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YALE
LAW JOURNAL
Vol. XXVI JANUARY,^1917 No.^3
OFFER AND ACCEPTANCE, AND SOME^ OF^ THE
RESULTING LEGAL^ RELATIONS
In the study and the practice of the law, our constant problem
is: what legal relations are the result of^ facts^ that^ occur;^ or,
starting from the other direction with a given set of^ legal^ rela-
tions (such as a contract, or a debt, or the ownership^ of^ land)
our problem is:^ what^ facts^ will^ operate^ to^ cause^ such^ a^ result?
One may take either starting point; and indeed for the best
results, it is necessary to take both, alternately working^ forward
and back, correcting and amplifying our necessarily^ tentative
conclusions. In the present article, the starting point will^ be
the contractual^ relations^ themselves,^ leading back^ to^ a^ consider-
ation of some of the facts^ and^ intermediate^ relations^ that
various forms?
The term contract has been used without much discrimination
to refer to three different things: (i)^ the^ series^ of^ operative
acts of^ the parties expressing^ their^ assent^ and^ resulting^ in^ new
legal relations; (2) the physical document executed by^ the
parties as an operative fact in itself and as the lasting evidence
of their having performed^ the^ necessary operative^ acts;^ (3)^ the
relations resulting from the operative^ acts,^ consisting^ of^ a^ right
or right in personain and the corresponding duties, accompanied
by certain powers, privileges and immunities.' Clearness of
I For a masterly analysis and classification of jural relations, see an article on Some Fundamental Legal Conceptions as Applied in^ Judicial Reasoning, in 23 YALE^ LAw^ JOURNAL,^ 16,^ by^ Professor^ W.^ N.^ Hohfeld of the Yale School of^ Law.
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thought requires that whenever the term is used, one particular meaning should be consciously adopted and clearly expressed. Very likely it would be^ most^ convenient^ generally^ to^ define contract in sense (3), as the^ legal^ relations^ between^ persons arising from a voluntary^ expression^ of^ intention,^ and^ including at least one primary right in personam, actual or^ potential,^ with its corresponding duty. Unless otherwise indicated, the^ term contract will^ be^ used^ herein^ with^ this meaning.^
2
In determining whether or not a contract exists in any given case, one of our problems is^ historical^ in^ character.^ What^ were the facts? What were the^ acts^ of^ the^ parties and^ the^ circum- stances that surrounded them?^ When^ these^ have^ been^ ascer- tained the next step is analytical. Immaterial facts must be elim- inated, and the rest must be^ classified^ as^ either^ evidential^ or operative. The. operative facts are those that cause the existence of those legal relations called a contract. This analysis can only be made, and must be made, with reference to the law of contract. This law is a part of the general legal system under^ which^ we^ live,^ enforced^ by^ the^ societal organization of which we are part. What the rules of^ this society are, can be determined only by^ induction^ from^ the^ judg- ments and decrees and pronouncements of the past. Under the existing legal system no legal relation is deemed contractual^ in the absence of certain voluntary acts on -the part of two con- tracting parties. What acts are those which will cause society to come forward with its strong arm? They^ may^ well^ be described as operative^ or^ causative,^ for^ they^ are^ necessary antecedents to the creation of those legal relations and societal
2 Compare the following definitions. "The most popular description of a contract that can be given is also the most exact^ one;^ namely,^ that^ it is a promise or set of promises which the law will enforce. The specific mark of a contract is the creation of a right, not to a thing, but to another man's conduct in the future." "Every agreement and promise enforceable by law is a contract." Wald's Pollock, Contracts (3d ed.) pp. 1, 2. A contract is "an agreement enforcible at law, made between two or more persons, by which rights are acquired by one or more to acts or forbearances on the part of the other or others." Anson, Contracts (2d Am. ed., Huffcut) p. ii. "The act alone is the contract, the resulting contractual relation is quite a different thing." Holland, Jurisprudence (ioth ed.) p. 251. See also Bentham's classification,^ Works,^ III,^ i91.
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thinking that such a right is a physical relation to the res. The legal relations created are not special relations between A and B; they involve all persons alike, and exist in total independence of their voluntary action or consent. If after the transaction A should forcibly deprive^ B^ of^ the^ apples^ sold^ to^ him,^ he^ is^ com- mitting no different wrong from that committed by (^) X if he should do the same, and he is subject to no different penalties. After such a transaction the legal relations between A and^ B,^ arising by their consent, are precisely like the legal relations existing between X and B, although X has consented to nothing. Such a transaction is often called an executed contract, but it is better described as a barter or an exchange of goods.
