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Contracts • Contract Formation
K#025
Legal Definition
Start of performance pursuant to a unilateral contract offer makes the offer irrevocable for a reasonable amount of time to complete performance. However, the offer is revocable if the offeree has made only mere preparations (unless there is reliance).
Plain English Explanation
Unilateral contracts are accepted through actual performance. So if a unilateral offer is made, and the other party begins performance, the offeror isn't allowed to revoke the offer without giving the offeree a reasonable amount of time to perform. In other words, if someone has already acted upon a unilateral offer and begun putting in effort, you can't be a jerk and revoke the offer.
However, you can argue on an exam that the efforts aren't actually performance, they are only preparing to perform, which would allow you to revoke the offer.
However, you can argue on an exam that the efforts aren't actually performance, they are only preparing to perform, which would allow you to revoke the offer.
Hypothetical
Hypo 1: Bob hears an ice cream truck drive by and he really wants ice cream, but he is super lazy. He tells Sam, "If you bring me back an ice cream, I'll pay you $20." Sam says, "Deal!" Sam puts on his shoes, runs out of the door, and, as he is running down the street after the ice cream truck, Bob yells, "Never mind, I don't want one!" Result: Bob cannot revoke the offer, because Sam has demonstrated partial performance by running after the ice cream truck to bring back an ice cream for Bob. It would be a jerk move to ignore Sam's efforts just because he hasn't yet fully completed performance.
Hypo 2: Same facts as Hypo 1, except Bob never yells "Never mind, I don't want one!" In this case, Sam continues to run after the ice cream truck, but disappears over the horizon. 2 hours after Bob hasn't seen Sam, Bob texts him, "Never mind, I don't want an ice cream." 5 hours later, Sam shows up with an ice cream, and is super sweaty. Result: Sam took an unreasonable amount of time to perform a task that was implicitly required immediately (seeing a truck, and wanting something from the truck now), so the revocation would be valid.
Hypo 3: Same facts as Hypo 1, except just as Sam is tying his shoes and getting ready to run after the ice cream truck, Bob says, "Never mind, I don't want an ice cream." Result: Sam tying his shoes is merely preparation to perform the task, so Bob is free to revoke the offer.
Hypo 2: Same facts as Hypo 1, except Bob never yells "Never mind, I don't want one!" In this case, Sam continues to run after the ice cream truck, but disappears over the horizon. 2 hours after Bob hasn't seen Sam, Bob texts him, "Never mind, I don't want an ice cream." 5 hours later, Sam shows up with an ice cream, and is super sweaty. Result: Sam took an unreasonable amount of time to perform a task that was implicitly required immediately (seeing a truck, and wanting something from the truck now), so the revocation would be valid.
Hypo 3: Same facts as Hypo 1, except just as Sam is tying his shoes and getting ready to run after the ice cream truck, Bob says, "Never mind, I don't want an ice cream." Result: Sam tying his shoes is merely preparation to perform the task, so Bob is free to revoke the offer.
Visual Aids
Related Concepts
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How can an offeree reject an offer?
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What is the effect of an offeree beginning to perform in response to an offer?
What is the effect of a seller sending non-conforming goods?
What is the effect of including additional or different terms to an offer?
What is the effect of the death of a party prior to acceptance of an offer?
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