Acceptance of a Bilateral Contract by Performance?

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jlayne
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Re: Acceptance of a Bilateral Contract by Performance?

Postby jlayne » Fri Dec 03, 2010 11:52 pm

BCLS wrote:
jlayne wrote:
BCLS wrote:Wouldnt section 62 (2) apply to a bi accepted by performance?


Good question. But I don't know for sure, because an offer looking to a bilateral contract is not inviting either performance or a promise. It is inviting a promise. The performance is construed as effecting a promise, but this is not what the offeror explicitly sought. It may be that 62(2) would apply, but I am not sure. Are all offers looking to bilateral contracts offers that invite acceptance by performance or promise? I thought that by their nature, bilateral contracts look to a promise ONLY.

It all comes down to what the offeror intended. Best bet, argue both possibilities on the exam. DONE! :)


Or... what the offeror manifested and how that would be understood by a reasonable person. That, rather than intention, is the real standard.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby BCLS » Fri Dec 03, 2010 11:54 pm

jlayne wrote:
BCLS wrote:
jlayne wrote:
BCLS wrote:Wouldnt section 62 (2) apply to a bi accepted by performance?


Good question. But I don't know for sure, because an offer looking to a bilateral contract is not inviting either performance or a promise. It is inviting a promise. The performance is construed as effecting a promise, but this is not what the offeror explicitly sought. It may be that 62(2) would apply, but I am not sure. Are all offers looking to bilateral contracts offers that invite acceptance by performance or promise? I thought that by their nature, bilateral contracts look to a promise ONLY.

It all comes down to what the offeror intended. Best bet, argue both possibilities on the exam. DONE! :)


Or... what the offeror manifested and how that would be understood by a reasonable person. That, rather than intention, is the real standard.

that's what I mean't :) I mean come on, didn't my outer manifestations lead you to this conclusion?

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JCougar
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Re: Acceptance of a Bilateral Contract by Performance?

Postby JCougar » Fri Dec 03, 2010 11:57 pm

BCLS wrote:
JCougar wrote:
jlayne wrote:
BCLS wrote:Wouldnt section 62 (2) apply to a bi accepted by performance?


Good question. But I don't know for sure, because an offer looking to a bilateral contract is not inviting either performance or a promise. It is inviting a promise. The performance is construed as effecting a promise, but this is not what the offeror explicitly sought. It may be that 62(2) would apply, but I am not sure. Are all offers looking to bilateral contracts offers that invite acceptance by performance or promise? I thought that by their nature, bilateral contracts look to a promise ONLY.


The problem here is that you're conflating offers with contracts. Contracts can't look to a promise...it's only a contract if a promise or performance has been already returned. Only offers can. You can have an offer for a bilateral contract, but if that's accepted by performance, it's a unilateral contract. An offer alone can't make it bilateral.

Can an offer for a bi-lateral K be accepted by performance? If it's not totally clear we look to section 32 which would allow the offeree to choose his method of acceptance, correct?


That's what I think.

The difference between bilateral and unilateral is totally immaterial before the contract is formed. There's simply an offer on the table that leaves the offeree the power to accept until the offer is terminated.

The only way I can see a contract be an offer for return promise only is if it's explicitly stated that performance should begin on some future date instead of immediately.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby jlayne » Fri Dec 03, 2010 11:59 pm

JCougar wrote:
jlayne wrote:
BCLS wrote:Wouldnt section 62 (2) apply to a bi accepted by performance?


Good question. But I don't know for sure, because an offer looking to a bilateral contract is not inviting either performance or a promise. It is inviting a promise. The performance is construed as effecting a promise, but this is not what the offeror explicitly sought. It may be that 62(2) would apply, but I am not sure. Are all offers looking to bilateral contracts offers that invite acceptance by performance or promise? I thought that by their nature, bilateral contracts look to a promise ONLY.


The problem here is that you're conflating offers with contracts. Contracts can't look to a promise...it's only a contract if a promise or performance has been already returned. Only offers can. You can have an offer for a bilateral contract, but if that's accepted by performance, it's a unilateral contract. An offer alone can't make it bilateral.


