Cook v. Coldwell Banker, Frank Laiben Realty Co., 967 S.W.2d 654 (1998)

Case Name: Cook v. Coldwell Banker/Frank Laiben Realty Co.
Plaintiff/Appellee: Mary Ellen Cook
Defendant/Appellant: Coldwell Banker/Frank Laiben Realty Co.
Citation: 967 S.W.2d 654 (1998); Missouri Court of Appeals

Under unilateral contract theory, did the defendant breach a contract when he revoked an offer that was already substantially performed on by the plaintiff?

Key Facts: At a meeting in March 1991, the defendant announced a bonus program with three levels of payouts, the first of which would be paid out immediately while the second two would be paid out at the end of the year. The year of the program would be January 1, 1991 to December 31, 1991. At the end of April, 1991, plaintiff met the first level and received her first bonus in September, 1991. In September, 1991 plaintiff surpassed had met the highest level of commissions and was told at a meeting in that month that the bonuses would not be paid out until March of the following year. Plaintiff was also told that she would have to be employed with the defendant in March to receive the bonus. Plaintiff accepts another job in January, 1992 and sought payment of her bonus in March, 1992.

Procedural History: In December, 1992 the plaintiff filed an action against defendant for breach of a bonus contract and sought damages. The jury found in favor of the plaintiff and awarded her damages in the amount of $24,748.89. The defendant appealed.

Holding: The plaintiff showed evidence that the defendant offered to pay a bonus at the end of 1991 if she would continue to work for it. The plaintiff stayed through 1991 with an intent to accept the offer. In addition, she sold and listed enough property to qualify for all three bonus levels. The defendant knew of the plaintiff’s performance but only paid the first bonus. Therefore, the defendant breached a unilateral contract.

Reasoning: This contract was determined to be unilateral because performance was based on the wish of the parties. In a unilateral contract, when a promise performs, the contract is enforceable to the extent performed.

Judgment: The Missouri Court of Appeals affirmed the trial court’s judgment and the awarded damages.

The meeting in September represented a revocation of the initial offer.

The Restatement approach (modern rule) the offeree has to show substantial performance. The court should have said substantially begun performance. Instead of just doing nothing or preparing to perform.

Under the modern rule, the offeree has still not made a promise if he decides to back out of the contract after performing half of it.

Tender of performance – the statement of intent and the present ability to perform. Once a tender of performance has been made, the offeror can no longer evoke the offer.

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