1L Contracts Question: "Substantial performance"

(Study Tips, Dealing With Stress, Maintaining a Social Life, Financial Aid, Internships, Bar Exam, Careers in Law . . . )
User avatar
omnomnom
Posts: 37
Joined: Tue Oct 20, 2009 1:18 am

1L Contracts Question: "Substantial performance"

Postby omnomnom » Fri Sep 10, 2010 6:04 pm

I'm positive 'substantial performance' in a unilateral contract refers to the work offeree has completed versus how much they have done, but I'd like to hear thoughts on a hypo:

A says to B "I will pay you $100 to walk from here to the end of the block." Assume there is an imaginary line that perfectly represents a substantial performance, and anything before that line is not a substantial performance. B starts walking to the end of the block, and fully crosses the line. Suddenly, a strong gust of wind knocks him completely behind the line. B gets up and continues what he was doing, but A runs up and revokes his offer before B can cross the line again. Can B recover?
EDIT: Was A's offer revocable at that point?

dakatz
Posts: 2460
Joined: Sat Mar 29, 2008 4:19 pm

Re: 1L Contracts Question: "Substantial performance"

Postby dakatz » Fri Sep 10, 2010 6:26 pm

It depends (as is commonly the case). Typically, when the offeree's performance has caused him no expense or hardship, as is the case here, the offer can be revoked anytime before the performance is complete. Did A see B cross the line and try to take advantage? Or did A just happen to look up when B was just before the finish line after getting blown back?

In situations where there is expense and hardship on the offeree (ex. I will pay you $100 to paint my fence, and the fence is now half-painted by the offeree), the offer cannot be revoked once the performance is at least partially complete. Of course, there is murky water in determining how much expense and hardship would allow partial performance to suffice to guarantee that the offer cannot be revoked.

If walking down the block cost the kid no expense or hardship, then there is no substantial performance line. The offer can be revoked at any time. And if he incurred extensive hardship to do it, he might only have to begin the task in order to guarantee himself a chance to finish it. It is a balancing test.

User avatar
omnomnom
Posts: 37
Joined: Tue Oct 20, 2009 1:18 am

Re: 1L Contracts Question: "Substantial performance"

Postby omnomnom » Fri Sep 10, 2010 6:36 pm

dakatz wrote:Typically, when the offeree's performance has caused him no expense or hardship, as is the case here, the offer can be revoked anytime before the performance is complete.


Offeree forgoes his legal right to not have to walk to the end of the block, if you're referring to want of consideration. I'm more interested in what a substantial performance is than the actual outcome.

dakatz wrote: Did A see B cross the line and try to take advantage? Or did A just happen to look up when B was just before the finish line after getting blown back?

Not the finish line, it was the "line of substantial performance." And why does it matter if they were acting in good faith, assuming the contract terms are clear to an objective reader?

User avatar
omnomnom
Posts: 37
Joined: Tue Oct 20, 2009 1:18 am

Re: 1L Contracts Question: "Substantial performance"

Postby omnomnom » Fri Sep 10, 2010 6:40 pm

dakatz wrote:If walking down the block cost the kid no expense or hardship, then there is no substantial performance line.

In that case, let's say he had to walk from New York to Baltimore

dakatz
Posts: 2460
Joined: Sat Mar 29, 2008 4:19 pm

Re: 1L Contracts Question: "Substantial performance"

Postby dakatz » Fri Sep 10, 2010 6:44 pm

omnomnom wrote:
dakatz wrote:If walking down the block cost the kid no expense or hardship, then there is no substantial performance line.

In that case, let's say he had to walk from New York to Baltimore


Again, it is just a balancing test for a court to decide. If he has taken 2 steps from New York and incurred no expense or hardship, then the offer is free to be revoked. Two steps from the completion of his journey, he would have incurred great hardship, so the offer couldn't be revoked at that point. It isn't a hard line of "substantial performance" since the idea is so subjective and courts will go different ways on this. It all depends on the expense and hardship suffered by the offeree at the point of revocation.

If you want to assign an actual definition to "substantial performance", it would just be the point at which a court is likely to find that the expense incurred by the offeree warrants protection of the law against rescission of the offer.

User avatar
omnomnom
Posts: 37
Joined: Tue Oct 20, 2009 1:18 am

Re: 1L Contracts Question: "Substantial performance"

Postby omnomnom » Fri Sep 10, 2010 8:33 pm

Thanks, you both raise good points.