GIFT If A has lands or chattels and executes a gift to B, which B accepts, there are acts of offer and acceptance and there is mutual assent, yet no contractual obligation is created. As in the case of a barter, the only rights involved are property rights or rights in rem. The only duties created are those general duties, binding upon non-participating persons as well as upon A. No special right in personam is created. A's rights in rein and B's former duties are extinguished, and in lieu thereof (^) similar rights are created in B and similar duties devolve upon A. The same may be said of their respective privileges, powers, immunities, and their correlatives. Thus, there are new legal relations, arising from voluntary acts of offer and acceptance. and such acts would fulfil the first definition (^) of a contract given above. A paper "deed of gift" would satisfy the second definition. The resulting legal relations, however, should not be described as contractual, according to definition (3). All other persons, and not merely A and B, are parties to these new relations.
CONTRACT If A has apples (or land) to sell, and B has no money, a barter of apples for money is not possible; but A may be willing to deliver his apples to B in return for B's promise to pay money in-the future. If B agrees to this, receives the apples (^) and promises to pay the money, a new physical relation exists as to the apples but not as to the money. As in the case of barter. or gift, society creates numerous relations between B and all other persons; as to the apples, he has rights in rem against such other persons. B's rights are property rights and not contract
OFFER AND ACCEPTANCE
rights. But the position of A is very different from that of barter. A has no money, and no rights in ren, good as against third persons who are not consenting; but a promise (^) has been made to A by B, the fulfilment of which is commanded by organized society. If (^) B fails to keep his promise, society will at A's request exercise compulsion against B, but will exercise compulsion against no other person. Special legal relations exist between A and B, A having a claim against B -that (^) he has against no (^) other person, and B having a duty that rests upon no other person. These relations, with certain others that will not here (^) be discussed,^3 constitute the obligation; and since they arise from expressions of mutual consent, they are contract. A's special right against B is called (^) a right in personam.
UNILATERAL AND BILATERAL CONTRACTS If the acts of A and B are such as (^) to create a right or rights in personam, actual or potential, (^) in favor of A and against B, but no such right in favor of (^) B against A, the contract is called unilateral. If they create mutual rights in personam with their corresponding duties, the contract is bilateral. It has sometimes been said (^) that a contract must be binding on both parties or that it is binding on neither, that mutuality of obligation is required; but this is a loose and inaccurate statement. (^) It has no application whatever in the^ case^ of^ unilateral contracts.^ 4 (I) If (^) A makes a promise in writing to pay B $Ioo and signs, seals, and delivers the document, a unilateral obligation is created. It creates a duty resting on A and a right possessed by B. (2) If A accepts a bill of exchange drawn upon him by B in
3 They are, however, of vital importance, both practically and logically.
See Hohfeld, loc. cit. (^) note I, supra. 4 Courts very frequently (^) use the term "unilateral" to (^) refer to a promise that is without consideration, especially in those cases (^) where mutual promises (^) have been given, but one of them is illusory: as where A offers a promise to carry all the milk that B may care to ship, at fixed rates, and B accepts the offer and promises to pay those rates for all milk shipped by him with A. It is not unlikely that this is the prevailing usage, but it is illogical and should be abandoned. Both A (^) and B have made promises, but neither promise has resulted in either a right or (^) a duty. There is no obligation, unilateral or otherwise. (^) A has made an offer and perhaps B still has a power of acceptance. (^) This one new rela- tion might be described as unilateral; but the same may be said (^) of any offer, and it is not customary (^) to do so. See Morrow v. So. Express Co. (1897) ioI Ga. 8io; Rehm-Zeiher (^) Co. v. Walker (1913) I56 Ky. 6; Anterican Refrig. Co. v. Chilton (19oo) 94 Ill. App. 6.
OFFER AND ACCEPTANCE
It has been said that unilateral contracts are made either by an offer of a promise (^) for an act or by an offer of an act for a promise. 10 This means, although the descriptive words are not exact, (^) that the single duty may rest on the offeror, the right being in the offeree, or (^) vice versa. The words are inexact, because the making of a promise is itself an act. All offers are acts and all acceptances are acts, whether the resulting legal relations are property as in the case of a barter, or constitute a contractual obligation, either unilateral or bilateral. In example (i) above, the offeror makes a promise (^) and undertakes a duty, but he requests no act whatever as an equivalent. (^) The only act on the part of the offeree (^) is such an act of acceptance of the physical document as may be necessary (^) to constitute a legally effective delivery by the offeror. The duty is on the offeror. In example (2), C makes the offer when he presents the bill to A for acceptance. He thereby confers upon A the legal power of 'binding himself alone to pay a (^) sum of money. In presenting the bill C does an act, but he is not offering this act as the legal equivalent and agreed return for A's promise. There is no offer of an act for a promise, but the act of the offeror was necessary before the offeree could undertake the duty. Example (3) is a case where it does hot clearly appear which one made (^) the offer. If A offered his I 0 U to be accepted by a transfer of money, it was an offer of a promise for an act. If B (^) offered a transfer of the money in return for the I 0 U, the case is just like example (4), except that there is paper evidence of A's promise. Example (4) is a case (^) where the duty is assumed by the offeree. B's act has been unhappily described as an offer of an act for a promise. B does indeed do an act when he makes the offer just as any offeror must necessarily do; but he does not offer the act, he does the act. This act is completely performed even before A hears of it and perhaps long before A makes his promise. This act, regarded as in itself the consideration for A's promise, would be past consideration. The effect of B's act in making the offer is to confer upon A a power (^) to create new legal relations. It produces this effect instantly and in so doing is wholly exhausted. The exercise of this power requires no further act upon B's part; it requires merely acceptance by A. The legal effect of this acceptance is the instant extinction
