Court Opinion

ID: 9548085
Source: CourtListenerOpinion
Date Created: 2023-08-07 17:57:17.627626+00
Date Added: 2024-06-11T15:18:27.339246
License: Public Domain

HOWE, Justice
(concurring in the result):
I concur in the result reached by the majority opinion but do so on different grounds.
*693I view the offer made by Transamerica to settle the personal injury claim of Priscilla Blackhurst as an option. Trans-america promised payment of $150,000 if and when it received a legally binding release of her claim. Because Mrs. Black-hurst was incompetent, neither Robert Blackhurst nor Keith Nelson could give any return promise that he could furnish such a release since it did not lie wholly within his power, control, and authority to do so. Thus the transaction should be viewed by principles of unilateral, not bilateral, contract.
After Transamerica made its offer, Nelson set about to perform the requested act, i.e., obtain the release. He prepared and presented to the district court a petition for the appointment of a guardian for Mrs. Blackhurst and for an order approving the proposed settlement. However, because the probate clerk was absent from work that day, the required appointment and approval could not be accomplished. Nonetheless, Nelson had begun the invited performance, with the result that the offer of Transamerica became a binding option contract and could not thereafter be revoked. Restatement (Second) of Contracts § 45 (1981) states:
§ 45. Option Contract Created by Part Performance or Tender
(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
(2) The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.
The foregoing rules were followed and applied in Marvel v. Dannemann, 490 F.Supp. 170 (1980); Motel Services, Inc. v. Central Maine Power Co., Me., 394 A.2d 786 (1978); Coffman Industries, Inc. v. Gorman-Taber Co., Mo.App., 521 S.W.2d 763 (1975); Sylvestre v. State, 298 Minn. 142, 214 N.W.2d 658 (1973); Weather-Gard Industries, Inc. v. Fairfield Savings and Loan Association, 110 Ill.App.2d 13, 248 N.E.2d 794 (1969); Marchiondo v. Scheck, 78 N.M. 440, 432 P.2d 405 (1967). Coffman Industries, Inc. v. Gorman-Taber Co., supra, like the instant case, dealt with the acceptance of an offer of settlement. There, an attorney for the bonding company of a general contractor transmitted an offer to pay a subcontractor’s claim if the latter would resolve a collateral claim made by one of his suppliers. The court held that the beginning of negotiations by the subcontractor to resolve the collateral claim and his forebearing to sue the contractor were sufficient to create an option contract which rendered the offer irrevocable. The court relied upon the principle of law enunciated in 1 A.L. Corbin, Corbin on Contracts § 49 (1963):
Where one party makes a promissory offer in such form that it can be accepted by the rendition of the performance that is requested in exchange, without any express return promise or notice of acceptance in words, the offeror is bound by a contract just as soon as the offeree has rendered a substantial part of that requested performance.
Section 45 of the Restatement of Contracts was also cited by the court in support of its holding.
The death of Mrs. Blackhurst did not terminate the offer or give Transamerica grounds for revoking the offer. Restatement (Second) of Contracts § 48 (1981) states the general rule that an offeree’s power of acceptance is terminated when the offeree or offeror dies but notes that this rule does not affect option contracts unless the death discharges the contractual duty of the offeror because of failure of consideration, frustration, impossibility, or failure of condition. 1 A.L. Corbin, Corbin on Contracts § 54 (1963) is in accord, stating that if an offer was a binding option contract or has become so by the offeree’s action before his death, and if the contract is not one that has become impossible of performance by reason of the death, the offeree’s personal representatives can ac*694cept the offer and consummate a contract. Therefore, the death of Mrs. Blackhurst did not rob her estate of the right to complete the invited performance and did not justify Transamerica’s attempted revocation. Neither Mrs. Blackhurst’s personal involvement nor services were necessary to the performance of the contract.
Transamerica received everything that it had bargained for, viz., a full and complete release of all claims of Mr. and Mrs. Black-hurst for her personal injury. It is true, as contended for by Transamerica, that Nelson contemplated that the settlement would have to be approved by the district court in a guardianship proceeding for Mrs. Blackhurst and that the release would be signed by her legal guardian. That was the proper procedure when she was alive. However, it is clear that what Trans-america was bargaining for was a legally binding release of her personal injury claim, and the exact legal procedure by which that release would be obtained was not a material term of the settlement. The protection afforded to Transamerica by the release which was actually given is not diminished by the fact that it was executed by the personal representative of Mrs. Blackhurst’s estate rather than by her guardian. No claim is advanced by Trans-america that enforcement of the settlement will leave it exposed to further liability for Mrs. Blackhurst’s personal injuries.
Contrary to Transamerica’s contention, there was no mutual mistake of fact which would provide legal grounds for rescission of the option contract. Rex Hess, Trans-america’s agent, Robert Blackhurst, and Nelson knew of the precarious condition of Mrs. Blackhurst and that she could die any time or live for several years.