User avatar
Bustang
Posts: 439
Joined: Wed Jun 10, 2009 4:26 pm

Re: 1L Contracts Question: "Substantial performance"

Postby Bustang » Fri Sep 10, 2010 9:44 pm

Classic view of K's: Revoke at anytime before acceptance. RS 2d 42/Peterson v. Pattberg.

Modern view of K's: B's walk was sufficient to constitute "substantial performance" as the court defined in Cook v. Coldwell.

D will likely argue that walking to the end of the bridge wasn't consideration, but simply a condition for a gratuitous promise(Plowman). P will argue along the ruling set in Batsakis/Sidley that D "got what he bargained for", P incurred legal detriment, and now the detriment should induce the promise (giving P $100).

I know this doesn't answer your question.

User avatar
omnomnom
Posts: 37
Joined: Tue Oct 20, 2009 1:18 am

Re: 1L Contracts Question: "Substantial performance"

Postby omnomnom » Fri Sep 10, 2010 10:06 pm

Bustang wrote: B's walk was sufficient to constitute "substantial performance" as the court defined in Cook v. Coldwell.

D will likely argue that walking to the end of the bridge wasn't consideration, but simply a condition for a gratuitous promise(Plowman). P will argue along the ruling set in Batsakis/Sidley that D "got what he bargained for", P incurred legal detriment, and now the detriment should induce the promise (giving P $100).


I disagree, the facts are very different from Cook v. Coldwell. Coldwell had several benchmarks, and each benchmark had the promise of a salary bonus. Cook had met the first few benchmarks, and THEN Coldwell tried to withdraw his offer, but she never fell back below the benchmarks (I'm over simplifying what actually happened). In my hypo there are no benchmarks; the analogy to Coldwell would be if Cook made a sale pushing her over the edge for a bonus, but then it fell through

User avatar
moandersen
Posts: 819
Joined: Wed Oct 29, 2008 1:31 pm

Re: 1L Contracts Question: "Substantial performance"

Postby moandersen » Sat Sep 11, 2010 12:39 pm

Bustang wrote:Classic view of K's: Revoke at anytime before acceptance. RS 2d 42/Peterson v. Pattberg.

Modern view of K's: B's walk was sufficient to constitute "substantial performance" as the court defined in Cook v. Coldwell.

D will likely argue that walking to the end of the bridge wasn't consideration, but simply a condition for a gratuitous promise(Plowman). P will argue along the ruling set in Batsakis/Sidley that D "got what he bargained for", P incurred legal detriment, and now the detriment should induce the promise (giving P $100).

I know this doesn't answer your question.


I think it does actually. It all depends on if you are going old school or new school as to when a unilateral contract can be revoked. Old school says it can be revoked up until full completion. New school all depends on how much/to what extent the promisee has accomplished. If it thus deemed that the promisee has fallen under the substantial performance umbrella (which depends on criteria and circumstance), then there is a contract and it cannot be revoked.

so to answer your question, regardless of which school you apply, there was a valid contract because B fully crossed the line. he performed the action in full before the wind pushed him back.

at least i hope im right, or else i need to look over my k notes. :?

User avatar
kswiss
Posts: 391
Joined: Wed Dec 09, 2009 1:58 am

Re: 1L Contracts Question: "Substantial performance"

Postby kswiss » Mon Sep 13, 2010 3:31 pm

Am I missing something?

Once performance begins in a unilateral contract, an "implied option contract" is created forbidding offeror from revoking, according to the modern view/RST.

So if the performance induced by the promise is "to walk to the end of the block," the first step is actual performance, and the offeror is no longer able to revoke.

According to my understanding, this isn't a reliance or forbearance issue, its strictly an issue of whether performance has begun.

Where is this substantial performance thing coming from? Maybe its something that my prof just doesn't cover/stress.

User avatar
Bustang
Posts: 439
Joined: Wed Jun 10, 2009 4:26 pm

Re: 1L Contracts Question: "Substantial performance"

Postby Bustang » Mon Sep 13, 2010 9:12 pm

kswiss wrote:Am I missing something?

Once performance begins in a unilateral contract, an "implied option contract" is created forbidding offeror from revoking, according to the modern view/RST.