10 Anson, Contracts (2d ed., Huffcut) sec. (^) 22.
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of B's rights in rem and other property relations in respect of the horse and the creation in A of similar rights and relations. The consideration for A's promise is this substitution of rights, and it is this substitution that is offered in return for the one right in personam to be created by A's promise. Examples (5), (6) and (7) are all cases where a promise is offered for an^ act.^ That^ is,^ A^ by^ promissory words^ gives^ to^ B the power of creating in himself a right in personam as against A by doing an act or acts which A desires to be done. In (5) this act is one affecting the physical and legal^ relations^ of^ X,^ a third party. In (6) B's act effects a^ substitution^ of^ property,^ A becoming owner of the flour.^ It^ also^ effects a^ physical^ change in the location of the goods. In (7) B's act confers property upon Harry, and extinguishes such property in B. It gives B in return a right in personam against A, enforcible after 30 days. A bilateral contract is made in exactly the same way^ as^ is^ a unilateral contract or a barter. The offeror does an act con- ferring a power upon the offeree, and the offeree does the. act that constitutes the exercise of the power. The legal result, however, is a relation consisting^ of^ mutual^ rights^ and^ duties, special and personal in character. The following are examples of bilateral contracts: (9) A says to B, "I promise to serve you as bookkeeper for one month in return for your promise to pay me $ioo." B replies, "I accept." (IO) A writes to B, "I promise to convey Blackacre to you on June^ Ist^ in^ return^ for^ your^ promise to^ pay^ me^ $I,ooo^ at^ that time. You may accept by cable, using the one word 'Blackacre'." B sends the cable despatch "Blackacre," as requested. In case (9) the acts of offer and acceptance are^ oral^ promissory words. In case (io) the offer is the act of writing and the further acts whereby this writing is brought to the offeree. The acceptance consists^ of^ acts^ by^ B,^ whereby^ he^ directs^ the^ cable company to transmit the word "Blackacre." These acts by B would not customarily amount to a promise to pay $i,ooo, but in this case they do become such a promise because A will so interpret them and B knows it. In the same way any other act, in itself meaningless, may be specified and may thereby become a return promise. It is not always an easy matter to determine whether a contract is in^ fact^ unilateral^ or^ bilateral.^ Frequently,^ this^ determination will have very important results, especially where the offeror has
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Suppose A writes to B, "I will pay you $5,ooo for Blackacre," and B replies, "I accept your offer." This seems to be bilateral, and it is too late for A to revoke. A clearly makes a promise to pay money; and, according to the ordinary understanding of mankind, he requests B to make a return promise to convey the land. But if A has asked an actual conveyance of Blackacre as the equivalent of his promise, there is no contract at all, and A may (^) revoke. In example (8) above, some courts have found in the words of the parties a promise by A to pay to B a year's salary and a return promise by B to serve for a year. (^) In such case the hiring is not at will, but for a year; and this despite the fact that there are no express^ promissory^ words^ of^ that^ sort.
