Contracts Case Brief # 7

Title and Citation: Petterson v. Pattberg, 161 N.E. 428 (1928) *

CLASSICAL CONTRACT LAW *
Identities of Parties: P an executrix of Pettersons estate, and D is
Pattberg who hired P.
Petterson is the debtor and Pattberg is the creditor
Procedural History: P sued D for $780 plus interest. Trial court ruled
in favor of P. D appealed to the Nebraska Court of Appeal.
Facts: P owed $5450 on land that he had bought from the D, as of
April 4, 1924. With around 5 years left, the payment schedule was
$250 every three months. On April 4th the D wrote a letter to P, stating
that he would deduct $780 if the April installment of 250 was paid on
time, and the remaining amount be paid by end of May. P paid the April
installment on time; later in may P went to Ds house to pay off
remaining installments in cash (minus the 780). D refused to accept
money, and told P that he sold the bond and mortgage to a third party.
P was then required to pay amount of remaining principal therefore
losing 780.
Petterson signed a Mortgage, and owned a bond
o Bond = a promise to pay (modern would be note)
Petterson (Mortgagor) --------------- Pattberg (Mortgagee)
Pattberg (OR) ------------- Petterson (OE)
o Make quarterly payment $250 by April 25 + Pay remaining
amount by May 31 = 780 discount
This is a Unilateral contract
Issue(s): (A) Whether the offer of the D was withdrawn before it
became a binding promise?
Did P accept before D revoked its offer?
Holding and Rule: Yes, Any offer to enter into a unilateral contract
may be withdrawn before the act requested to be done has been
performed.
Courts Reasoning: Yes. An offer to enter into a unilateral contract
may be withdrawn before the act requested to be done has been
performed, even if the offeror knows of the offerees intention to
accept and revokes at the very last second before acceptance. The D
offer to P was an offer to enter into a unilateral contract because the D
conditionally promised to reduce the mortgage payment upon P

payment in full. And, because the offer to enter into a unilateral

contract could be withdrawn at any time before the payment was
made, the D properly revoked his offer when P showed up at his house.
Even though P had money in hand and the defendant knew he was
going to perform his end of the agreement, the revocation was still
done before P tendered the money and so is valid.
When the D sold the bond to a third party this is the revocation,
inconsistent with his action to keep the promise/contract with P
Can always revoke before the action has been done, in this case
D sold the bond to a third party before the P fulfilled his promise
(gave him the money)
By the time P came to give him the money, D sold the bond
(revocation of promise)
Judgment and Order: The judgments of the lower courts are
reversed and the P suit is dismissed.
Dissent: The only reason the money was not tendered in this case is
because the D refused to accept the payment. By its very terms, a
promise to accept payment must become binding when an offer to pay
is made. Thus the D revocation was too late.