Unilateral Contracts and Firm Offers Problem: Doctrinal common law rule is that offer can be revoked before acceptance. Even a firm offer – a promise not to revoke – is not binding without consideration. How can reliance on offer be protected? Resolution: Need seal or good consideration. 1. Court can imply a promise not to revoke the bargain (Errington v Errington) Two contract approach Contract #1: pay mortgage and house will be yours Contract #2: so long as you pay the mortgage you may remain in possession (an implied promise not to revoke Contract #1) 2. Court can find that there is a bilateral contract (an exchange of mutual promises) (Dawson v Helicopter Exploration Co. Ltd.) 3. Difference between unilateral and bilateral contract (a) I will pay you $500, if you find my dog. (unilateral contract - offer accepted upon performance) (b) I promise to find your dog. In exchange you promise to pay me $500. (bilateral contract - exchange of promises) Note: In (a), the unilateral contract, there is no binding obligation to find the dog. In (b), the bilateral contract, there is a binding obligation to find the dog. If I fail to find the dog, you can sue me for breach of contract.
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