So if the performance induced by the promise is "to walk to the end of the block," the first step is actual performance, and the offeror is no longer able to revoke.

According to my understanding, this isn't a reliance or forbearance issue, its strictly an issue of whether performance has begun.

Where is this substantial performance thing coming from? Maybe its something that my prof just doesn't cover/stress.


Cook v. Coldwell substantiated (lol) The Restatements by saying P had "substantially performed" within the uni K, thus making it irrevocable. Remember, RST is only persuasive, so the court's can look at other rulings etc when deciding which standard they're going to use.

User avatar
savagedm
Posts: 392
Joined: Mon Jun 02, 2008 2:51 am

Re: 1L Contracts Question: "Substantial performance"

Postby savagedm » Tue Sep 14, 2010 2:50 pm

Bustang wrote:
kswiss wrote:Am I missing something?

Once performance begins in a unilateral contract, an "implied option contract" is created forbidding offeror from revoking, according to the modern view/RST.

So if the performance induced by the promise is "to walk to the end of the block," the first step is actual performance, and the offeror is no longer able to revoke.

According to my understanding, this isn't a reliance or forbearance issue, its strictly an issue of whether performance has begun.

Where is this substantial performance thing coming from? Maybe its something that my prof just doesn't cover/stress.


Cook v. Coldwell substantiated (lol) The Restatements by saying P had "substantially performed" within the uni K, thus making it irrevocable. Remember, RST is only persuasive, so the court's can look at other rulings etc when deciding which standard they're going to use.


Also, the court seems to have a penchant for substantial performance, one step would hardly be considered substantial unless that step was barefoot on hot coals.

keg411
Posts: 5935
Joined: Tue Apr 21, 2009 9:10 pm

Re: 1L Contracts Question: "Substantial performance"

Postby keg411 » Tue Sep 14, 2010 6:47 pm

Depends. I learned today that there are some courts that just need "partial performance" and not "substantial performance".

/killself

User avatar
savagedm
Posts: 392
Joined: Mon Jun 02, 2008 2:51 am

Re: 1L Contracts Question: "Substantial performance"

Postby savagedm » Tue Sep 14, 2010 7:01 pm

keg411 wrote:Depends. I learned today that there are some courts that just need "partial performance" and not "substantial performance".

/killself


answer on test then:

courts typically require substantial performance, however there are a number of courts that also only require partial performance. in this case we need to examine which doctrine our jurisdiction adheres to.

keg411
Posts: 5935
Joined: Tue Apr 21, 2009 9:10 pm

Re: 1L Contracts Question: "Substantial performance"

Postby keg411 » Tue Sep 14, 2010 7:39 pm

savagedm wrote:
keg411 wrote:Depends. I learned today that there are some courts that just need "partial performance" and not "substantial performance".

/killself


answer on test then:

courts typically require substantial performance, however there are a number of courts that also only require partial performance. in this case we need to examine which doctrine our jurisdiction adheres to.


Restatement (Second) §45: "Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree begins the invited performance or tenders part of it”"

Case we read that applied this was a New Mexico case. Performance still has to be completed for consideration, but you have the creation of an "option contract" which is irrevocable. We just talked about this today. You can also apply the strict definition which is "not irrevocable until performance is complete" (New York case).

We just did this all this morning.

User avatar
savagedm
Posts: 392
Joined: Mon Jun 02, 2008 2:51 am

Re: 1L Contracts Question: "Substantial performance"

Postby savagedm » Tue Sep 14, 2010 11:19 pm

keg411 wrote:
savagedm wrote:
keg411 wrote:Depends. I learned today that there are some courts that just need "partial performance" and not "substantial performance".

/killself


answer on test then:

courts typically require substantial performance, however there are a number of courts that also only require partial performance. in this case we need to examine which doctrine our jurisdiction adheres to.


Restatement (Second) §45: "Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree begins the invited performance or tenders part of it”"

Case we read that applied this was a New Mexico case. Performance still has to be completed for consideration, but you have the creation of an "option contract" which is irrevocable. We just talked about this today. You can also apply the strict definition which is "not irrevocable until performance is complete" (New York case).

We just did this all this morning.


