Cook v. Coldwell Banker/Frank Laiben Realty Co.

Missouri Court of Appeals · Contracts

Contractsbonus agreementreal estate agentunilateral contractacceptance by performancesubstantial performancerevocationat-will relationship

Facts

Defendant announced an oral bonus program in March 1991 under which agents who reached specified commission levels would receive bonuses, with amounts above the first $500 to be paid at the end of the year. Plaintiff, an independent-contractor real estate salesperson working under a verbal arrangement, exceeded the commission thresholds during 1991 and by September had earned over $32,400 in commissions. At a September meeting, defendant stated bonuses would instead be paid at a banquet in March of the following year and indicated an agent had to still be "here" in March to receive the bonus. Plaintiff stayed through the end of 1991, earned total commissions of $75,638.47, then left in January 1992 and was told she would not receive the remaining bonus.

Issue

Whether plaintiff made a submissible case for breach of a unilateral bonus contract by showing acceptance through performance before defendant attempted to revoke or modify the offer. The appeal also raised whether the trial court committed reversible error in its jury instruction, limits on closing argument, and evidentiary rulings.

Rule

A promise to pay a bonus in return for an at-will employee's continued employment is an offer for a unilateral contract that becomes enforceable when accepted by the employee's performance. In the unilateral-contract context, an offer may not be revoked once the offeree has rendered a substantial part of the requested performance, and a separate jury finding of consideration is unnecessary where the instruction requires performance with intent to accept the offer.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In Phoenix, Desert Mesa Design told its at-will sales consultants in January that any consultant who remained through December and generated at least $200,000 in revenue would receive a 10% bonus, payable on December 31. Lena Ortiz stayed all year and exceeded the target, but the company refused to pay, arguing she never expressly accepted the offer.

Is Lena most likely entitled to recover the bonus?

Explanation. A promise to pay a bonus in return for continued at-will work is an offer for a unilateral contract. Under the majority opinion, the contract becomes enforceable when the employee accepts by performing the requested acts. Lena remained employed through December and met the revenue target, so her performance constituted acceptance. A separate express promise was unnecessary. (Derived from Cook v. Coldwell Banker/Frank Laiben Realty Co. (n.d.).)