3
In example (6) above, it has often been held that the offeree may accept by mailing a letter containing a promise to supply the goods-an "acceptance of the order," and that a revocation after such acceptance is too late, even though the goods are not yet shipped.' 4 It must not be assumed too readily that an order for goods is an offer of a promise in return for title to the goods to be effected by the act of shipment or otherwise. The offeror frequently wishes a return promise, as the offeree under- stands. The language used may be elliptical, and understood to be so. EXPRESS, IMPLIED, AND TACIT CONTRACTS A brief definition of these terms will suffice here. An express contract is said -to exist when the acts of the parties declaring their will and intention (^) are spoken or written words. A tacit contract is any other kind, the acts of the parties being sufficient
action shall take place. Dunton v. Dunton (1892) 18 Vict. L. R. 114; Jamieson v. (^) Renwick (1891) 17 Vict. L. R. 124; Lewis v. Atlas Mut. Life Ins. Co. (1876) 61 Mo. 534; cf. Binnington (^) v. Wallis (1821) 4 B. & Ald. 65o. On the other hand, where the defendant had made a written promise to remain with the plaintiff for two years for the purpose of learning to be a dressmaker, the court refused to draw the inference of a promise by the defendant to serve or of a promise by the plaintiff to employ. Lees v. Whitcomb (1828) 5 Bing. 34, 2 M. & P. 86. 13 Beach v. Mullin (1870) 34 N. J. L. 343, 345; Grossman v. Schenker (1912) 2o6 N. Y. 466. See Mechem, Agency (2d ed.) sec. 6o3. 24American Pub. Co. v. Walker (igol) 87 Mo. App. 503; Gordon Malt- ing Co. v. Bartels Brewing Co. (1912) 26 N. Y. 541; Sanford v. Brown Bros. Co. (1913) 2o8 NM. Y. go; Bauman v. McManus (19o7) 75 Kan. io6.
O'FFER AND ACCEPTANCE
to express their^ intention^ but^ not^ consisting^ of^ words,^ either spoken or written.^ It^ can^ easily^ be^ seen^ that^ a^ tacit^ contract^ is also, in a broader sense,^ an^ express^ one.^ Words^ are often^ lame and halting things in^ performing^ their^ function^ of^ expressing thought. It is often true^ in^ fact^ that^ actions^ speak^ louder^ than words. The term^ implied^ contract^ is^ generally^ used^ to^ mean exactly the^ same^ as^ tacit^ contract.^ The^ intention^ of^ the^ parties is "implied" or inferred^ from^ their^ actions^ other^ than^ words. For some centuries,^ however,^ it^ has^ been^ customary^ to^ describe as a "contract implied^ in^ law"^ certain^ other^ legal^ relations,^ in cases where neither^ the^ words^ of^ the^ parties^ nor^ their^ other^ acts justify an^ inference^ that^ they^ intended^ to^ create such relations. This usage seems^ to^ have^ been due^ to^ two^ reasons:^ in^ the^ earlier cases the^ courts^ desired^ to^ make^ the^ form^ of^ action^ called assumpsit available^ for^ the^ enforcement^ of^ certain^ duties^ not intentionally assumed;^ and^ in^ some^ of^ the^ later^ cases^ the courts desired to avoid^ the^ appearance^ of^ creating^ legal^ rights^ and duties where the^ parties had^ not^ so^ agreed.^ Thus^ the^ term^ implied contract became a^ slippery^ one^ upon which^ judicial^ reasoning^ has not infrequently slipped^ into^ error.^ The^ legal^ relations^ commonly described as^ contracts^ implied^ in^ law^ are^ now coming^ to^ be^ called quasi contracts.^ It^ is^ not^ necessary^ here^ to^ describe^ what^ these are; it is enough^ to^ observe^ that^ they are^ not^ contracts^ in^ fact, either express or^ tacit.
VOID, VOIDABLE, AND^ UNENFORCIBLE^ CONTRACTS
The term^ void^ contract^ is^ an^ apparent^ self-contradiction.^ This depends, however,^ upon^ the^ sense^ in^ which^ we^ are^ using^ the^ term contract. In^ this^ case^ it^ appears^ to^ be^ used^ to^ refer^ to^ the^ acts^ of offer and acceptance by^ the parties^ or^ to^ the^ document^ evidencing such acts. In the^ case^ of a^ void^ contract, the^ parties^ perform^ acts that would usually^ operate^ to^ create^ new^ contractual^ relations,^ but fiave no^ such operation^ in^ the^ particular^ case.^ Rights^ and^ other relations will exist^ after^ such^ a^ transaction,^ but^ they^ will^ not^ be contract rights^ and^ relations.^ A^ contract^ right^ is^ a^ primary right in^ personam^ arising from^ expressions^ of^ consent.^ In^ the case of^ a^ void^ contract,^ there are^ expressions^ of^ agreement,^ but they do not^ have^ the usual^ legal^ effect.^ If^ these^ acts^ are^ mere words, they are^ not^ operative^ facts^ at^ all.^ Standing^ alone, they have no legal effect.^ They^ may,^ however,^ be accompanied^ by
OFFER AND ACCEPTANCE
It appears that this^ difference^ is^ not^ as one^ author^ says,^ "mainly a difference between substance and^ procedure."'^1 The^ difference between a power to create a^ right^ against another^ person^ and^ a power to create a right against^ only^ oneself^ is^ not^ merely procedural. Both voidable and unenforcible contracts^ are^ like valid^ con- tracts in this:^ there^ have^ been^ acts^ expressing^ agreement,^ and they are legally operative^ facts creating^ new^ legal^ relations.^ The resulting legal^ relations^ are^ different from^ those^ existing^ in^ the case of a valid contract; but^ these^ relations^ are^ distinct^ in character, are of considerable practical^ importance, and^ deserve even better^ names^ than^ they^ have^ received. There are next^ to^ be^ considered^ the^ acts^ of^ offer^ and^ accept- ance by means^ of^ which^ the^ foregoing^ legal^ relations^ are^ finally established, and^ also^ some^ of^ the^ intermediate^ relations^ that^ arise prior to the closing of the^ contract.
