Q1: What area of law does Cook v. Coldwell Banker/Frank Laiben Realty Co. primarily address?
Contracts
Q2: What was the central legal issue in Cook v. Coldwell Banker/Frank Laiben Realty Co.?
Whether an employer that offers a year-end bonus as an inducement for sales performance may later impose a continued-employment-at-payout condition and deny payment to a salesperson who met the performance criteria but left the company before the scheduled payout date.
Q3: What rule did the court apply?
A promise of a bonus in exchange for specified performance creates an offer for a unilateral contract that is accepted by performance. Under Restatement (Second) of Contracts § 45, once the offeree begins the invited performance, an option contract is created that makes the offer irrevocable for a reasonable time to complete performance; upon completion of the required performance, the offeror is bound. The offeror cannot unilaterally add material conditions after the offeree has begun (or completed) performance absent the offeree's assent and separate consideration. An employer may not withhold earned compensation by retroactively imposing a continued-employment condition that was not part of the original offer.
Q4: What was the court's holding?
The bonus program formed a unilateral contract that Cook accepted by performance. The later attempt to condition payment on Cook's continued affiliation with Coldwell Banker at the time of the awards banquet was ineffective. Cook earned the bonus by satisfying the program's stated performance requirements, and Coldwell Banker was obligated to pay.
Q5: Why is Cook v. Coldwell Banker/Frank Laiben Realty Co. significant?
Cook solidifies the modern approach to unilateral contracts in the employment/independent-contractor context: bonus and commission plans are enforceable when they contain definite terms and invite performance, and employers cannot retroactively add forfeiture conditions after performance has begun or been completed. The case also underscores that at-will employment does not permit employers to withhold compensation that has already been earned under an existing offer. For students, Cook is a blueprint for analyzing incentive-plan disputes—identify the offer, the invited mode of acceptance, the point at which performance began, and whether any alleged modification is supported by consideration and assent.