That's where we disagree, and until we have an authority that shows us one way or the other, we have to leave this question at that. If I'm wrong, I'll be happy to say so. But I don't, at least for now, accept that bilateral contracts cannot exist where the acceptance was constituted by performance. I don't even know how to make any sense out of Restatement 62(2) if what you say is correct is actually correct.

Restatement 2d 62:

1) Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance [and according to your statement, it is a UNILATERAL CONTRACT because accepted by performance]

and yet...

(2) Such an acceptance operates as a promise to render complete performance.

But as I said above, most jurisdictions say that in ANY unilateral contract where performance begins, the offeror is bound, but the offeree is NOT bound to complete. If 62(2) is talking about unilateral contracts, then these things contradict.

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twert
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Re: Acceptance of a Bilateral Contract by Performance?

Postby twert » Sat Dec 04, 2010 12:00 am

sorry if this has been said, i didn't read the whole thread

a bilateral contract can only be accepted by a return promise with one exception, where the offeree tenders full performance before the expiration of the offer.
-Gilbert

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JCougar
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Re: Acceptance of a Bilateral Contract by Performance?

Postby JCougar » Sat Dec 04, 2010 12:05 am

twert wrote:sorry if this has been said, i didn't read the whole thread

a bilateral contract can only be accepted by a return promise with one exception, where the offeree tenders full performance before the expiration of the offer.
-Gilbert


Ok...that's what I was looking for...but what is the source for that law? Is that in the restatement somewhere?

I'd still take issue with the language they're using there, because you can't accept a contract. You can only accept an offer.

The definition of bilateral/unilateral only comes after the contract has been completed formed. Now whether you can or can't accept something by performance is another story.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby jlayne » Sat Dec 04, 2010 12:07 am

twert wrote:sorry if this has been said, i didn't read the whole thread

a bilateral contract can only be accepted by a return promise with one exception, where the offeree tenders full performance before the expiration of the offer.
-Gilbert


That makes total sense. But it doesn't answer whether or not the beginning of performance, in a bilateral contract, constitutes a promise sufficient to bind the offeror... and it doesn't answer whether or not at the beginning of performance, if it does so bind the offeror, the offeree is likewise bound.

I would answer on the first part of that, yes, the performance beginning is a sufficient acceptance (and even consideration) to bind the offeror and as to the second, yes, as opposed to a unilateral contract, since the bilateral offer looked to a promise, the beginning of performance in acceptance of the offer is a promise to complete performance.

I'd be interested to see what Gilbert says about these questions. But I do appreciate the contribution. It confirms that a bilateral contract CAN be accepted by performance.

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JCougar
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Re: Acceptance of a Bilateral Contract by Performance?

Postby JCougar » Sat Dec 04, 2010 12:08 am

I've learned one thing on here...I can see why in the third restatement, they're trying to get rid of the unilateral/bilateral distinction. It really makes no difference.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby BCLS » Sat Dec 04, 2010 12:09 am

hahaha yes. This thread is good exam prep!

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JazzOne
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Re: Acceptance of a Bilateral Contract by Performance?

Postby JazzOne » Sat Dec 04, 2010 12:10 am

JCougar wrote:I've learned one thing on here...I can see why in the third restatement, they're trying to get rid of the unilateral/bilateral distinction. It really makes no difference.

+1

I really appreciate the move from legal formalism to legal realism. I think it is interesting from a historical standpoint, but more importantly, realism is a superior philosophy of jurisprudence. Obviously, we can't dispense with rules and tradition entirely, but the unilateral/bilateral issue is irrelevant to adjudicating actual controversies.
Last edited by JazzOne on Sat Dec 04, 2010 12:11 am, edited 1 time in total.

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twert
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Re: Acceptance of a Bilateral Contract by Performance?

Postby twert » Sat Dec 04, 2010 12:11 am

JCougar wrote:
twert wrote:sorry if this has been said, i didn't read the whole thread

a bilateral contract can only be accepted by a return promise with one exception, where the offeree tenders full performance before the expiration of the offer.
-Gilbert


Ok...that's what I was looking for...but what is the source for that law? Is that in the restatement somewhere?

