Contracts
248 N.Y. 86, 161 N.E. 428 (N.Y. 1928)
Study notes for Petterson v. Pattberg: professor notes, cold call prep, exam angles, and memory aids.
An offeror may revoke a unilateral offer before the offeree completes performance, and a refused tender does not constitute acceptance.
In Petterson v. Pattberg, the court examined the nature of unilateral contracts and the requirements for acceptance through performance. A critical aspect highlighted is the significance of communication regarding the revocation of offers, especially in unilateral contracts where acceptance is contingent upon performance. The court emphasized that an offeror maintains the right to revoke their offer at any time before the completion of the performance, as no binding contract exists until acceptance is achieved either through completion of the act or proper communication of acceptance.
Furthermore, the ruling illustrates the importance of consideration in contract formation. The rejected tender by Petterson, although a part of the negotiation process, did not result in mutual assent or create an obligation on Pattberg’s part to uphold the offer. Thus, this case serves as a significant reference point in understanding the limitations of unilateral offers and the necessity of definitive acceptance to form enforceable contracts.
Pattberg's Performance Prevented Petterson's Promise.
| Case | Distinction |
|---|---|
| Carlill v. Carbolic Smoke Ball Co. | In Carlill, the court found that the unilateral offer was accepted through performance after the offeror's advertisement created a binding commitment, unlike in Petterson where the offer was revoked before acceptance. |
| Hyde v. Wrench | Unlike in Hyde v. Wrench, where a counter-offer was made, Petterson's scenario involved a unilateral offer that did not lead to a binding agreement due to a refusal to perform. |
Allowing offerors to revoke offers prior to acceptance ensures flexibility and protects the offeror from unintended obligations.
This approach may undermine confidence in contractual negotiations and create barriers to fair dealing as parties may invest resources based on offers that can be retracted without consequence.
Students should be prepared to analyze the formation of unilateral contracts and the implications of revocation before acceptance. Exam questions may involve distinguishing between acceptance by performance and mere intent or offer consideration.