Industrial America, Inc. v. Fulton Industries, Inc.
Facts
B-H, Inc. sought to merge with another company and hired Industrial America (P) to assist in finding a suitable target. All of Industrial America’s attempts failed and B-H eventually decided not to pursue a merger but did not inform Industrial America.
Industrial America later approached Fulton Industries (D) regarding a merger with B-H and Fulton assured Industrial America that it would be protected. The merger was ultimately successful and Fulton refused to pay on the grounds that Industrial America was B-H’s agent and B-H had terminated its offer for arranging the merger. Industrial America sued Fulton alleging that it had performed as requested and its motive was not relevant.
Issue
- In a unilateral offer, is the motive of an offeree in performing the requested act material to the issue of contract formation?
Holding and Rule of Law
- No. In a unilateral offer, the performance of the requested act is an acceptance of that offer. The underlying motive for the performance is not relevant.
Absent a showing that the offeree never intended to accept the offer, the subjective intent of the performing party is not relevant. The intention of acceptance is unimportant except as manifested objectively. Motive in manifestation of assent is immaterial. Industrial America knew of the guarantee and performed the requested act and this performance was sufficient to create a binding contract with Fulton Industries.
Disposition
Judgment for plaintiff Industrial America.