Chapter 3. Formation Of Contracts—Mutual Assent (17-70)

Question 1

A owes B $50. In exchange for A’s payment of the debt B makes a promise. Is there consideration?

Answer 1

Under the rule stated in §73, B’s promise is without consideration. Restatement 2d of Contracts § 17(d)

Question 2

A offers to sell B goods shipped from Bombay ex steamer “Peerless”. B accepts. There are two steamers of the name “Peerless”, sailing from Bombay at materially different times. Is there a contract?

Answer 2

If both parties intend the same Peerless, there is a contract, and it is immaterial whether they know or have reason to know that two ships are named Peerless. Restatement 2d of Contracts § 20(d)

Question 3

A offers to sell B goods shipped from Bombay ex steamer “Peerless”. B accepts. There are two steamers of the name “Peerless”, sailing from Bombay at materially different times. A means Peerless No. 1 and B means Peerless No. 2. Is there a contract?

Answer 3

If neither A nor B knows or has reason to know that they mean different ships, or if they both know or if they both have reason to know, there is no contract. Restatement 2d of Contracts § 20(d)

Question 4

A offers to sell B goods shipped from Bombay ex steamer “Peerless”. B accepts. There are two steamers of the name “Peerless”, sailing from Bombay at materially different times. A knows that B means Peerless No. 2 and B does not know that there are two ships named Peerless. Is there a contract?

Answer 4

There is a contract for the sale of the goods from Peerless No. 2, and it is immaterial whether B has reason to know that A means Peerless No. 1. If A makes the contract with the undisclosed intention of not performing it, it is voidable by B for misrepresentation (see §§ 159-64). Conversely, if B knows that A means Peerless No. 1 and A does not know that there are two ships named Peerless, there is a contract for the sale of the goods from Peerless No. 1, and it is immaterial whether A has reason to know that B means Peerless No. 2, but the contract may be voidable by A for misrepresentation. Restatement 2d of Contracts § 20(d)

Question 5

A offers to sell B goods shipped from Bombay ex steamer “Peerless”. B accepts. There are two steamers of the name “Peerless”, sailing from Bombay at materially different times. Neither party knows that there are two ships Peerless. A has reason to know that B means Peerless No. 2 and B has no reason to know that A means Peerless No. 1. Is there a contract?

Answer 5

There is a contract for the sale of goods from Peerless No. 2. In the converse case, where B has reason to know and A does not, there is a contract for sale from Peerless No. 1. In either case the question whether the contract is voidable for mistake is governed by the rules stated in §§ 151-58. 5. A says to B, “I offer to sell you my horse for $100.” B, knowing that A intends to offer to sell his cow for that price, not his horse, and that the word “horse” is a slip of the tongue, replies, “I accept.” The price is a fair one for either the horse or the cow. There is a contract for the sale of the cow and not of the horse. If B makes the contract with the undisclosed intention of not performing it, it is voidable by A for misrepresentation. See §§ 159-64. Restatement 2d of Contracts § 20(d)

Question 6

A advertises in a large New York newspaper that he will pay a specified reward to anyone who will give him certain information within one year. B sees a copy of this advertisement in a Tokyo newspaper, correctly translated into Japanese, and sends A the information within the year. Is there a contract?

Answer 6

There is a contract. Restatement 2d of Contracts § 23(a)

Question 7

A advertises that he will give a specified reward for certain information, or writes B a similar proposal. B gives the information in ignorance of the advertisement, or without having received the letter. Is there a contract?

Answer 7

There is no contract enforceable as a bargain. Restatement 2d of Contracts § 23(c)

Question 8

A city ordinance provides that a standing reward of $1000 will be paid for information leading to the arrest and conviction of anyone guilty of arson within the city limits. A furnishes such information. Is there a contract?

Answer 8

A is entitled to the reward whether or not he knew of the reward or was motivated by hope of reward. Restatement 2d of Contracts § 23(c)

Question 9

Cross offers. Cases have occurred in which identical offers have crossed in the mails. Such an A sends B an offer through the mail to sell A’s horse for $500. While this offer is in the mail, B, in ignorance thereof, mails to A an offer to pay $500 for the horse. Is there a contract?

Answer 9

There is no contract. Restatement 2d of Contracts § 23(d)

Question 10

After negotiations through a broker, A writes B a letter purporting to confirm a contract for the sale of cloth. A’s letter crosses in the mail a similar letter from B, which differs as to quantity and time of payment. A replies insisting on the quantity stated in his first letter but otherwise agreeing. B replies insisting on the time of payment stated in his first letter but otherwise agreeing. The two replies cross in the mail. Is there a contract?

