Opinion ID: 1824577
Heading Depth: 1
Heading Rank: 2

Heading: Was There Substantial Performance?

Text: The true thrust of the plaintiff's appeal is embodied in his contention that it would be unjust to deny him recovery, since the defendant's offer reasonably induced substantial action on the part of the plaintiff and caused him to change his position to his financial detriment. A unilateral contract will be legally enforceable when it has induced substantial performance or when it has brought about a change of position on the part of the offeree. Restatement, 1 Contracts, p. 110, sec. 90. Further, if an offer for a unilateral contract is made, the offeror may be bound if the offeree gives or tenders part of the consideration. Restatement, 1 Contracts, p. 53, sec. 45. The reason for the rule is stated by Corbin in his treatise on contracts: The reason for the rule . . . is, not that part performance or tender is the `equivalent' of full performance, but that honorable men do not repudiate their promises after part performance has been given or tendered. 1 Corbin, Contracts, p. 264, sec. 63. However, from the record it is clear that there was no actual tender of the steel by Mr. Lazarus. The trial court concluded that Mr. Lazarus did not incur any detriment or undertake any substantial action prior to the revocation of the offer. Judge DECKER found incredulous the plaintiff's contention that the payment of $8,600  was meant to be a commission on the expected profit from this transaction. The plaintiff contends that the trial court erred in disbelieving this testimony, since it was uncontroverted in the record. While it is true that the record unequivocally establishes that Mr. Lazarus paid $8,600 to Mr. Harris, it does not follow that the court was obliged to adopt the import of that testimony. Mr. Lazarus and Jackson Steel had a long history of business dealings. Mr. Lazarus even had some difficulty in procuring timely payments from Jackson Steel. The mere fact that the money was paid to an officer of Jackson Steel did not prevent the trier of fact from disbelieving that the payment was an outgrowth of the transaction now before the court. It was within the discretion of the trial judge to find that the testimony of Mr. Lazarus as to the purpose of this payment was incredible in view of the intertwined business dealings between Mr. Lazarus and Mr. Harris. A court is not obliged to adopt even uncontradicted testimony if such testimony is inherently improbable. In Thiel v. Damrau (1954), 268, Wis. 76, 85, 66 N. W. (2d) 747, this court said: Positive uncontradicted testimony as to the existence of some fact, or the happening of some event, cannot be disregarded by a court or jury in the absence of something in the case which discredits the same or renders it against the reasonable probabilities. It is also contended by the plaintiff that his commitment to purchase the steel from Union Steel Corporation constituted a substantial action so as to make his contract with the defendant enforceable. At the oral argument, plaintiff's counsel expressed the opinion that the agreement of Mr. Lazarus to buy steel from Union Steel Corporation was legally enforceable by the latter corporation.  This contention is not affirmatively supported by the record. Mr. Lazarus testified that he would have been stuck with the steel if he had not canceled, but there is no proof that he was able to cancel only because of Union Steel's desire to maintain his good will. The fact is that Union Steel accepted the cancellation without challenge. It is noted that Union Steel, in acknowledging the purchase order from Mr. Lazarus, wrote the following: You will release by 12 noon January 28, 1960, or cancel at no charge. The meaning of this clause was not explored at the trial, but it would seem to suggest that Mr. Lazarus had with-drawal rights. Mr. Lazarus also contends that the defendant prevented him from completing his contract by announcing in advance a refusal to accept delivery on Saturday. In view of the fact that the contract had not been accepted or substantially acted upon by the plaintiff at the time of such prevention, we find that this did not constitute a legal wrong of which the plaintiff may complain. Similarly, the revocation of the offer was made at a time when there had been neither formal acceptance by the plaintiff nor a substantial change of position. Since Mr. Lazarus did not see fit to make a formal acceptance of the offer, he was in effect gambling that American Motors would not revoke its offer by canceling the purchase order before he made delivery. We recognize that upon different facts it would be possible for a seller of steel to have altered his position so as to effectuate the equitable considerations inherent in sec. 90 of the Restatement. Under all the circumstances of this case, however, this court is satisfied that the offer was withdrawn in time so as to avoid any obligation under the offer to the plaintiff. The preparations which Mr. Lazarus made in order to enable him to perform did not give rise to a legal obligation even under the liberal application of the rule of substantial performance.  In view of the fact that we find that there was no enforceable contract, it is unnecessary to consider the issue of damages. By the Court. Judgment affirmed.