Unilateral Contracts

The unilateral contract is of particular interest for two reasons : it raises a problem about the point in time in which there is acceptance and in determining how and when an offer can be revoked. - Justin Santiago

Unilateral contracts arise when the promisor makes an offer to the whole world. An offer is distinguished from a mere invitation to treat by a clear intention to be bound by an acceptance of the terms without further negotiations : Carlill v Carbolic Smoke Ball where precise details as to how to qualify for the reward were expressly stated.

The offeror is said to have waived the necessity for communication of acceptance. It is not necessary that each of the parties to expressly communicate their acceptance. Acceptance can be made by fully performing the act and would be deemed to be valid if all the precise details were followed which in the case of Carlill required the offeree to take the smokeball according to instructions to stop the flu. However there can be no acceptance of the offer without the knowledge of the offer. An ‘offeree’ cannot accept an offer that he is unaware of and there is no acceptance in ignorance of the offer : Gibbons v Proctor

In determining when an offer could be withdrawn, the general rule in contract law as expounded by Goff LJ in Daulia Ltd v Four Millbank Nominees Ltd, “there must be an implied obligation on the part of the offeror not to prevent the condition being satisfied which obligation arises as soon as the offeree starts to perform.” The performer would be deemed to embark on a journey of performance if he has taken steps to fulfill the conditions of the contract by spending time and money : Errington v Errington. However if the performance has yet to be compeleted the law will allow the promisor to to revoke the offer at any time before completion of the performance : Luxor (Eastbourne) vCooper. This is similiar to the law in bilateral contracts where the offeroror is free to revoke the offer anytime before acceptance : Routledge v Grant.

However the difficulty here lies in the fact that since the whole world has been informed of the offer, has the whole world been informed of the revocation of the offer? There are \no English cases on this issue but we can turn to the American case of Shuey v USA where it was said that the offeror can revoke the offer using the same method to reach the same audience. This law although not binding would be persuasive and its logic is that the same people who knew about the offer must know about the revocation lest they embark too far on their journey in performing the act that would constitute acceptance.