that court. The court ruled that Westinghouse rejected Schott's suggestion, and that rejection barred Schott's recovery under a contract theory, not because he was thereby made ineligible for an award under a valid contract with Westinghouse, but rather because, in view of Westinghouse's action, no contract existed between the parties. The court ruled, however, that Schott could be entitled under the unjust enrichment cause of action. It was not clear that as a matter of law, he expected no payment or that the benefit was conferred officiously.

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