Davis v. Jacoby
1 Ca.2d 370, 34 P.2d 1026 (Cal. 1934)

  • Davis lived with her aunt and uncle, the Whiteheads, while growing up.
  • Years later, Ms. Whithead’s health was failing, and the uncle suggested Ms. Davis come to visit.  He also suggested that he needed someone to help him manage his affairs and his property, and thought that Ms. Davis and her husband could do it.  He explained that all of his property was community property that would go to his wife, and that he thought that the wife’s will gave everything to Mrs. Davis.  The Davis’ agreed to go to California, but before they got there, Mr. Whitehead killed himself. Mrs. Whitehead died a month later.
    • Mr. Davis left his business to move to California (establishing a reliance).
    • Remember, death automatically revokes an offer.  So if there was no contract, if it was just an offer without an acceptance, then there would be no contract.
  • It was later determined that Mr. Whitehead had bequeathed all of his money to his other nephews a few days prior to contacting Ms. Davis.  One of the nephews, Rupert Whitehead had assumed a contractual obligation to make a will in which Ms. Davis would “inherit everything,” but he had failed to do so.
  • The Trial Court found that the letters was an offer for a contract, but that offer could only be accepted by performance and not just a promise to perform.  Since Mr. Whitehead died prior to Davis arriving in California to help, the offer was effectively revoked.
    • The Trial Court felt that this was a unilateral contract that could only be fulfilled by performance.  Since the Davis had not actually performed, the contract was just an offer without an acceptance and was therefore revoked upon the death of Whitehead.
  • The Appellate Court reversed the decision.
    • The Appellate Court found that the letters were an offer to enter into a bilateral contract, and not a unilateral contract.  Therefore the contract became enforceable as soon as Davis promised to perform!
      • In the letters, he wanted “to hear from you,” which he got.
      • Since this is an enforceable bilateral contract, if Davis had sent the letters, but never came to California, Whitehead could sue for breach of contract.  Does that make sense?
  • A unilateral contract is one 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 being a promisor as well as a promisee.
    • An offer to sell which is accepted is a bilateral contract, while an offer of a reward is a clear-cut offer of a unilateral contract which cannot be accepted by a promise to perform, but only by actual performance.
    • If you offer someone $100 to jump off a bridge, they are not obligated to jump off the bridge, but if they do, you are obligated to give them $100.  This is an example of a unilateral contract.  The obligation is only on one party.