THE OFFER
Definition. An^ offer^ is^ defined^ above as^ an^ act^ whereby^ one person confers upon^ another^ the^ power^ to^ create^ contractual relations between them.^ It^ has^ not^ been^ customary^ to^ describe as a "power" the new^ legal^ relation^ consequent^ upon^ an^ offer;" but this term seems to^ be^ the^ most^ accurate^ description^ of^ that relation. It^ is^ similar^ to^ the^ relation^ existing^ in^ the^ case^ of agency."" The^ principal,^ by^ an^ act^ called^ "appointment," creates in the agent the^ power^ of^ creating^ (in^ conjunction^ with a third person) new legal^ relations^ between^ the^ principal^ and a third person. After the^ one^ voluntary^ act^ of^ the^ principal called "appointment,"^ nothing^ further^ remains^ to^ be^ done^ by him; thereafter it^ is^ the^ voluntary^ act^ of^ the^ agent^ that^ is^ opera- tive to create new^ relations.^ So^ in^ the^ case^ of^ an^ offer:^ the^ act of the offeror operates^ to create^ in^ the^ offeree^ a^ power,^ and having so operated it is^ exhausted;^ thereafter^ the^ voluntary^ act^ of 18 Anson, Contracts (2d^ Am.^ ed.,^ Huffcut)^ sec.^ i9. 17 The first, and^ the^ best,^ presentation of this^ concept^ that^ has^ been^ seen by the writer is in^ the article^ on^ Some^ Fundamental^ Legal^ Conceptions as Applied in Judicial Reasoning, in^^23 YALE^ LAW^ JouRNAL,^ i6,^ 49,^ by Professor W. N.^ Hohfeld,^ to^ whom^ the^ writer^ acknowledges^ great^ in- debtedness. In Jordan v. Dobbins^ (1877)^^122 Mass.^ I68,^ the^ court^ speaks of a^ continuing^ guaranty^ as^ "a^ power^ or^ authority^ which^ he^ might^ at^ any time revoke." 18 See Hohfeld, loc. cit. p.^ 46.
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the offeree alone will operate to create the new relations called a contract.
The Operative Act. What kind of act creates a power (^) of acceptance and is therefore (^) an offer? It must be an expression of will or intention. It must be an act that leads the offeree reasona- bly to believe that a power to create a contract is conferred upon him. This applies to the content of the power as well as to the fact of its existence. It is on this ground that we must exclude invitations to deal or acts of mere preliminary negotiation, and acts evidently done in jest or without intent to create legal rela- tions. All these are acts that do not lead others reasonably to believe that they are empowered "to close the contract." So long as it is reasonably apparent that some further act of the offeror is necessary, the offeree has no power to create contractual relations by an act of his own and there is as yet no offer.
Communication. No act can induce another to believe that he is empowered to accept unless he is aware that the act has been performed. So it would seem to be (^) essential that an offer shall be communicated to the offeree, and it has generally been held that acceptance is impossible (^) prior to such communication. Thus, where a reward was offered by publication, (^) for service desired, it has been held that the rendition of the service in ignorance of the offer creates no (^) contract. 9 The contrary has been held in some cases.2 0^ Some judges have thought that where two offers, identical in terms, cross each other in the mail, there is no contract. 2 ' In these two instances there is no contract if the only way to create a contract is by the machineiy of offer and acceptance, regarded as acts expressing consent. In the reward cases, the offeror (^) has acted and has consented; the offeree has acted but his act was not an expression of consent. In the case of (^) crossed offers, each party has acted and has expressed consent;
19 Fitch v. Snedaker (1868) 38 N. Y. 248; Vitty v. Eley (igoo) 5I App. Div. (^) (N. Y.) 44; Williams v. West. Chi. St. Ry. (igoi) I9I Ill. 6io. 20 Gibbons v. Proctor (1891) 64 L. T. (N. S.) 594; disapproved by Pollock, Contracts (3d ed.) p. 21; also by Anson, Contracts (2d. Am. ed., Huffcut) p. 25; also by Ashley, Contracts, p. iS. Smith v. State (1915) x5i Pac. (Nev.) 512; Dawkins v. Sappington (1866) 26 Ind. 199; Stone v. Dysert (1878) 20 Kan. 123; Cummings v. Gann (1866) 52 Pa. St. 484; Neville v. Kelly (1862) 12 C. B. (N. S.) 740. 2t Tinn v. Hoffman (1873) 29 L. T. (N. S.) 27i; two judges contra.
