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know that a contract has been made. But where the promise is in consideration of an act to be done, it becomes binding upon the doing of the act so far that the promise cannot be affected by a subsequent withdrawal of it, if within a reasonable time afterward he notifies the promisor." 16 That the performance of the act requested by the guarantor completes the contract, and that notice if necessary at all is necessary only as a condition subsequent, is shown by the fact that if notice is not given within a reasonable time, the guarantor may waive his defense and incur liability by a subsequent promise to pay, 17 or the necessity of notice may be waived in the offer.18 If an element necessary for the formation of a contract had been omitted, this result could not be reached. No subsequent gratuitous promise can vitalize an agreement which never became a contract. 19 Jurisdictions which require notice of the acceptance of a guaranty generally hold that such notice must be given in case of a continuing guaranty within a reasonable time after the close of all the transactions under the guaranty.20 If an acceptance analogous to that

16 Bishop v. Eaton, 161 Mass. 496, 499, 37 N. E. 665, 42 Am. St. Rep. 437. Cf. Cumberland Glass Co. v. Wheaton, 208 Mass. 425, 94 N. E. 803. See also Singer Mfg. Co. v. Littler, 56 Ia. 601, 9 N. W. 905.

So in United States &c. Co. v. Riefler, 239 U. S. 17, 24, Holmes, J., in speaking of a contract of indemnity under seal said: "If [the indemnitors] had made only a parol offer in the same terms, the company by becoming surety would have furnished the consideration that would have converted the offer into a contract, but notice is held necessary in Davis Sewing Machine Co. v. Richards, 115 U. S. 524, 29 L. Ed. 480, 6 Sup. Ct. 173."

17 Gamage v. Hutchins, 23 Me. 565; Signourney v. Wetterell, 6 Metc. 553; Ashford v. Robinson, 8 Ired. 114.

18 Holmes v. Schwab, 141 Ga. 44, 80 S. E. 313; Swisher v. Deering, 104 Ill. App. 572; Valley Nat. Bank v. Cownie, 164 Ia. 421, 145 N. W. 904;

Hughes v. Roberts, etc., Shoe Co., 24 Ky. L. Rep. 2003, 72 S. W. 799; Crittenden v. Fiske, 46 Mich. 70, 8 N. W. 714, 41 Am. Rep. 146; International Text Book Co. v. Mabbott, 159 Wis. 423, 150 N. W. 429.

19 Conditions subsequent to the existence of a contract may also exist in bilateral contracts, e. g., the approval of a court when necessary to confirm a judicial sale, or of the Secretary of the Interior when necessary to confirm a contract with Indians. Crosbie v. Brewer, 158 Pac. 388.

20 Douglass v. Reynolds, 7 Pet. 113, 8 L. Ed. 626; Louisville Mfg. Co. v. Welch, 10 How. 461, 13 L. Ed. 497; Cremer v. Higginson, 1 Mas. 323; Wildes v. Savage, 1 Story, 22, 23; Craft v. Isham, 13 Conn. 28; Davis S. M. Co. v. Mills, 55 Iowa, 543, 8 N. W. 356; Singer Mfg. Co. v. Littler, 56 Iowa, 601, 9 N. W. 905; German Sav. Bank v. Drake Roofing Co., 112 Ia. 184, 192, 83 N. W. 960, 51 L. R. A.

in bilateral contracts were required, the proper time for it would be at the outset of the transactions under the guaranty, not at their close.

Again, an exception to the rule discharging the guarantor for lack of notice is made when it appears that the guarantor has not been injured by the delay in giving notice.21 If notice were in truth a requisite for the formation of the contract, the fact that the lack of notice worked no injury, would be immaterial.

§ 69b. Notice of allotment of shares.

