Davis v. Jacoby

Supreme Court of California · 1934 · Contracts

Contractsunilateral contractbilateral contractpromisefull performancebilateral contractunilateral contractacceptance

Facts

Rupert Whitehead, whose wife was gravely ill and whose own health and finances were poor, wrote to Frank and Caro Davis asking them to come to California, help care for Blanche Whitehead, and assist Rupert with his affairs, stating that if they came, Caro would inherit everything he possessed at his death. On April 14, 1931, Frank Davis sent a letter unequivocally accepting the offer on behalf of himself and Caro and stating they would leave Windsor on April 25 after he completed a court appearance. Whitehead received that acceptance and later wrote back expressing concern about the trouble and expense but not rejecting the arrangement. Before plaintiffs arrived, Whitehead committed suicide; plaintiffs then came to California, and Caro fully cared for Blanche until Blanche's death, while plaintiffs had already begun abandoning their home and business in reliance on the agreement.

Issue

Was Whitehead's April 12 letter an offer for a unilateral contract that could be accepted only by completed performance, or an offer for a bilateral contract that was accepted by plaintiffs' return promise? If it was a bilateral contract, were plaintiffs entitled to specific performance after fully performing?

Rule

A unilateral contract involves no promissory consideration from the offeree, while a bilateral contract consists of mutual promises. In cases of doubt, an offer is presumed to invite a bilateral contract by a promise to perform rather than a unilateral contract by actual performance, because a bilateral contract immediately protects both parties. When the offer indicates the mode of acceptance, an acceptance in accordance with that indicated mode is binding on the offeror.

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Eleanor Pike, an elderly widow in Santa Fe, writes to her nephew Jonah Reed and his spouse, Mia: "If you move here, handle my finances, and stay with my sister after I am gone, Mia will receive everything I own. Please write me right away so I know what to count on." Jonah immediately mails a letter stating that he and Mia accept and will arrive in ten days, but Eleanor dies before they reach New Mexico.

Was a contract formed before Eleanor's death?

Explanation. The majority rule is that when it is doubtful whether an offer calls for a promise or only for performance, the law presumes a bilateral contract. That presumption is strengthened where the offeror seeks immediate assurance, as shown by a request to "write me right away" so she can know what to count on. The return letter promising to come and perform accepts in the indicated mode and forms a binding contract before death.