Answer 10

There is a contract. Restatement 2d of Contracts § 23(d)

Question 11

A offers by letter to sell goods to B, stating no definite time limit for acceptance . B accepts by letter after what might or might not be more than a reasonable time. The acceptance crosses a letter from A stating that he has not heard from B and that A’s offer will terminate if B does not reply by return mail. Is there a contract?

Answer 11

There is a contract. Restatement 2d of Contracts § 23(d)

Question 12

A sends to B an offer to sell a specified lot for $5,000, also stating terms as to time of payment, mortgage security, taxes and insurance. B is so anxious to buy the lot that, without reading any of these additional terms, he sends to A an unconditional acceptance. Is there a contract?

Answer 12

There is a contract on the terms stated in A’s offer. Restatement 2d of Contracts § 23(e)

Question 13

A says to B, “That book you are holding is yours if you promise to pay me $5 for it.” Is there an offer?

Answer 13

This is an offer empowering B, by making the requested promise, to make himself owner of the book and thus complete A’s performance. In that event there is also an implied warranty of title made by A. See Uniform Commercial Code §§ 2-312, 2-401. Restatement 2d of Contracts § 24(a)

Question 14

A promises B $100 if B goes to college. Is there an offer?

Answer 14

If the circumstances give B reason to know that A is not undertaking to pay B to go to college but is promising a gratuity, there is no offer. Restatement 2d of Contracts § 24(a)

Question 15

A, who is about to leave on a month’s vacation, tells B that A will pay B $50 if B will paint A’s porch while A is away. B says he may not have time, and A says B may decide after A leaves. How could acceptance be manifested?

Answer 15

If B begins the painting, there is an acceptance by performance which operates as a promise to complete the job. See §§ 32, 62. Restatement 2d of Contracts § 50(b)

Question 16

A, who is about to leave on a month’s vacation, tells B that A will pay B $50 if B will paint A’s porch while A is away. B says he may not have time, and B also expresses doubt whether he will be able to finish the job, and it is agreed that B may quit at any time but will be paid only if he finishes the job during A’s vacation. How could acceptance be manifested?

Answer 16

If B begins the painting, there is an acceptance by performance creating an option contract. See § 45. Restatement 2d of Contracts § 50(b)

Question 17

A sends to B plans for a summer cottage to be built on A’s land in a remote wilderness area, and writes, “If you will undertake to build a cottage in accordance with the enclosed plans, I will pay you $5,000.” How could acceptance be manifested?

Answer 17

B cannot accept by beginning or completing performance, since A’s letter calls for acceptance by promise. See § 58. Restatement 2d of Contracts § 50(c)

Question 18

A mails a written order to B, offering to buy on specified terms a machine of a type which B regularly sells from stock. The order provides, “Ship at once.” B immediately mails a letter of acceptance. Is there acceptance?

Answer 18

This is an acceptance by promise, even though––under § 32––B might have accepted by performance. Restatement 2d of Contracts § 50(c)

Question 19

A gives an order to B Company’s traveling salesman which provides, “This proposal becomes a contract without further notification when approval by an executive officer of B Company is noted hereon at its home office.” Is there acceptance?

Answer 19

The notation of approval is an acceptance by promise. See §§ 56, 69 as to the requirement of notification. Restatement 2d of Contracts § 50(c)

Question 20

A mails a written order to B for goods to be manufactured specially for A, and requests B to begin at once since manufacture will take several weeks. How should acceptance be manifested?

Answer 20

Under § 62 acceptance is complete when B begins, but A’s contractual duty is discharged and he may treat the offer as having lapsed before acceptance unless within a reasonable time B sends notification of acceptance or unless the offer or a prior course of dealing indicates that notification is not required. Restatement 2d of Contracts § 54(b)

Question 21

A, the proprietor of a medical preparation, offers $100 to anyone who contracts a certain disease after using the preparation as directed. B uses it as directed. Is there acceptance?

Answer 21

B has accepted the offer, and is entitled to the $100 if she later contracts the disease. No notification to A is required until after B has contracted the disease. Restatement 2d of Contracts § 54(c)

Question 22

A, a newspaper , requests B to discontinue distribution of a rival newspaper, and offers to pay B $10 per week as long as B abstains from such distribution. B discontinues the distribution. Is there acceptance?

