Welcome to Part II of my “Misinformation from Contract Class” series. Today’s installment revolves around the legal theory of rewards. In essence, a reward is simply a unilateral contract — meaning there is an agreement to pay for a service. Let me give a quick hypo to illustrate what we were told in class:
Doggy in the Window Hypo:Jack is out enjoying a walk in Central Park when he sees a cute Terrier puppy that he recognizes — it looks exactly like a puppy that he has seen in the window of a building on his way to work. Jack picks up the puppy and carries it to the building and knocks on the door. A woman with red eyes and a tissue in her hands opens the door, then exclaims, “PRINCESS!” while grabbing the puppy from Jack’s hands. While the woman plays with her puppy, Jack looks through the door and sees a giant stack of REWARD posters. Apparently, the woman had been advertising a $5000 reward for Princess. Jack asks the woman for the money and she refuses.
My professor indicated that Jack would be entitled to recover. His rationale was that “motive doesn’t matter.” This stuck me as off for two reasons. First, I had learned otherwise in my undergraduate Contracts class. Second, and more importantly, how could Jack have accepted a contract — and further, how could there have been a meeting of the minds — if Jack didn’t even know about the offer? I began my search by checking Williston on Contracts, which had the following to say:
According to the traditional rule, the offeree must know of the existence of the offer, not only before the offeree has completely performed the consideration requested, but before the offeree has performed any part of it…WILLSTN-CN § 4:17
This was actually the rule that I was taught in undergrad, so at this point I thought that Jack may have gotten lucky and my undergrad professor had just told us the traditional / old standard. Willison then referred me to the Second Restatement of Contracts which explains the following:
[W]hen an offer contemplates no commitment, as in cases of offers of reward, it is ordinarily essential to the acceptance of the offer that the offeree know of the proposal made. In general, performance completed before the offer comes to the offeree’s knowledge does not have reference to the offer, and the terms of the offer are not satisfied by such action.REST 2d CONTR § 51
According to the restatement then, Jack is almost certainly unable to recover. I was unsuccessful in finding any Pennsylvania statutes dealing with the subject, and alarmingly unsuccessful in finding any Pennsylvania case law on the subject. If anybody knows of any PA case law on-point, please let me know.
Does it seem fair that Jack isn’t able to recover?
[Addendum: I'm happy to say that I spoke with my professor after class today and he agreed that there is no contract if the performance was complete. I'm not sure how we were misunderstanding each other before, but we seem to be in agreement. Apologies if I misinterpreted anything that he said.]
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{ 2 comments… read them below or add one }
Here’s a great real-life example of your lesson: http://www.lasisblog.com/2011/11/16/“reward-what-reward”-ryan-leslie-sued-for-over-1-million/
What if you were aware of the reward, but your actions (picks up the puppy and returning princess to owner) were not induced by that offer in anyway because you believed Princess’ owner to be indigent. Valid Acceptance?