A unilateral contract is a contract in which performance is based on the wish, will, or pleasure of one of the parties. A promisor does not receive a promise as consideration for his or her promise in a unilateral contract. A unilateral contract lacks consideration for want of mutuality, but when the promisee performs, consideration is supplied, and the contract is enforceable to the extent performed. An offer to make a unilateral contract is accepted when the requested performance is rendered. A promise to pay a bonus in return for an at-will employee's continued employment is an offer for a unilateral contract which becomes enforceable when accepted by the employee's performance.
At its March sales meeting, the brokerage firm announced a bonus program, which covered the period from January 1 to December 31 of that year, with bonuses immediately payable upon reaching certain sales levels. After achieving the first bonus level, it took several months to receive her bonus. At its September meeting, the firm announced that it would pay its bonuses in March of the following year. In January the agent left the firm's employ. She filed an action for breach of bonus contract after the firm refused to tender her bonus in March. The jury returned a verdict in favor of the agent and the firm appealed.
Is the bonus contract enforceable despite merely being unilaterally offered by the firm?
The court affirmed the verdict, finding that the firm made a unilateral offer, which induced the agent to remain, and that the agent substantially performed by earning a high level of commissions. The firm did not revoke the first offer by making the second offer because the agent had substantially performed on the original offer. Testimony regarding other firms' bonus plans was irrelevant because the firm's offer was not ambiguous.