Answer 22

B has accepted the offer, and no notification to A is required. Restatement 2d of Contracts § 54(c)

Question 23

A, the president of a corporation, agrees to guarantee payment for goods to be sold to the corporation by B. B sells and delivers the goods. Is there acceptance?

Answer 23

B has accepted A’s offer, and no notification of acceptance is necessary. Restatement 2d of Contracts § 54(d)

Question 24

A writes an informal letter to B, a friend in another country, saying, “If you will let my brother C have $100, I will guarantee its repayment.” Promptly on receiving the letter, B advances the money to C, but B takes no steps to notify A, and A does not learn of the advance for a year. Is this enforceable?

Answer 24

B cannot enforce the guaranty if C fails to pay the debt. Restatement 2d of Contracts § 54(d)

Question 25

A writes an informal letter to B, a friend in another country, saying, “If you will let my brother C have $100, I will guarantee its repayment.” Promptly on receiving the letter, B advances the money to C. Then, B receives a letter of revocation from A an hour after advancing the money. B promptly mails a letter notifying A of the advance. Is this enforceable?

Answer 25

The guaranty is binding even though the letter never arrives. Restatement 2d of Contracts § 54(d)

Question 26

A, a merchant, mails B, a carpenter in the same city, an offer to employ B to fit up A’s office in accordance with A’s specifications and B’s estimate previously submitted, the work to be completed in two weeks. The offer says, “You may begin at once,” and B immediately buys lumber and begins to work on it in his own shop. The next day, before B has sent a notice of acceptance or begun work at A’s office or rendered the lumber unfit for other jobs, A revokes the offer. Is this an enforceable revocation?

Answer 26

The revocation is timely, since B has not begun to perform. Restatement 2d of Contracts § 62(d)

Question 27

A, a regular customer of B, orders fragile goods from B which B carries in stock and ships in his own trucks. Following his usual practice, B selects the goods ordered, tags them as A’s, crates them and loads them on a truck at substantial expense. Is this an enforceable revocation?

Answer 27

Performance has begun, and A’s offer is irrevocable. See Uniform Commercial Code § 2-206 and Comment 2. Restatement 2d of Contracts § 62(d)

Question 28

A makes B an offer , inviting acceptance by telegram, and B duly telegraphs an acceptance. A purports to revoke the offer in person or by telephone or telegraph, but the attempted revocation is received by B after the telegram of acceptance is dispatched. Is this an enforceable revocation?

Answer 28

There is no effective revocation. Restatement 2d of Contracts § 63(a)

Question 29

A offers to buy cotton from B, the operator of a cotton gin, B to accept by specifying the number of bales in a telegram sent before 8 p.m. the same day. B duly sends a telegram of acceptance and ships the cotton, but the telegram is not delivered. Is there a contract?

Answer 29

There is a contract, and A is bound to take and pay for the cotton. Restatement 2d of Contracts § 63(b)

Question 30

A mails to B an offer to lease land, stating, “Telegraph me Yes or No. If I do not hear from you by noon on Friday, I shall conclude No.” B duly telegraphs “Yes,” but the telegram is not delivered until after noon on Friday. Is there a contract?

Answer 30

Any contract formed by the telegraphic acceptance is discharged. Restatement 2d of Contracts § 63(b)

Question 31

A offers to buy cattle for B, on an understanding that if B telegraphs “ Yes” A will notify B of the amount of money needed and B will supply it. B’s “Yes” telegram is duly dispatched but does not arrive within a reasonable time. Is there a contract?

Answer 31

Any contract formed by the dispatch of the telegram is discharged. Restatement 2d of Contracts § 63(b)

Question 32

A mails to B a note payable by C with instructions to collect the amount of the note and remit by mailing B’s own check. At C’s request B mails his own check as instructed. Subsequently, at C’s request, B recovers his letter and check from the post office. Is there a contract?

Answer 32

The recovery does not discharge the contract formed by the mailing of B’s check. But if B is a bank, its remittance may be provisional under Uniform Commercial Code § 4-211. Restatement 2d of Contracts § 63(c)

Question 33

A mails to B a note payable by C with instructions to collect the amount of the note and remit by mailing B’s own check. B recovers his letter and check from the post office because he has learned that C is insolvent and cannot reimburse B. Is there a contract?