I'd still take issue with the language they're using there, because you can't accept a contract. You can only accept an offer.

The definition of bilateral/unilateral only comes after the contract has been completed formed. Now whether you can or can't accept something by performance is another story.

the source of the law is rest. 62. The interpretation is based on i don't know what, but it basically says that since a promise doesn't need to be verbal, full performance is considered by the courts to be like a non verbal acceptance.

as for the language, yes, i was sloppy with my paraphrase. Gilbert says "an offer for a bilateral contract..."

The definition bilateral/unilateral should come with the type of consideration bargained for, thus the definition can be made before it is accepted. at least that's how i think of it.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby JCougar » Sat Dec 04, 2010 12:12 am

Given the above Gilbert statement, if the offer is stipulated to be only accepted by a return promise, I would guess that the offeree begins performance at his/her own peril unless they're sure they can complete performance by the time the offer expires. And the offeror still has the power to revoke.

In this case, it seems like assent occurs upon completion of performance by the offeree instead of the beginning of performance -- and therefore nobody is bound until performance by the offeree is complete.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby JCougar » Sat Dec 04, 2010 12:16 am

twert wrote:
The definition bilateral/unilateral should come with the type of consideration bargained for, thus the definition can be made before it is accepted. at least that's how i think of it.


I guess you could say "offer for a bilateral contract" or "offer for a unilateral contract," but if it were possible to accept a bilateral offer by performance, you would be creating a unilateral contract.

So apparently, if you complete performance before the offer for a bilateral contract expires, you have created a unilateral contract.

But now we're really just arguing semantics.

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JazzOne
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Re: Acceptance of a Bilateral Contract by Performance?

Postby JazzOne » Sat Dec 04, 2010 12:17 am

JCougar wrote:Given the above Gilbert statement, if the offer is stipulated to be only accepted by a return promise, I would guess that the offeree begins performance at his/her own peril unless they're sure they can complete performance by the time the offer expires. And the offeror still has the power to revoke.

In this case, it seems like assent occurs upon completion of performance by the offeree instead of the beginning of performance -- and therefore nobody is bound until performance by the offeree is complete.

I'm just not sure I buy this, but I don't have easy access to the Restatement to make an argument. However, if the offeror sat by and knowingly allowed the offeree to perform, I have a hard time believing that a court would allow the offeror to rescind the offer right before completion. There must be some type of legal fiction that would estop from the offeror from arguing that there was no acceptance.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby JCougar » Sat Dec 04, 2010 12:20 am

JazzOne wrote:I'm just not sure I buy this, but I don't have easy access to the Restatement to make an argument. However, if the offeror sat by and knowingly allowed the offeree to perform, I have a hard time believing that a court would allow the offeror to rescind the offer right before completion. There must be some type of legal fiction that would estop from the offeror from arguing that there was no acceptance.


There is the legal fiction you speak of if the offer allows acceptance by performance, or is unclear. But (now I know a new thing!) if the offer is specifically for a return promise only, the offeree is the one that begins performance at his/her own peril, since it's the offeree that is not completely following the rules.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby jlayne » Sat Dec 04, 2010 12:24 am

JCougar wrote:Given the above Gilbert statement, if the offer is stipulated to be only accepted by a return promise, I would guess that the offeree begins performance at his/her own peril unless they're sure they can complete performance by the time the offer expires. And the offeror still has the power to revoke.

In this case, it seems like assent occurs upon completion of performance by the offeree instead of the beginning of performance -- and therefore nobody is bound until performance by the offeree is complete.


I simply don't think you're right about that. It doesn't make any policy sense. It doesn't comport with other bilateral contracts accepted by promise. It doesn't make sense given that partial performance is consideration. It doesn't make sense either because it doesn't seem to follow the objective theory of contract formation, since any reasonable person would understand the beginning of performance to be a promise to accept the offer, since a promise was being sought in the offer.

When I find out for sure, I'll chime back in, but at this point, I think we're grinding our wheels until we see what the law is.

