Acceptance of a Bilateral Contract by Performance? Forum

[JCougar]

The beginning of performance creates an option contract under R.2d 45, which means you can't revoke as long as the offeree completes within a reasonable amount of time.

Interesting, but since it is an option, the offeree can walk away without no liability. That's odd.

I was under the impression that once performance started, the offer becomes irrevocable for the offeror, AND when read in combination with section 62 (2) the part performance constitutes a promise for offeree to complete.

This.

[BCLS]

The beginning of performance creates an option contract under R.2d 45, which means you can't revoke as long as the offeree completes within a reasonable amount of time.

Interesting, but since it is an option, the offeree can walk away without no liability. That's odd.

I was under the impression that once performance started, the offer becomes irrevocable for the offeror, AND when read in combination with section 62 (2) the part performance constitutes a promise for offeree to complete.

This.

Good, BC law is teaching me this correctly.

[jlayne]

JCougar, the R2d. of Contracts, 45, which you site, specifically comments that this is only for unilateral contracts. (see comment a).

The note says: "a. Offer limited to acceptance by performance only. This Section is limited to cases where the offer does not invite a promissory acceptance. Such an offer has often been referred to as an "offer for a unilateral contract." Typical illustrations are found in offers of rewards or prizes and in non-commercial arrangements among relatives and friends...." [emphasis mine]

The nature of the contract isn't determined by the offer, it's determined by the mode of acceptance. So if you accept by performance, it's a unilateral contract.

I think this overlooks the fact that the offeror determines the nature of the entire contract, because he is the one with power to make the terms. If he offers looking to a bilateral contract, the question is whether or not the acceptance can be by performance (which constitutes a promise). He has specified that a promise must be returned, and so, no matter what form that promise comes in, it must be a performance by promise. So, I believe, if the offer is looking to a bilateral contract, it must always be accepted as such. Otherwise, the offeror is NOT the master of the terms of the contract.

[dailygrind]

The contract can't be described as "unilateral" or "bilateral" until the manifestation of mutual assent. If performance manifests mutual assent, it's unilateral. If a return promise manifests mutual assent, it's bilateral. Until there is mutual assent, it's only an offer, and offers can't be bilateral or unilateral.

touche.

[JCougar]

Doesn't this violate the principle that the offeror is the MASTER of his contract? Doesn't his offer determine in what manner it can be accepted? IF so, why would it not be proper to classify the contract as bilateral based upon an offer looking to a bilateral contract?

The offeror is master of his contract...but if he's not clear as to the mode of acceptance, that's to his own detriment.

[jlayne]

Doesn't this violate the principle that the offeror is the MASTER of his contract? Doesn't his offer determine in what manner it can be accepted? IF so, why would it not be proper to classify the contract as bilateral based upon an offer looking to a bilateral contract?

The offeror is master of his contract...but if he's not clear as to the mode of acceptance, that's to his own detriment.

How is anything ambiguous about saying, "I promise to pay you this, if you promise to do this..." ?

I don't think that this would be an example of ambiguity. It is an unambiguous offer looking to a bilateral contract. No?

[BCLS]

Doesn't this violate the principle that the offeror is the MASTER of his contract? Doesn't his offer determine in what manner it can be accepted? IF so, why would it not be proper to classify the contract as bilateral based upon an offer looking to a bilateral contract?

The offeror is master of his contract...but if he's not clear as to the mode of acceptance, that's to his own detriment.

Yeah. If he's not clear, acceptance by promise or performance can be chosen by the offeree under section 32.

[JazzOne]

Doesn't this violate the principle that the offeror is the MASTER of his contract? Doesn't his offer determine in what manner it can be accepted? IF so, why would it not be proper to classify the contract as bilateral based upon an offer looking to a bilateral contract?

The offeror is master of his contract...but if he's not clear as to the mode of acceptance, that's to his own detriment.

How is anything ambiguous about saying, "I promise to pay you this, if you promise to do this..." ?

I don't think that this would be an example of ambiguity. It is an unambiguous offer looking to a bilateral contract. No?

I think what's confusing here is that beginning performance is not really a promise to complete. That's a legal fiction created by the law. So, it's hard to see why it's still a bilateral contract even though the offer was accepted by performance. Actually, the offer was accepted by "beginning to perform," which is a promise to complete, so that sounds like a bilateral contract to me.

