Cook v. Coldwell Banker/ Frank Laiben Realty Co.

967 S.W.2d 654 (Mo. Ct. App. 1998)

 

RULE:

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.

FACTS:

At its March sales meeting, a 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 for an agent 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 damages and breach of bonus contract after the firm refused to tender her bonus in March. The jury returned a verdict in favor of the agent. The case was appealed to the Court of Appeals of Missouri.

ISSUE:

Did the second offer revoke the first offer of the brokerage firm?

ANSWER:

No

CONCLUSION:

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. Moreover, the court held that where one party makes a promissory offer in such form that it can be accepted by the rendition of the performance that is requested in exchange, without any express return promise or notice of acceptance in words, the offeror is bound by a contract just as soon as the offeree has rendered a substantial part of that requested performance. The main offer includes a subsidiary promise, necessarily implied, that if part of the requested performance is given, the offeror will not revoke his offer, and that if tender is made it will be accepted. Part performance or tender may thus furnish consideration for the subsidiary promises. Moreover, merely acting in justifiable reliance on an offer may in some cases serve as sufficient reason for making a promise binding. Thus, in the context of an offer for unilateral contract, the offer may not be revoked where the offeree has accepted the offer by substantial performance.

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