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considerably longer. (^24) If the time taken (^) by the offeree would appear to be reasonable (^) to a reasonably (^) prudent man in his position, the acceptance (^) is operative even (^) though the offeror (^) did not (^) intend the power to exist (^) for so long a period. (^) A reasonable time may be longer than the offeror (^) in fact intended. (^) On the other hand, there (^) seems to be no good (^) reason for holding (^) that the power of acceptance (^) has expired if (^) it can be shown as (^) a fact that (^) the offeror intended (^) that it should still (^) exist. A reasonable time may (^) be longer than the (^) offeror intended, but (^) it can never^ be^ less.^ 25 Revocation. (^) In most cases (^) the offeror may terminate (^) the power of acceptance (^) prior to the end of (^) the specified period, (^) if any, or of the (^) reasonable time. In (^) the first place he may (^) have expressly (^) provided that (^) the power should be (^) subject to revoca- tion, either by notice to the offeree or without (^) such notice. If (^) he provides for a (^) revocation without notice (^) and bT a mere change of his mental (^) state, he can scarcely (^) be said to have (^) conferred any power at all. The (^) power conferred by (^) such an offer is a very flimsy one indeed, (^) for the validity (^) of the acceptance will (^) depend upon the offeror's (^) own will when he is notified (^) of the acceptance. Such an offer is little (^) more, in effect, than (^) an invitation for bids. If the reserved (^) power of revocation (^) is to be exercised (^) by an overt act, (^) then there is a substantial (^) power of acceptance, (^) the validity of the act of (^) acceptance being then (^) not dependent upon the (^) will of the (^) offeror. Even though (^) the power to revoke (^) has not been expressly reserved by (^) the offeror, it can be (^) said that as a general (^) rule he retains such (^) a power. In such (^) a case, however, (^) the power to revoke can (^) be exercised only in (^) a particular manner. (^) If the offer was (^) made by publication, (^) it has been held (^) that it can be (^) revoked either by actual (^) notice to a claimant (^) or by a notice published in the (^) same manner as was (^) the offer.^20 If the (^) offer
(^24) The German Civil Code, (^) sec. 147, lays down substantially (^) the same rule. 25 All (^) that would seem to be (^) necessary is overt action (^) by the offeror sufficiently (^) indicating, his (^) intention that the power (^) shall continue. This principle (^) is involved in the (^) facts of A1actier v. Frith (^) (183o) 6 Wend. (N. Y.) lo3; Tinn v. Hoffman (^) (1873) 29 L. T. (N. (^) S.) 271. See criticisms of Mactier v. Frith, (^) in Langdell, Summary (^) of Cont., sec. 14, and Ashley, Contracts, 2 p. 48. 0SZuey v. U. S. (1875) (^) 92 U. S.73; Pollock (^) says of this case: "it seems a rather strong (^) piece of judicial legislation." (^) Wald's Pollock, Contracts (^) (3d ed.) p. 23. To (^) the writer it seems no (^) stronger than are
OPFER AND ACCEPTANCE
was made by personal communication to^ one^ or^ more^ particular persons, it can be revoked only by giving notice^ to^ them,^ such notice being effective only when^ received."^7 Irrevocable Offers. It has been asserted^ that^ no^ offer^ can^ be irrevocable, 28 various^ reasons^ being^ advanced^ for^ such^ a^ con- clusion. It may be that^ by^ the^ prevailing^ rule^ of^ the^ common law offers are^ always^ revocable;^ it^ may^ even^ be^ true^ that considerations of policy and convenience require that^ all^ offers shall be revocable; but it is here insisted that^ the^ question^ of^ their revocability is not to be determined by rules^ of^ pure^ logic^ or^ of mathematics, that there is no inevitable necessity or^ universal law foreclosing discussion. The principle here to^ be^ adopted
