Davis v. Jacoby

1 Cal. 2d 370, 34 P.2d 1026 (1934)

 

RULE:

A unilateral contract is one in which a promise is made in exchange for some sort of performance and the commencement of performance binds the promisor, thereby creating the contract. A bilateral contract is one in which there are mutual promises between two parties to the contract; each party being both a promisor and a promisee, the contract being form immediately.

 

FACTS:

Plaintiffs alleged that they and decedent entered into a contract whereby plaintiffs agreed to assist decedent in his affairs and take care of his ailing wife in exchange for an inheritance under decedent's will. Decedent died shortly after, and the evidence showed that plaintiffs did arrive at decedent's home and took care of his wife and other affairs. After decedent's wife died it was discovered that plaintiffs were not mentioned in decedent's will. Decedent's estate contended that the contract was ambiguous and that therefore a presumption of a bilateral contract was applicable.

ISSUE:

Is an agreement for care in exchange for an inheritance considered to be an offer to engage into a unilateral contract?

ANSWER:

No.

CONCLUSION:

Although the legal distinction between unilateral and bilateral contracts is thus well settled, the difficulty in any particular case is to determine whether the particular offer is one to enter into a bilateral or unilateral contract. Some cases are quite clear cut. Thus an offer to sell which is accepted is clearly a bilateral contract, while an offer of a reward is a clear-cut offer of a unilateral contract which cannot be accepted by a promise to perform, but only by performance. Between these two extremes is a vague field where the particular contract may be unilateral or bilateral depending upon the intent of the offerer and the facts and circumstances of each case. The offer to contract involved in this case falls within this category. By the provisions of the Restatement of the Law of Contracts it is expressly provided that there is a presumption that the offer is to enter into a bilateral contract. Section 31 provides: "In  case of doubt it is presumed that an offer invites the formation of a bilateral contract by an acceptance amounting in effect to a promise by the offeree to perform what the offer requests, rather than the formation of one or more unilateral contracts by actual performance on the part of the offeree."

Click here to view the full text case and earn your Daily Research Points.