1 Cal. 2d 370 (1934).

One-Sentence Takeaway: There is a presumption in favor of bilateral contracts and an offer is presumed to be one for bilateral contract if it is ambiguous as to whether it is unilateral or bilateral.

Summary:  Plaintiff wife’s uncle wrote to Plaintiffs in Canada, asking them to come to California and look after him and his wife.

The letter stated: “So if you can come, [Plaintiff wife] will inherit everything . . . Will you let me hear from you as soon as possible.”

Plaintiffs responded to the letter by confirming that they would come to California to take care of the uncle and aunt.  While Plaintiffs were preparing for the move, the uncle died, and Plaintiffs came and took care of the aunt until her death.

Instead of leaving the property to Plaintiff wife, however, the uncle’s will left the property to Defendants.

Plaintiffs brought lawsuit against Uncle’s estate (Defendants) for, among other things, breach of contract.

Defendants argued that there was no breach because there was no contract.  Specifically, Defendants contended that the uncle’s letter was only an offer to enter into a unilateral contract and that offer was revoked by death before performance.  Defendants further argued that Plaintiffs’ letter of acceptance was ineffective as the uncle’s offer was one for unilateral contract.

The Court disagreed with Defendants and held that there was a contract formed upon Plaintiffs’ letter to the uncle accepting the offer.

The Court first explained the distinction between unilateral and bilateral contracts:

The distinction between unilateral and bilateral contracts is well settled in the law. It is well stated in section 12 of the American Institute’s Restatement of the Law of Contracts as follows: “A unilateral contract is one in which no promisor receives a promise as consideration for his promise. A bilateral contract is one in which there are mutual promises between two parties to the contract; each party being both a promisor and a promisee

The Court rejected Defendants’ argument that the uncle’s offer was for a unilateral contract.  It reasoned that there is a presumption in favor of bilateral contracts, which, taken together with the uncle’s request for a reply and the letter of acceptance, justified the conclusion that a bilateral contract was made, which Plaintiffs could enforce against the uncle’s estate.

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