Answer 33

B is entitled to rescind the contract for mistake. See §§ 153-54. compare Uniform Commercial Code § 4-212. Restatement 2d of Contracts § 63(c)

Question 34

A mails an offer to B to appoint B A’s exclusive distributor in a specified area. B duly mails an acceptance. Thereafter B mails a letter which is received by A before the acceptance is received and which rejects the offer and makes a counter-offer. On receiving the rejection and before receiving the acceptance, A executes a contract appointing C as exclusive distributor instead of B. Is there a contract?

Answer 34

B is estopped to enforce the contract. Compare § 40. Restatement 2d of Contracts § 63(c)

Question 35

The Government mails to A an offer to pay the amount quoted by him for the manufacture of two sets of ship propellers, and A mails an acceptance. A then discovers that by mistake he has quoted the price for a single set, and so informs the Government by a telegram which arrives before the acceptance. Is there a contract?

Answer 35

A’s mailing the acceptance created a contract. The question whether the contract is voidable for mistake is governed by the rules stated in §§ 153-54. Restatement 2d of Contracts § 63(d)

Question 36

A mails to B an offer to buy goods, and B mails an acceptance. The application of a new tax statute depends on when title to the goods passes to A, and under Uniform Commercial Code § 2-401(3)(b) title passes at the time of contracting. At what point was the time of contracting between A and B?

Answer 36

The time of contracting is the time when B’s acceptance is mailed. Restatement 2d of Contracts § 63(d)

Question 37

A offers to insure B’s house against fire, the insurance to take effect upon actual payment of the premium, and invites B to reply by mailing his check for a specified amount. B duly mails the check. While B’s letter is in transit, the house burns. Is there a contract?

Answer 37

The loss is within the period of insurance coverage. Restatement 2d of Contracts § 63(e)

Question 38

A makes B an offer by mail, or messenger, and B promptly sends an acceptance by his own employee. Is there a contract?

Answer 38

There is no contract until the acceptance is received by the offeror. As to receipt, see § 68. Restatement 2d of Contracts § 63(e)

Question 39

A, for consideration, gives B an option to buy property, written notice to be given on or before a specified date. Can B exercise the option if he doesn’t receive the notice until after the specified date?

Answer 39

Notice dispatched before but not received until after that date is not effective to exercise the option. Restatement 2d of Contracts § 63(f)

Question 40

A submits a bid to supply goods to the Government, which becomes irrevocable when bids are opened. Within a reasonable time the Government mails a notice of award of the contract to A. Is there a contract?

Answer 40

Until A receives the notice, there is no contract binding on the Government. Restatement 2d of Contracts § 63(f)

Question 41

A gives several lessons on the violin to B’s child, intending to give the child a course of twenty lessons, and to charge B the price. B never requested A to give this instruction but silently allows the lessons to be continued to their end, having reason to know A’s intention. Is this enforceable?

Answer 41

B is bound to pay the price of the course. Restatement 2d of Contracts § 69(b)

Question 42

A offers by mail to sell to B a horse already in B’s possession for $250, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.” B makes no reply, but he does not intend to accept. Is there a contract?

Answer 42

There is no contract. Restatement 2d of Contracts § 69(c)

Question 43

A offers by mail to sell to B a horse already in B’s possession for $250, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.” B replies by return mail, saying: “I accept your offer.” Is there a contract?

Answer 43

There is a contract. Restatement 2d of Contracts § 69(c)

Question 44

A offers by mail to sell to B a horse already in B’s possession for $250, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.” B makes no reply and remains inactive with the intention of thereby expressing his acceptance. Is there a contract?

Answer 44

There is a contract. Restatement 2d of Contracts § 69(c)

Question 45

A, through salesmen , has frequently solicited orders for goods from B, the orders to be subject to A’s personal approval. In every case A has shipped the goods ordered within a week and without other notification to B than billing the goods to him on shipment. A’s salesman solicits and receives another order from B. A receives the order and remains silent. B relies on the order and forbears to buy elsewhere for a week. Is this enforceable?

Answer 45

A is bound to fill the order. Restatement 2d of Contracts § 69(d)

Question 46

A has for years insured B’s property against fire under annual policies. At the expiration of one policy, in accordance with the usual practice, A sends B a renewal policy and a bill for the premium. B retains the policy for two months and then refuses to pay the premium on demand. Does B have a duty?

Answer 46

B is liable for the premium accrued prior to his rejection. Restatement 2d of Contracts § 69(d)

Question 47

A sends B a one-volume edition of Shakespeare with a letter, saying, “If you wish to buy this book send me $6.50 within one week after receipt hereof, otherwise notify me and I will forward postage for return.” B examines the book and without replying makes a gift of it to his wife. Does B have a duty?

