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Contracts Case Brief # 8

Title and Citation: Cook v. Coldwell Banker/Frank Laiben Realty Co.,


967 S.W.2d 654 (1998)
Identities of Parties: P (Mary Ellen Cook) real estate agent worked
for D (Coldwell Banker/Frank Laiben Realty Co.) through a verbal
agreement as a real estate salesperson.
Procedural History: P sued D for breach of contract, seeking
$18,404.31 in damages. Trial jury awarded P $24,748.89 in damages,
the D appealed the decision to the Missouri Court of Appeals.
Facts: P worked for the D as a real estate agent/salesperson. In March
1991, D announced a new 3 level bonus program that provided a
bonus based on commissions earned for that year. Agents earning
15,000 25,000 in commissions earn a 500 bonus and a 21% percent
bonus; commissions above 25,000 earn a 30% bonus. In September
1991, P received the first portion of her bonus, and D announced that
the bonuses would be paid in March 1992, and in order to receive the
bonus the agent would have to remain with the company until then. P
had already surpassed 32,000 in commission by the time the
announcement was made, and by the end of the year was entitled to a
bonus of 17,000. January 1992, P accepted a position with another
company, and D informed her she would not receive her bonus. P filed
suit for breach of contract, and trial court entered judgment in her
favor. D filed for directed verdict arguing that P 1) had not established
consideration for the offer of a bonus and 2) had not accepted the
offer. The motion for directed verdict was denied, so D appealed the
decision.
Coldwell Banker (Frank) ---- made promise of bonus to ---- Cook
o Unilateral contract, she has to sell (doesnt want a
promise) has to commit the action (to sell) in order to
receive the promise by the OR
Issue(s): Was the unilateral contract between the D and P enforceable
even though the P left the company, and one of the conditions of the
contract was that she stay with the company until March?
Was D revocation valid even though P did 2/3 of the work?
Holding and Rule: Yes, a unilateral is enforceable when a promise
has engaged in substantial performance under the contract. Since, the
P made substantial performance before the D attempted to revoke the
offer.

No since she had completed substantial performance of the


promise

Courts Reasoning: A unilateral contract exists when a party makes a


promise and the other party performs under that promise. Until the
other party has performed, the promisors promise is merely an offer to
enter into a unilateral contract and, therefore, unenforceable due to
lack of consideration. The promisees performance provides
consideration and shows that the promisee has accepted the offer. The
unilateral contract is enforceable to the extent that it has been
performed. Typically, an offer may be revoked at any time prior to
performance. However, with a unilateral contract, the offer may not be
revoked if the offeree has rendered substantial performance. In the
current matter, Coldwell Bankers promise to pay a bonus operated as
an offer to enter into a unilateral contract. Cook worked for Coldwell
Banker through 1991 with the intent to accept the offer. The evidence
shows that, as of September 1991, when Coldwell Banker attempted to
modify the offer, Cook had earned over $30,000 in commissions, which
is sufficient to entitle her to all three-bonus levels. Cooks performance
is sufficient to establish substantial performance under the contract
prior to Coldwell Bankers attempt to modify the offer.
Judgment and Order: Affirmed