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JazzOne
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Re: Acceptance of a Bilateral Contract by Performance?

Postby JazzOne » Sat Dec 04, 2010 12:30 am

JCougar wrote:
JazzOne wrote:I'm just not sure I buy this, but I don't have easy access to the Restatement to make an argument. However, if the offeror sat by and knowingly allowed the offeree to perform, I have a hard time believing that a court would allow the offeror to rescind the offer right before completion. There must be some type of legal fiction that would estop from the offeror from arguing that there was no acceptance.


There is the legal fiction you speak of if the offer allows acceptance by performance, or is unclear. But (now I know a new thing!) if the offer is specifically for a return promise only, the offeree is the one that begins performance at his/her own peril, since it's the offeree that is not completely following the rules.

If you're correct, then I think the court would do everything in its power to construe the contract as unclear. Even if the contract was perfectly clear, the judge might hold that the offeree didn't understand the consequences of that provision, so there was no meeting of the minds. If the offer was verbal, then I think you can basically forget trying to argue that you demanded a return promise as the sole mode of acceptance.

This goes to my point above. The equities of the case would determine which legal rules are invoked. If the offeror did limit the mode of acceptance to a return promise, but then sat by and allowed the offeree to perform, only to rescind at the last minute, I'm pretty sure the court would enforce a contract against the offeror. If, on the other hand, the offeree began to perform, then realized that his costs would be higher than he initially supposed, and discontinued before completion, I think the court lets him off the hook because the equities point in the opposite direction.

At any rate, those aren't legal arguments. You'd have to parse the restatement to figure out which type of legal fiction to invoke. And you may have to argue that a certain section applies even if it really doesn't (like the section we're debating) simply because the policy considerations are similar.
Last edited by JazzOne on Sat Dec 04, 2010 12:33 am, edited 2 times in total.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby twert » Sat Dec 04, 2010 12:31 am

jlayne wrote:
JCougar wrote:Given the above Gilbert statement, if the offer is stipulated to be only accepted by a return promise, I would guess that the offeree begins performance at his/her own peril unless they're sure they can complete performance by the time the offer expires. And the offeror still has the power to revoke.

In this case, it seems like assent occurs upon completion of performance by the offeree instead of the beginning of performance -- and therefore nobody is bound until performance by the offeree is complete.


I simply don't think you're right about that. It doesn't make any policy sense. It doesn't comport with other bilateral contracts accepted by promise. It doesn't make sense given that partial performance is consideration. It doesn't make sense either because it doesn't seem to follow the objective theory of contract formation, since any reasonable person would understand the beginning of performance to be a promise to accept the offer, since a promise was being sought in the offer.

When I find out for sure, I'll chime back in, but at this point, I think we're grinding our wheels until we see what the law is.

i think partial performance on an offer that bargained for a promise would not create a contract, however, i think a judge might create one based on a theory of promissory estoppel.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby JazzOne » Sat Dec 04, 2010 12:33 am

twert wrote:
jlayne wrote:
JCougar wrote:Given the above Gilbert statement, if the offer is stipulated to be only accepted by a return promise, I would guess that the offeree begins performance at his/her own peril unless they're sure they can complete performance by the time the offer expires. And the offeror still has the power to revoke.

In this case, it seems like assent occurs upon completion of performance by the offeree instead of the beginning of performance -- and therefore nobody is bound until performance by the offeree is complete.


I simply don't think you're right about that. It doesn't make any policy sense. It doesn't comport with other bilateral contracts accepted by promise. It doesn't make sense given that partial performance is consideration. It doesn't make sense either because it doesn't seem to follow the objective theory of contract formation, since any reasonable person would understand the beginning of performance to be a promise to accept the offer, since a promise was being sought in the offer.

When I find out for sure, I'll chime back in, but at this point, I think we're grinding our wheels until we see what the law is.

i think partial performance on an offer that bargained for a promise would not create a contract, however, i think a judge might create one based on a theory of promissory estoppel.

Or quantum meruit? It's a been a while. I really shouldn't even be discussing this.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby twert » Sat Dec 04, 2010 12:34 am

haven't learned that one yet, so i can't say.