Answer 47

B owes A $6.50. Restatement 2d of Contracts § 69(e)

Question 48

A sends B a one-volume edition of Shakespeare with a letter, saying, “If you wish to buy this book send me $6.50 within one week after receipt hereof, otherwise notify me and I will forward postage for return.” B examines the book and without replying carefully lays it on a shelf to await A’s messenger. Is there a contract?

Answer 48

There is no contract. Restatement 2d of Contracts § 69(e)

Question 49

A sends B a one-volume edition of Shakespeare with a letter, saying, “If you wish to buy this book send me $6.50 within one week after receipt hereof, otherwise notify me and I will forward postage for return.” B examines the book and uses it or gives it to his wife, writing A at the same time that he has taken the book, but that it is worth only $5 and that he will pay no more. What can A do?

Answer 49

A may at his option treat B as a tortfeasor or as contracting to pay $6.50. Restatement 2d of Contracts § 69(e)

Question 50

Under a claim of right made in error but in good faith, A digs a well on B’s unused land and takes water therefrom which has no market value and no value to B, doing no injury to the value of the land. B notifies A that he will charge A $50 a day for every day on which A takes water from his land. Is this enforceable?

Answer 50

Even after it is adjudicated that A’s right is nonexistent, A does not accept B’s terms by taking water. Restatement 2d of Contracts § 69(e)

Question 51

A sends B a misdirected offer which is delayed in delivery, as is apparent from the date of the letter or the postmark on the envelope, so that the offeree does not receive the offer until some time later than he would have received it had the direction been correct. Can the offeree accept?

Answer 51

The offeree cannot accept the offer unless he can do so within the time which would have been permissible had the offer arrived seasonably. Restatement 2d of Contracts § 49

Question 52

A offers to buy from B at the market price 100 tons of steel per month for the next 12 months, promising that in consideration of the delivery of the first installment B is to have an option to sell any or all of the other eleven installments. B delivers the first 100 tons as requested. Is there still an offer by A?

Answer 52

There is an irrevocable offer to buy the eleven undelivered installments. Restatement 2d of Contracts § 47(c)

Question 53

A offers B to sell him five tons of steel daily, and tenders five tons at once. B accepts the tender. The same amount is furnished daily for a number of days. A then states to B that he revokes the offer. Is there a contract?

Answer 53

A contract is formed each day that steel is furnished, but the revocation prevents the formation of any contracts thereafter. Restatement 2d of Contracts § 47(a)

Question 54

A offers to guarantee the payment of all bills of exchange drawn by B and discounted by C. C discounts one such bill. A is bound to pay it. A then notifies C that the guaranty is withdrawn. Does A still have a duty?

Answer 54

A is not bound to pay bills subsequently discounted. Restatement 2d of Contracts § 47(a)

Question 55

The United States Government publishes an offer of reward for the arrest of a named fugitive. Seven months later the President publishes a proclamation revoking the offer, which is given the same publicity as the offer. Five months after the proclamation, A, who has been in Italy continuously and who learned indirectly of the offer but not of the revocation, arrests the fugitive in Italy. Is there a contract?

Answer 55

There is no contract. Restatement 2d of Contracts § 46(b)

Question 56

A , a newspaper, publishes an offer of prizes to the persons who procure the largest number of subscriptions as evidenced by cash or checks received by a specified time. B completes and mails an entry blank giving his name and address, which is received by A. Thereafter, during the contest, A publishes a notice that personal checks will not be counted. B does not see the notice. Does B have a duty?

Answer 56

Unless the original offer provided otherwise, B is not bound by the later notice, since A could have given B personal notice. Restatement 2d of Contracts § 46(b)

Question 57

A makes a written promise to pay $5000 to B, a hospital, “to aid B in its humanitarian work.” Relying upon this and other like promises, B proceeds in its humanitarian work, expending large sums of money and incurring large liabilities. Is there a contract?

Answer 57

Performance by B has begun, and A’s offer is irrevocable. Restatement 2d of Contracts § 45(f)

Question 58

In January A, an employer, publishes a notice to his employees, promising a stated Christmas bonus to any employee who is continuously in A’s employ from January to Christmas. B, an employee hired by the week, reads the notice and continues at work beyond the expiration of the current week. Is there a contract?