It has been sugested 22 that the principle under consideration is also applicable to cases where shares are allotted in a new company on application by mail. It has been held that the applicant is bound on notice of the allotment being mailed to him.23 And the sugestion made is that the contract created is unilateral and is completed by the allotment of the shares; the subsequent notice of allotment being a notification that the act requested by the applicant, namely, the allotment of shares, has been complied with. If it is true that the allotment actually makes the applicant a shareholder, this reasoning is sound. If, however, the allotment is merely a vote that the applicant shall become a shareholder in the future the notice of allotment is in effect a promise that the applicant shall later become a shareholder. Apparently the latter is the true construction of the transaction. The allotment does not seem of itself to make the applicant a share

758, 84 Am. St. Rep. 335; Howe v. Nickels, 22 Me. 175; Babcock v. Bryant, 12 Pick. 133; Courtis v. Dennis, 7 Met. 510; Clark v. Remington, 11 Met. 361; Paige v. Parker, 8 Gray, 211; Whiting v. Stacey, 15 Gray, 270 (cp. Lascelles v. Clark, 204 Mass. 362, 90 N. E. 875); Montgomery v. Kellogg, 43 Miss. 486; Beebe v. Dudley, 26 N. H. 249; Bay v. Thompson, 1 Pears. 551.

But see contra, Cahuzac v. Samini, 29 Ala. 288; Lowe v. Beckwith, 14 B. Mon. 184, 58 Am. Dec. 659.

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holder, at any rate under the English law; and in 24 the English decisions the contract created is unquestionably treated as a bilateral contract.25

§ 70. Acceptance in bilateral contracts requires communication.

As has been seen the acceptance of a bilateral contract is not only an expression of assent to the proposition but is a giving of the counter promise requested. To complete a contract, the offeror must always be given what he requests as the return for his promise and in an offer for a bilateral contract he requests either a promise in fact or an obligation in law.26 In order to complete a bilateral contract, therefore, on the former supposition the offeree must make a promise to the offeror and a promise is something which from its very nature involves if not communication, at least attempted communication. If an obligation in law is requested, the same thing will generally be true, since contractual obligations in law are imposed as a rule only when promises in fact are made.27 An exceptional case, however, may be supposed

24 Lindley's Law of Companies (5th ed.), 13, 43, 760; Thring's Law of Companies, Chap. 2.

25 In the opinions in the cases cited, supra, no distinction is drawn between allotment cases and ordinary contracts by correspondence. The decision of Household Fire Ins. Co. v. Grant, 4 Exch. D. 216, is universally regarded as the leading authority on the completion of ordinary contracts by correspondence which are of course bilateral contracts. Moreover, in Re London & Northern Bank, Ltd., [1900] 1 Ch. 220, the court held effectual a revocation received between the allotment and the mailing of notice of allotment. This necessarily decides such a contract to be bilateral. The decision is criticised in 13 Harv. L. Rev. 519, but, for the reasons given in the text, seems sound.

26 See infra, § 103.

27 It is sufficient authority for this statement to refer to the cases of contracts by correspondence. Infra, § 75; see also supra, § 24. These decisions on contracts by correspondence, assume or decide that it is necessary at least that a properly addressed acceptance shall be started towards the offeror. The early case of Hallock v. Commercial Ins. Co., 26 N. J. L. (2 Dutch,) 268, did indeed hold that any overt act by the offeree manifesting assent was sufficient whether it came to the offeror's knowledge and apparently whether it was intended to come to the offeror's knowledge or not, but this decision certainly goes too far.

In Emerson v. Stevens Grocer Co., 95 Ark. 421, 130 S. W. 541, 105 Ark. 575, 151 S. W. 1003, one who had offered to buy goods sent the seller a check as part payment of the price. The court held that acceptance of the

where the offeror expresses himself as satisfied with some method of acceptance which would not necessarily involve even an attempt at communication. Where the offeror has thus manifested his satisfaction with a method which the acceptor thereupon adopts, it is probable that the law would impose upon both parties the obligations which they expected. 28

§ 71. Acceptance in unilateral contracts where the offeree is the promisor, requires communication.