[jlayne]

Doesn't this violate the principle that the offeror is the MASTER of his contract? Doesn't his offer determine in what manner it can be accepted? IF so, why would it not be proper to classify the contract as bilateral based upon an offer looking to a bilateral contract?

The offeror is master of his contract...but if he's not clear as to the mode of acceptance, that's to his own detriment.

How is anything ambiguous about saying, "I promise to pay you this, if you promise to do this..." ?

I don't think that this would be an example of ambiguity. It is an unambiguous offer looking to a bilateral contract. No?

I think what's confusing here is that beginning performance is not really a promise to complete. That's a legal fiction created by the law. So, it's hard to see why it's still a bilateral contract even though the offer was accepted by performance. Actually, the offer was accepted by "beginning to perform," which is a promise to complete, so that sounds like a bilateral contract to me.

Sounds like it to me too.

[JCougar]

How is anything ambiguous about saying, "I promise to pay you this, if you promise to do this..." ?

I don't think that this would be an example of ambiguity. It is an unambiguous offer looking to a bilateral contract. No?

If you're explicit like that, I'm not sure if R.2d 32 governs then. I'm not sure what the exact rule is that applies to that situation.

But it seems that such an offer is simply an offer looking for assent...because all the terms are already laid out. Why would it matter in that case if the offeree manifested his assent via either performance or a return promise? Either way, the offeror is equally bound. It's not to the offeror's detriment if you just start performing.

[jlayne]

How is anything ambiguous about saying, "I promise to pay you this, if you promise to do this..." ?

I don't think that this would be an example of ambiguity. It is an unambiguous offer looking to a bilateral contract. No?

If you're explicit like that, I'm not sure if R.2d 32 governs then. I'm not sure what the exact rule is that applies to that situation.

But it seems that such an offer is simply an offer looking for assent...because all the terms are already laid out. Why would it matter in that case if the offeree manifested his assent via either performance or a return promise? Either way, the offeror is equally bound. It's not to the offeror's detriment if you just start performing.

Well, I think in this case that the "option contract" language would not apply, because this is clearly a bilateral contract, although accepted by performance. So the question would then be, is the offeree bound to complete performance? If it were a unilateral contract, no... because it's at the option of the offeree. But what about in performance of a bilateral contract? I would think so... but I'm not sure where to find this.

[BCLS]

How is anything ambiguous about saying, "I promise to pay you this, if you promise to do this..." ?

I don't think that this would be an example of ambiguity. It is an unambiguous offer looking to a bilateral contract. No?

If you're explicit like that, I'm not sure if R.2d 32 governs then. I'm not sure what the exact rule is that applies to that situation.

But it seems that such an offer is simply an offer looking for assent...because all the terms are already laid out. Why would it matter in that case if the offeree manifested his assent via either performance or a return promise? Either way, the offeror is equally bound. It's not to the offeror's detriment if you just start performing.

Well, I think in this case that the "option contract" language would not apply, because this is clearly a bilateral contract, although accepted by performance. So the question would then be, is the offeree bound to complete performance? If it were a unilateral contract, no... because it's at the option of the offeree. But what about in performance of a bilateral contract? I would think so... but I'm not sure where to find this.

I have been taught here at least that once a uni-K has been accepted by performance, according to section 45, we also have to read this in conjunction with section 62 (2) and the offeree now would be making a promise to complete performance and is in fact bound.

EDIT: on pg 83 of the EE this is laid out. "commencement of performance constitutes an implied promise to complete the performance..." This essentially converts it into a bi-K.

[jlayne]

How is anything ambiguous about saying, "I promise to pay you this, if you promise to do this..." ?

I don't think that this would be an example of ambiguity. It is an unambiguous offer looking to a bilateral contract. No?

If you're explicit like that, I'm not sure if R.2d 32 governs then. I'm not sure what the exact rule is that applies to that situation.

But it seems that such an offer is simply an offer looking for assent...because all the terms are already laid out. Why would it matter in that case if the offeree manifested his assent via either performance or a return promise? Either way, the offeror is equally bound. It's not to the offeror's detriment if you just start performing.