the decisions on any other rule of the law. See also Sears v. Eastern R. Co. (1867)^14 Allen^ (Mass.)^ 433.^ The^ same^ rule^ is^ adopted^ by^ the^ Ger- man Civil Code, sec. 658, and by the Jap. Civil Code, art. 530. 27 Byrne v. Van Tienhoven (i88o) 5 C. P. D. (^) 344; Stevenson v. McLean (188o) 5 Q. B. D. 346. See also Dickinson v.^ Dodds^ (1876)^ 2 Ch.^ D.^ 463; Frank v. Stratford (19o4) 13 Wyo. 37. In the early case of Hurford v. Pile (1615)^ Cro.^ Jac.^ 483,^ an^ offer seems to have been held to be irrevocable. The^ entire^ report^ is^ as^ follows: Assumpsit. Whereas J. S. being in execution for^ forty^ pounds,^ the defendant said, "Deliver J. S. out of execution, and what it cost you^ I will repay;" wherefore J. S. was discharged by the plaintiff. The defend- ant for plea saith, that after the assumpsit, and before^ the^ plaintiff^ had done any thing in that business, he forbade him to meddle therein, and that he would not stand to his promise. The plaintiff demurred; and^ it was adjudged for the plaintiff. Houghton, Justice, said, that a^ man^ may^ discharge^ an^ assumpsit^ made to himself, but he cannot discharge an assumpsit made by himself: but, at another day, the defendant's counsel moved,^ that^ it^ was^ a^ good^ plea, and that as long as nothing was done, it was but an executory promise. Doderidge. If I promise to J. S. that if he build an house upon my land before Michaelmas, I will pay him a hundred pounds, and I counter- mand it before he hath done any thing'concerning the house, it^ is^ a^ good countermand. Houghton contra; but he said, that may be considered in damages adjournatur. Afterwards, in Trinity term, judgment was given for the plaintiff. See also^ Howe^ v.^ Beeche^ (1685)^^3 Lev.^ 244. 28 "It is indispensable to the making of a contract (^) that the wills of the contracting parties do, in legal contemplation, concur^ at^ the^ moment^ of making it. An offer, therefore, which the party making it has no power to revoke, is a legal impossibility." Langdell.^ Summary^ of^ the^ Law^ of Contracts, sec. 178, also sec. 4.^ See^ also,^ Wormser,^ The^ True^ Conception of Unilateral Contracts, 26 YALE LAW JoURNAL, 137, note; Lee,^ Contract, Jenks, Digest of Eng. Civ. Law, sec. i9"; Ashley, Contracts, sec.^ 13.
OFFER AND ACCEPTANCE
PhysicalLimitation. Irrevocability may have any^ one^ of several meanings: first, that the offeror has^ no^ legal^ power^ to^ revoke^ by any means,^ lawful^ or^ unlawful;^ second,^ that^ he^ is^ not^ legally privileged to^ revoke,^ although^ he^ may^ have^ the^ legal^ power; third, that although he^ has^ both^ the^ legal^ power^ and^ the^ privilege^ of revoking by certain means,^ these^ means^ are^ not^ within^ his^ present physical capacity. Under our^ law^ nearly^ all^ offers^ are^ for^ a^ time irrevocable in the third sense. Revocation^ can^ take^ place^ only after a^ certain^ fashion,^ commonly^ by^ giving^ actual^ notice^ to the offeree. So long^ as^ it^ is^ impossible^ to^ reach^ the^ offeree with such a^ notice^ or^ to^ do^ such^ other^ act^ as may^ amount to^ a revocation, the power^ of^ acceptance^ will^ continue^ to^ exist. 83
This means that although the^ offeror^ is^ privileged^ to^ revoke^ and has the legal power to revoke by doing^ certain^ acts,^ the^ perform- ance of these acts^ is^ beyond^ his limited^ human^ capacity. Contractual Limitation. An offeree's power^ is^ irrevocable^ in the second sense,^ either^ by the giving^ of^ notice^ or^ otherwise,^ if^ the offer is put^ in^ the^ form^ of a^ conditional^ covenant^ or^ simple contract, 4 or if the offer is^ accompanied^ by^ a^ promise^ not^ to
tiffs." See also Boston and Maine R.^ Co.^ v.^ Bartlett^ (1849)^3 Cush. (Mass.) 224; Nyulasy v. Rowan (i8gi)^^17 Vict.^ L.^ P.^ 663.^ If^ an^ offer were at every^ instant^ revocable,^ these^ decisions^ would^ be^ wrong,^ and Cooke v. Oxley^ (1790)^^3 T.^ R.^653 would^ not^ have^ been^ overthrown. 33 See Ashley,^ Contracts, p.^ 34. 34 O'Brien v.^ Boland^ (1896)^ I66^ Mass.^ 481;^ Watkins v.^ Robertson^ (i9o6) 105 Va. 269; Danbinann v.^ Rittler^ (i889)^^70 Md.^ 380;^ McMillan^ v. Ames (1885) 33 Minn.^ 257.^ Some^ cases^ refuse^ specific^ performance,^ if revocation preceded acceptance,^ but^ expressly^ on^ the ground^ of^ lack^ of consideration, and they indicate^ that^ the^ offer^ is^ irrevocable^ if^ a^ con- sideration is paid. Corbett v. Cronkhite^ (9o9)^^239 Ill.^ 9;^ Crandall^ v. Willig (1897) i66 Il.^ 233;^ Graybill^ v.^ Brugh^ (1893)^^89 Va.^ 895;^ Bishop Contracts, sec. 325. In i Ames, Cases on Equity,^ p.