Cobaugh v. Klick-Lewis, Inc.
385 Pa.Super. 587, 561 A.2d 1248 (Pa. Super 1989)

  • Cobaugh was playing in a golf tournament.  When he got to the 9th hole, there was a car and a sign claiming that the first person to get a hole-in-one wins the car (provided by Klick-Lewis).  Cobaugh got a hole-in-one and tried to collect his car.  Klick-Lewis refused to give him the car.  Cobaugh sued for specific performance.
    • Turns out, Klick-Lewis had offered the car for a different charity tournament a few days before, but hadn’t bothered to take the sign down before Cobaugh played.
    • Klick-Lewis also tried arguing that the proposal was nothing more than a gift with no consideration, and was therefore unenforceable.
  • Trial Court found for Cobaugh.  Klick-Lewis appealed.
    • The Trial Court found that this was a unilateral contract, that Cobaugh accepted via performance.
  • Appellate Court affirmed.
    • The Appellate Court found that it is the manifested intent of the offeror and not his subjective intent, which determines if persons have the power to accept the offer (see 2nd Restatement of Contracts §29).
      • In this case, the manifested intent was that the hole-in-one challenge was still a valid offer.
    • The Court found that the hole-in-one was consideration.  Plus, Klick-Lewis benefited via the publicity they got during the charity tournament.
    • Klick-Lewis could have avoided this by taking their sign down, but that was their mistake and did not constitute a mistake on the part of Cobaugh.  Making a mistake does not permit one to avoid a contract obligation.
    • Klick-Lewis might have been able to argue that the contract was illegal because it was “gambling,” but they didn’t argue that.
  • A dissent, it was argued that since making a hole-in-one is luck, not skill, the contract should be considered gambling and is therefore illegal and unenforceable.
  • Once you’ve made an offer, there has to be a way to revoke it.  Here it would have been easy for Klick-Lewis to take down the sign, but what if there was an ad in the newspaper?  The courts have said that you can revoke an offer for a reward the same way you make it.  So if you run an ad in the newspaper, you can revoke it by running an ad in the newspaper.
    • This principle was used in 1865 after Lincoln was killed, in the case of Shoey v. United States.  The Secretary of State put an ad in the paper for a $25k reward for the capture of one of Booth’s accomplices, John Serrat.  Months later, they revoked the offer via an ad in the same newspaper.  Some guy named St. Marie who read the ad moved to Rome and found Serrat, who was working for the Papal Guard!  He never saw the revocation.  The US Supreme Court found that the offer was properly revoked, so St. Marie does not get the $25k.
      • Congress felt bad and gave him $10k anyway.