Well, I think in this case that the "option contract" language would not apply, because this is clearly a bilateral contract, although accepted by performance. So the question would then be, is the offeree bound to complete performance? If it were a unilateral contract, no... because it's at the option of the offeree. But what about in performance of a bilateral contract? I would think so... but I'm not sure where to find this.

I have been taught here at least that once a uni-K has been accepted by performance, according to section 45, we also have to read this in conjunction with section 62 (2) and the offeree now would be making a promise to complete performance and is in fact bound.

Doesn't seem right to me. Here, we were taught that in most jurisdictions, a unilateral contract that has been accepted by beginning of performance becomes an option contract that binds the OFFEROR, but it does NOT bind the offeree. He or she can continue to perform or stop performance at will. There is a three way split in jurisdictions...the other two approaches: the traditional approach is harsh and allows the offeror to revoke his offer at any time before the COMPLETION of performance. A newer rule, which is a minority, it becomes a bilateral contract at beginning of performance, and this binds BOTH the offeror and the offeree. (very small minority of jurisdictions.)

You have to keep in mind that the Restatement does not mirror the law in all jurisdictions, and it sometimes does not mirror the law in a majority of jurisdictions. It is not itself law.

[BCLS]

Doesn't seem right to me. Here, we were taught that in most jurisdictions, a unilateral contract that has been accepted by beginning of performance becomes an option contract that binds the OFFEROR, but it does NOT bind the offeree. He or she can continue to perform or stop performance at will. There is a three way split in jurisdictions...the other two approaches: the traditional approach is harsh and allows the offeror to revoke his offer at any time before the COMPLETION of performance. A newer rule, which is a minority, it becomes a bilateral contract at beginning of performance, and this binds BOTH the offeror and the offeree. (very small minority of jurisdictions.)

You have to keep in mind that the Restatement does not mirror the law in all jurisdictions, and it sometimes does not mirror the law in a majority of jurisdictions. It is not itself law.

Of course not in all jurisdictions. All I know is that its pretty clear in the E&E and this is precisely how I was taught in class.

[jlayne]

Doesn't seem right to me. Here, we were taught that in most jurisdictions, a unilateral contract that has been accepted by beginning of performance becomes an option contract that binds the OFFEROR, but it does NOT bind the offeree. He or she can continue to perform or stop performance at will. There is a three way split in jurisdictions...the other two approaches: the traditional approach is harsh and allows the offeror to revoke his offer at any time before the COMPLETION of performance. A newer rule, which is a minority, it becomes a bilateral contract at beginning of performance, and this binds BOTH the offeror and the offeree. (very small minority of jurisdictions.)

You have to keep in mind that the Restatement does not mirror the law in all jurisdictions, and it sometimes does not mirror the law in a majority of jurisdictions. It is not itself law.

Of course not in all jurisdictions. All I know is that its pretty clear in the E&E and this is precisely how I was taught in class.

Then that's what you have to follow for your exams. I don't know. We were explicitly taught exactly as I wrote it above. Not saying what you learned is wrong. It just may not be the whole range of jurisdictions. Your professor may have a reason for teaching it that way and may fill that out later?

[BCLS]

Doesn't seem right to me. Here, we were taught that in most jurisdictions, a unilateral contract that has been accepted by beginning of performance becomes an option contract that binds the OFFEROR, but it does NOT bind the offeree. He or she can continue to perform or stop performance at will. There is a three way split in jurisdictions...the other two approaches: the traditional approach is harsh and allows the offeror to revoke his offer at any time before the COMPLETION of performance. A newer rule, which is a minority, it becomes a bilateral contract at beginning of performance, and this binds BOTH the offeror and the offeree. (very small minority of jurisdictions.)

You have to keep in mind that the Restatement does not mirror the law in all jurisdictions, and it sometimes does not mirror the law in a majority of jurisdictions. It is not itself law.

Of course not in all jurisdictions. All I know is that its pretty clear in the E&E and this is precisely how I was taught in class.

Then that's what you have to follow for your exams. I don't know. We were explicitly taught exactly as I wrote it above. Not saying what you learned is wrong. It just may not be the whole range of jurisdictions. Your professor may have a reason for teaching it that way and may fill that out later?

That's what I'm thinking-- all professors are different. I'm going to send my professor an email right now and try to clarify this.