Yeah but that's a literal interpretation of the rule, and you should also know by now that courts rarely, if ever, decide a case based solely on the rule; there is substantial policy consideration involved as well. We started covering all that last week as well, but from what I've seen so far, what constitutes the partial performance is open to interpretation and some courts hold that merely starting down a path towards full performance suffices, while the majority lean more towards substantial performance that is usually based on what it cost the offeree in $$ or effort to do.

keg411
Posts: 5935
Joined: Tue Apr 21, 2009 9:10 pm

Re: 1L Contracts Question: "Substantial performance"

Postby keg411 » Wed Sep 15, 2010 7:37 am

My prof. talked about all three in our class. I know "substantial performance" is the majority, but that doesn't mean there aren't some courts that take the rule literally, and there is also the old rule of "performance must be complete and that's it". And my prof. even stresses that different courts will sometimes interpret the same law differently based on different/conflicting policy considerations... so policy considerations are something to think about, but there are times they favor multiple rule interpretations.

We're also learning K's in a very different way than the typical law class in that we're given fact patterns and a packet of cases for every class and we're supposed to "apply the law to the facts". So we have to look at different court interpretations of the same rule and see which one best matches the fact pattern (or see how each rule in each case would apply to the fact pattern) and then make a determination on the original fact pattern question.

User avatar
savagedm
Posts: 392
Joined: Mon Jun 02, 2008 2:51 am

Re: 1L Contracts Question: "Substantial performance"

Postby savagedm » Wed Sep 15, 2010 12:48 pm

keg411 wrote:My prof. talked about all three in our class. I know "substantial performance" is the majority, but that doesn't mean there aren't some courts that take the rule literally, and there is also the old rule of "performance must be complete and that's it". And my prof. even stresses that different courts will sometimes interpret the same law differently based on different/conflicting policy considerations... so policy considerations are something to think about, but there are times they favor multiple rule interpretations.

We're also learning K's in a very different way than the typical law class in that we're given fact patterns and a packet of cases for every class and we're supposed to "apply the law to the facts". So we have to look at different court interpretations of the same rule and see which one best matches the fact pattern (or see how each rule in each case would apply to the fact pattern) and then make a determination on the original fact pattern question.


I dont see how this is different and special from my Ks class, we do much the same thing.

keg411
Posts: 5935
Joined: Tue Apr 21, 2009 9:10 pm

Re: 1L Contracts Question: "Substantial performance"

Postby keg411 » Wed Sep 15, 2010 2:04 pm

Go here:
--LinkRemoved--

The first couple of packets are free if you want to see an example of what we do in each class. We don't use a casebook at all. We have a very specific client based scenario that we use to apply the cases to. We're learning the law and need to analyze it at the same time. It's not like most classes where they just change facts around for hypos and then ask if it would be different if "x changed or y changed". Trust me, it's different.

Anyway, the point was that our professor wanted us to know all three possible interpretations. And he's not the biggest fan of policy arguments.

User avatar
savagedm
Posts: 392
Joined: Mon Jun 02, 2008 2:51 am

Re: 1L Contracts Question: "Substantial performance"

Postby savagedm » Wed Sep 15, 2010 2:31 pm

keg411 wrote:Go here:
--LinkRemoved--

The first couple of packets are free if you want to see an example of what we do in each class. We don't use a casebook at all. We have a very specific client based scenario that we use to apply the cases to. We're learning the law and need to analyze it at the same time. It's not like most classes where they just change facts around for hypos and then ask if it would be different if "x changed or y changed". Trust me, it's different.

Anyway, the point was that our professor wanted us to know all three possible interpretations. And he's not the biggest fan of policy arguments.


That's actually really cool. Would your professor mind if you hook a couple of us up with some of these hypos as the semester goes on for practice? I know my Prof. has mentioned we could bring outside hypos for him to look at so long as they relate to the course materials.

keg411
Posts: 5935
Joined: Tue Apr 21, 2009 9:10 pm

Re: 1L Contracts Question: "Substantial performance"

Postby keg411 » Wed Sep 15, 2010 4:09 pm

They actually aren't my professor's. They belong to Professor Leslie at UVA. If you're concerned I would contact him, but you can pay for the rest of them, so it's probably not a problem.

Personally, I really like that our class is being taught this way. It's more fun than just reading cases. I just never explain it right when I try to tell other people.




Return to “Forum for Law School Students”

Who is online

Users browsing this forum: No registered users and 8 guests