Answer 58

A is bound by an option contract, and if B is continuously in A’s employ until Christmas a notice of revocation of the bonus is ineffective. Restatement 2d of Contracts § 45(d)

Question 59

A offers to sell a piece of land to B, and promises that if B incurs expense in employing experts to appraise the property the offer will be irrevocable for 30 days. B hires experts and pays for their transportation to the land. Is there a contract?

Answer 59

A is bound by an option contract. Restatement 2d of Contracts § 45(d)

Question 60

A, a magazine, offers prizes in a subscription contest. At a time when B has submitted the largest number of subscriptions, A cancels the contest. A has broken its contract with B. 6. A writes to her daughter B, living in another state, an offer to leave A’s farm to B if B gives up her home and cares for A during A’s life, B remaining free to terminate the arrangement at any time. B gives up her home, moves to A’s farm, and begins caring for A. Is there a contract?

Answer 60

A is bound by an option contract. Restatement 2d of Contracts § 45(d)

Question 61

A offers a reward for the return of lost property. In response to the offer, B searches for the property and finds it. A then notifies B that the offer is revoked. B makes a tender of the property to A conditional on payment of the reward, and A refuses. Has a contract been breached?

Answer 61

There is a breach of contract by A. Restatement 2d of Contracts § 45(d)

Question 62

A promises B to sell him a specified chattel for $5, stating that B is not to be bound until he pays the money. B tenders $5 within a reasonable time, but A refuses to accept the tender. Has a contract been breached?

Answer 62

There is a breach of contract. Restatement 2d of Contracts § 45(c)

Question 63

A, an insurance company, issues a bulletin to its agents, entitled “Extra Earnings Agreement,” providing for annual bonus payments to the agents varying according to “monthly premiums in force” and “lapse ratio,” but reserving the right to change or discontinue the bonus, individually or collectively, with or without notice, at any time before payment. Is there an offer or promise?

Answer 63

There is no offer or promise. Rst. 45(b)

Question 64

B owes A $5000 payable in installments over a five-year period. A proposes that B discharge the debt by paying $4,500 cash within one month, but reserves the right to refuse any such payment. Is there an offer?

Answer 64

A has not made an offer. A tender by B in accordance with the proposal is an offer by B. Restatement 2d of Contracts § 45(b)

Question 65

A offers B to sell him a parcel of land for $5,000, stating that the offer will remain open for thirty days. B replies, “I am keeping your offer under advisement, but if you wish to close the matter at once I will give you $4,800.” A does not reply, and within the thirty-day period B accepts the original offer. Is there a contract?

Answer 65

B’s acceptance is effective. Restatement 2d of Contracts § 39(c)

Question 66

A offers B to sell him a parcel of land for $5,000, stating that the offer will remain open for thirty days. B replies, “Won’t you take less?” A answers, “No.” Is there still an offer?

Answer 66

An acceptance thereafter by B within the thirty-day period is effective. B’s inquiry was not a counter-offer, and A’s original offer stands. Restatement 2d of Contracts § 39(b)

Question 67

A offers B to sell him a parcel of land for $5,000, stating that the offer will remain open for thirty days. B replies, “I will pay $4,800 for the parcel,” and on A’s declining that, B writes, within the thirty day period, “I accept your offer to sell for $5,000.” Is there a contract?

Answer 67

There is no contract unless A’s offer was itself a contract (see § 37), or unless A’s reply to the counter-offer manifested an intention to renew his original offer. Restatement 2d of Contracts § 39(a)

Question 68

A, the proprietor of a medical preparation, offers $100 to anyone who contracts a certain disease after using the preparation as directed. B, C and D use it as directed. Is there a contract?

Answer 68

Each has made a contract independent of the others, and is entitled to the $100 if he later contracts the disease. Restatement 2d of Contracts § 29(b)

Question 69

A, a bank, issues a traveler’s letter of credit promising to repay anyone who makes advances to a named beneficiary, up to a certain amount, the amounts advanced to be noted on the letter of credit. Is there an offer?

Answer 69

This creates a power of acceptance in anyone to whom the letter is presented, but only if the notation is made and only so long as the noted amounts do not exceed the maximum. See Uniform Commercial Code § 5-108. Restatement 2d of Contracts § 29(b)

Question 70

A publishes an offer of reward to whoever will give him certain information. There is no indication that A intends to pay more than once. Is there an offer?

Answer 70

Any person learning of the offer has power to accept (see Comments a and c to § 23), but the giving of the information by one terminates the power of every other person. Restatement 2d of Contracts § 29(b)