Industrial America, Inc. v. Fulton Industries, Inc.

Supreme Court of Delaware · 1971 · Contracts

285 A.2d 412 (Del. 1971)

Updated July 26, 2026

Contractsunilateral contractacceptance by performanceobjective assentsubjective intentbroker's commissionguarantynotice of acceptance

Facts

Fulton's Wall Street Journal advertisement included the phrase "Brokers fully protected." On remand, plaintiff was permitted to amend its complaint to assert that this language was a guaranty by Fulton to pay any broker's commission owed by B-H. The jury found that the phrase conveyed to one knowledgeable in industrial brokerage an offer by Fulton to guarantee any commission owed to plaintiff, and that the offer was still in effect when Deutsch sent letters to Fulton in October 1965. It was uncontroverted that Deutsch knew of the advertisement at that time, took a copy from his files, and then sent the letter that initiated the events culminating in the merger of B-H into Fulton.

Issue

When an offer invites acceptance by performance, must the offeree prove subjective intent or actual reliance on the offer in order for performance to constitute acceptance? Also, was Fulton given sufficient notice of acceptance where it knew of plaintiff's submission of B-H's name?

Rule

Contract formation turns on objective manifestation of assent, not subjective intent. Where an offer invites acceptance by performance, the relevant questions are whether the offer invited acceptance by performance, whether the offeree knew of the offer, and whether the offeree intentionally performed the invited act; absent a manifestation of intention not to accept, such performance constitutes acceptance, and no separate proof of subjective reliance is required. If the offeror knows of the act constituting acceptance, that knowledge is sufficient notice where the doing of the act is itself sufficient acceptance.

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A manufacturing holding company in Chicago places a trade-journal advertisement stating, "Intermediaries protected," and inviting consultants to submit acquisition prospects. Nina Patel, a business broker in Milwaukee, knows of the advertisement and intentionally sends the company a prospect's name; months later, the deal closes, and a jury finds Nina was the procuring cause. Nina admits she sent the submission mainly because a former client urged her to do it, not because of the advertisement.

If the company argues no contract arose because Nina was not subjectively motivated by the advertisement, how should a court rule?

Explanation. The majority rule is that contract formation turns on objective manifestation of assent, not subjective motive or reliance. If the offer invited acceptance by performance, the offeree knew of the offer, and she intentionally performed the invited act, performance is acceptance absent a manifested intention not to accept. Her primary reason for acting is immaterial. (Derived from Industrial America, Inc. v. Fulton Industries, Inc. (1971).)