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JCougar
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Re: Acceptance of a Bilateral Contract by Performance?

Postby JCougar » Sat Dec 04, 2010 12:36 am

JazzOne wrote:Or quantum meruit? It's a been a while. I really shouldn't even be discussing this.

Actually, this is a good point.

If our example occurred, I'll bet the judge doesn't enforce the contract, but does let the offeree sue for restitution.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby BCLS » Sat Dec 04, 2010 12:48 am

JCougar wrote:
JazzOne wrote:Or quantum meruit? It's a been a while. I really shouldn't even be discussing this.

Actually, this is a good point.

If our example occurred, I'll bet the judge doesn't enforce the contract, but does let the offeree sue for restitution.


Could be quantum meruit.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby jlayne » Sat Dec 04, 2010 12:56 am

JCougar wrote:
JazzOne wrote:Or quantum meruit? It's a been a while. I really shouldn't even be discussing this.

Actually, this is a good point.

If our example occurred, I'll bet the judge doesn't enforce the contract, but does let the offeree sue for restitution.


Exactly why I said that this position, that a bilateral contract is only accepted by COMPLETE performance, doesn't make any policy sense. Do you really think that the law would insist on complete performance for an acceptance of an offer looking to a bilateral contract, and then, in every instance where the offeror revokes beforehand, give the offeree a cause under quantum meruit? That doesn't make ANY sense. The law would just say that the beginning of the performance is all that is needed to promise. Why would it say that it's legal to revoke the offer before performance, but then penalize the offeror by quantum meruit?

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Re: Acceptance of a Bilateral Contract by Performance?

Postby JCougar » Sat Dec 04, 2010 1:15 am

jlayne wrote:
JCougar wrote:
JazzOne wrote:Or quantum meruit? It's a been a while. I really shouldn't even be discussing this.

Actually, this is a good point.

If our example occurred, I'll bet the judge doesn't enforce the contract, but does let the offeree sue for restitution.


Exactly why I said that this position, that a bilateral contract is only accepted by COMPLETE performance, doesn't make any policy sense. Do you really think that the law would insist on complete performance for an acceptance of an offer looking to a bilateral contract, and then, in every instance where the offeror revokes beforehand, give the offeree a cause under quantum meruit? That doesn't make ANY sense. The law would just say that the beginning of the performance is all that is needed to promise. Why would it say that it's legal to revoke the offer before performance, but then penalize the offeror by quantum meruit?


I don't see how it doesn't make any policy sense if you begin performance when you're specifically told that's not the way you should accept.

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Re: Acceptance of a Bilateral Contract by Performance?

Postby jlayne » Sat Dec 04, 2010 1:26 am

JCougar wrote:
jlayne wrote:
JCougar wrote:
JazzOne wrote:Or quantum meruit? It's a been a while. I really shouldn't even be discussing this.

Actually, this is a good point.

If our example occurred, I'll bet the judge doesn't enforce the contract, but does let the offeree sue for restitution.


Exactly why I said that this position, that a bilateral contract is only accepted by COMPLETE performance, doesn't make any policy sense. Do you really think that the law would insist on complete performance for an acceptance of an offer looking to a bilateral contract, and then, in every instance where the offeror revokes beforehand, give the offeree a cause under quantum meruit? That doesn't make ANY sense. The law would just say that the beginning of the performance is all that is needed to promise. Why would it say that it's legal to revoke the offer before performance, but then penalize the offeror by quantum meruit?


I don't see how it doesn't make any policy sense if you begin performance when you're specifically told that's not the way you should accept.


That begs the question. Didn't we see earlier that Gilbert shows that a bilateral contract CAN be accepted by performance? Yet an offer looking to a bilateral contract specifically seeks a promise in return for a promise. That's its definition! So in a bilateral contract, once again, you are NOT being told that that's not the way you should accept. You are being told that a PROMISE is required in response... and this is either by performance or by an actual, expressed promise to perform. So again, what you say here doesn't counteract my policy argument, because a bilateral contract does NOT specify that you cannot accept by performance... this is what we saw in Gilbert's commentary.




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