^ 2oo,^ is^ the^ following note: "if after giving an option to^ buy^ certain^ property^ the^ giver^ makes a will devising^ the^ specific^ property,^ the^ courts,^ to^ effectuate^ the^ supposed intention of the testator,^ give^ to the^ devisee^ the^ land,^ if^ the^ option^ is^ not exercised, and the proceeds, if^ the^ holder^ ol^ the^ option^ elects^ to^ buy. Drant v. Vause^ (1842)^1 Y.^ &^ Coll.^ 58o;^ Emuss^ v.^ Smith^ (1848)^^2 De^ G. & Sm. 722;^ In^ re^ Isaacs^ [x894]^ 3 Ch.^ 5o6,^ 51o;^ In re^ Pyle^ [1895]^ I^ Ch. 724." The devise is an^ apparent^ act^ of^ revocation,^ but^ a^ subsequent acceptance is effective, and^ the^ acceptor^ is^ entitled^ to^ specific^ performance. Butler and Baker's Case (159I)^^3 Coke,^^25 a,^26 b,^ presents^ a^ good illustration of an irrevocable power: "If^ A^ makes^ an^ obligation^ to^ B and delivers it to C to the use of B, this is^ the^ deed^ of^ A^ presently;^ but if C offers it to B, there B may refuse^ it^ in^ pais,^ and thereby the^ obliga- tion will^ lose^ its^ force."^ This^ is^ a^ covenant, delivered^ in^ escrow,^ con-
YALE LAW JOURNAL
revoke given for a consideration or under seal. In (^) such case the offeror (^) is never privileged to revoke, and (^) he may not even have the legal power. It may be (^) said that these are contracts and are not mere offers; but (^) the fact remains that in all such cases (^) the act of (^) the offeror has conferred upon (^) the offeree a power to create (^) future relations, a power that (^) is in all respects similar to the power conferred by (^) any offer, a power to 'be exercised (^) by the voluntary (^) act of the offeree alone. The offeree is not bound to do the act that constitutes the (^) condition or acceptance; but if (^) he does do (^) that act, new contractual relations (^) are created. When the courts (^) enforce the duties included among (^) these relations, they do so (^) expressly on the theory that there (^) was an offer that could not be revoked.^35
ditional only upon B's assent. (^) A has no power of revocation, (^) as is universally held. It is (^) due to the fact that B's power is irrevocable (^) that the courts have called the existing relations (^) a contract, a tendency notice- able in other cases. See notes (^41) to 47, below. Some will maintain (^) that in this case B has a right; (^) but if so, he also has the power (^) to destroy it by a mere expression (^) of dissent, and this cannot (^) be said of contract rights in general. 3 In O'Brien (^) v. Boland, supra, the court said: "In (^) the present case, because the offer was (^) under seal, it was an irrevocable (^) covenant, condi- tional upon acceptance (^) within ten days, and the written (^) acceptance within that time made (^) it a mutual contract which the plaintiff (^) can enforce." In Guyer v. Warren (1898) 175 IIl. 328, it is said: (^) "The covenant in the present contract, giving (^) an option to purchase, was in the (^) nature of a continuing (^) offer to sell." In Willard v. (^) Tayloe (1869) 8 Wall (U. S.) 557, Justice Field (^) said: "The covenant in the lease giving (^) the right or option to purchase (^) the premises was in the nature (^) of a continuing offer to (^) sell. It was a proposition.... from (^) which the defendant was not at liberty to recede." On the other hand, in Mansfield (^) v. Hodgdon (1888) 147 Mass. (^) 304, Mr. Justice Holmes said: (^) "The defendant's undertaking not (^) having been a mere offer, (^) but a conditional covenant to sell, bound (^) him irrevocably to sell in case (^) the plaintiff should elect to buy." In Galton v. Emuss (^) (1844) I Coll. 243, one Nash contracted (^) with Galton that he should (^) "have the offer, for twelve months, (^) of both the estates.... by the trustees under the will of the said John Nash." Later Nash (^) devised the estates to the trustees, (^) defendants, for other uses and with no power to convey to the (^) plaintiff. The trustees refused to offer the estates to the plaintiff (^) on the agreed terms, but the plaintiff gave them (^) notice of this intention to purchase. (^) Vice Chancellor Knight Bruce decreed specific (^) performance. In Jordan v. Dobbins (1877) (^122) Mass. 168, a conditional covenant was held to be revocable.