[ogurty]

Doesn't seem right to me. Here, we were taught that in most jurisdictions, a unilateral contract that has been accepted by beginning of performance becomes an option contract that binds the OFFEROR, but it does NOT bind the offeree. He or she can continue to perform or stop performance at will. There is a three way split in jurisdictions...the other two approaches: the traditional approach is harsh and allows the offeror to revoke his offer at any time before the COMPLETION of performance. A newer rule, which is a minority, it becomes a bilateral contract at beginning of performance, and this binds BOTH the offeror and the offeree. (very small minority of jurisdictions.)

You have to keep in mind that the Restatement does not mirror the law in all jurisdictions, and it sometimes does not mirror the law in a majority of jurisdictions. It is not itself law.

Of course not in all jurisdictions. All I know is that its pretty clear in the E&E and this is precisely how I was taught in class.

I think you were taught wrong in class, or you misunderstood. Section 62(2) is only for offers that invite acceptance by EITHER promise OR performance. An offer than only invites acceptance by performance is not governed by 62(2), and beginning performance creates an option for the offeree to complete performance but does not bind him to complete.

[BCLS]

Doesn't seem right to me. Here, we were taught that in most jurisdictions, a unilateral contract that has been accepted by beginning of performance becomes an option contract that binds the OFFEROR, but it does NOT bind the offeree. He or she can continue to perform or stop performance at will. There is a three way split in jurisdictions...the other two approaches: the traditional approach is harsh and allows the offeror to revoke his offer at any time before the COMPLETION of performance. A newer rule, which is a minority, it becomes a bilateral contract at beginning of performance, and this binds BOTH the offeror and the offeree. (very small minority of jurisdictions.)

You have to keep in mind that the Restatement does not mirror the law in all jurisdictions, and it sometimes does not mirror the law in a majority of jurisdictions. It is not itself law.

Of course not in all jurisdictions. All I know is that its pretty clear in the E&E and this is precisely how I was taught in class.

I think you were taught wrong in class, or you misunderstood. Section 62(2) is only for offers that invite acceptance by EITHER promise OR performance. An offer than only invites acceptance by performance is not governed by 62(2), and beginning performance creates an option for the offeree to complete performance but does not bind him to complete.

Ahhh I see! I must have misunderstood. Thanks a ton. You saved me emailing my prof a dumb question lol/

[BCLS]

What you said makes total sense too. If there was an offer for a reward, seeking a performance, once the offeree begins he definitely should be free to revoke.

[jlayne]

Doesn't seem right to me. Here, we were taught that in most jurisdictions, a unilateral contract that has been accepted by beginning of performance becomes an option contract that binds the OFFEROR, but it does NOT bind the offeree. He or she can continue to perform or stop performance at will. There is a three way split in jurisdictions...the other two approaches: the traditional approach is harsh and allows the offeror to revoke his offer at any time before the COMPLETION of performance. A newer rule, which is a minority, it becomes a bilateral contract at beginning of performance, and this binds BOTH the offeror and the offeree. (very small minority of jurisdictions.)

You have to keep in mind that the Restatement does not mirror the law in all jurisdictions, and it sometimes does not mirror the law in a majority of jurisdictions. It is not itself law.

Of course not in all jurisdictions. All I know is that its pretty clear in the E&E and this is precisely how I was taught in class.

I think you were taught wrong in class, or you misunderstood. Section 62(2) is only for offers that invite acceptance by EITHER promise OR performance. An offer than only invites acceptance by performance is not governed by 62(2), and beginning performance creates an option for the offeree to complete performance but does not bind him to complete.

Ahhh I see! I must have misunderstood. Thanks a ton. You saved me emailing my prof a dumb question lol/

Glad this whole thread turned out to be productive! (Although I still am wondering about the necessity of performance in a bilateral contract accepted by performance. But the more I think about it, even without looking at the law, it seems logical that in order for the performance to act as an acceptance in a bilateral contract, it must be completed, since a promise is required in a bilateral contract... and performance without completion does not fulfill a bilateral contract. So I am fairly sure that I can answer my own question, but I'd love to have some confirmation of this.

[BCLS]

Wouldnt section 62 (2) apply to a bi accepted by performance?

[jlayne]

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.

[BCLS]

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!

[JCougar]

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.

[BCLS]

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?