Almost invariably when a unilateral contract is formed the offeror is the promisor, and the person who performs the completed act is the offeree. It is possible, however, where the act involved is the transfer of title to personal property, which may take place whenever the parties have agreed that

check upon the terms and in assent to the buyer's proposal would amount to an acceptance of the contract, binding the seller to deliver the goods as requested. Here it is to be observed that the seller's retention or cashing of the check is something which would necessarily come to the buyer's knowledge, through it is by no means certain that the court deemed this circumstance material. It is hard, however, to admit the correctness of the court's ruling that retention of the check would or would not be an acceptance (and therefore in effect a promise) according to the buyer's undisclosed intent when he retained it.

In Mendell v. Willyoung, 42 N. Y. Misc. 210, 85 N. Y. Supp. 647, and in Post v. Frank, 75 N. Y. Misc. 130, 132 N. Y. Supp. 807, the court held that an order for a series of advertisements became a complete bilateral contract after the publication of the advertisement was begun. In the earlier of these cases it appeared that the publication containing the advertisement was sent regularly to the defendant. This would supply the necessary communi

cation. In the second case it did not appear that the publication had been sent to the defendant, but perhaps publication in a paper which may be easily obtained may be, if the parties expressly or compliedly assent thereto, a sufficient means of communication between them.

28 In Household Ins. Co. v. Grant, 4 Ex. Div. 216, Bramwell, L. J., said: "If there is a difference where the acceptance is by a letter sent through the post which does not reach the offeror, it must be by virtue of some general rule or some particular agreement of the parties. As, for instance, there might be an agreement that the acceptance of the proposal may be by sending the article offered by the proposer to be bought, or hanging out a flag or sign to be seen by the offerer as he goes by, or leaving a letter at a certain place, or any other agreed mode; and in the same way there might be an agreement that dropping a letter in a post pillar box or other place of reception should suffice." See also Brogden v. Metropolitan Ry. Co., 2 A. C. 666, 691.

it shall, for the offeror to be the actor and promisee, and for the offeree to be the promisor.29 In this kind of unilateral contract since the offer requests a promise, it is necessary that the acceptance should be communicated or that something which the law regards an equivalent to communication shall be made. The offer is like that of a bilateral contract in respect to the thing which it requests to be given.

The situation supposed at the end of the preceding section (where a method of manifesting a promise is requested which does not involve communication) is more likely to occur in unilateral contracts of the kind under consideration than in a bilateral contract; thus, the offeror may send goods with a letter stating the price and requesting no manifestation of acceptance from the offeree except that he shall take the goods and use them. If he does, there can be no doubt that though his use of the goods involves no attempt at communication with the offeror, a debt arises. It may be objected that though there is a sale and a debt in such a case, there is no promise by the buyer and, therefore, properly speaking no contract; but it seems hard to believe that the law would not impose on the acceptor in such a case any obligation which the offeror requested and which the acceptor must be supposed to have intended to assume; and unless the acceptor can be held liable on a contract if what is requested by the offeror is a liability not enforceable as a debt, the offeror would be withput remedy. Let it be supposed that bills of lading are sent with the statement that the offeree may take them if he is willing to accept bills of exchange to be drawn against them. It can hardly be supposed that a court would not hold the acceptor bound to honor the bills of exchange if he took the bills of lading. So it is generally held, that where a check is sent by one who owes an unliquidated or disputed claim on the condition that the check if accepted shall be full satisfaction, it operates as such if accepted.30 This can only be on the theory that an accord and satisfaction, which is a contractual agreement has taken place.3

29 See supra, § 25.

30 See infra, § 1854.

31 See Emerson v. Stevens Grocer

31

Co., 95 Ark. 421, 130 S. W. 541, 105
Ark. 575, 151 S. W. 1003, stated supra,

n. 27.

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