Facts: There was a contract between Industrial America’s agent and Bush Hog,
Inc. for the agent to find a merger partner for Bush Hog. At some point, the agent
discovered an ad placed by Fulton Industries stating that Fulton was looking to
acquire a firm that matched Bush Hog’s description, and the bottom of the ad said,
“Brokers full protected.” The Industrial broker called up Fulton’s president and
said I think I have a firm for you, just like the company you mentioned in your
ad. After several discussions, the broker told Fulton the name of the company—Bush
Hog. Then, Fulton and Hogbush tried to merge without Industrial’s involvement.
Fulton said Industrial was already under a contract to find a company for Bush
Hog, and Industrial’s actions with Fulton were encompassed in the activities for
Bush Hog, so therefore, there wasn’t a new contract between Industrial and Fulton.
Essentially, Fulton argued that there wasn’t a contract between Industrial and
Fulton. because Industrial already had a contractual agreement to find a company
Issue: Does Industrial have the burden of proving the agent’s subjective intent
to accept Fulton’s offer of guaranty in the advertisement? - No.
Holding: The supreme court held that plaintiff was also entitled to judgment
against defendant holding company because the trial court erred in submitting the
issue of subjective reliance to the jury.
RULE:
· Objective intent is all that is required for the formation of a contract
· You can have mixed motivations for the act that constitutes acceptance
· You have to have actual knowledge of the offer. If you didn’t have actual
knowledge of the offer there is no way that the court will say you accepted the
offer
Notes
Unilateral contract:
· No notice required unless specifically asked for
· Acceptance by performance
· Knowledge of the offer
· Subjective intent doesn’t matter
Option contract (like mini contract) -under common law, it is a contract. There is
a consideration given in order to keep an option open. Offer cannot be revoked.
Offer is to stay open for a particular amount of time. Offeree not bound to
accept.
UCC - Firm Offers 2-205