Dispute

Plaintiff, a real estate agent, was made aware of a bonus incentive program offered by defendant, a real estate brokerage and her employer, in which employees who remained with the firm through the end of the calendar year and met certain performance requirements. After plaintiff had remained with the firm through the first nine months of the year and met the performance requirements (receiving a nominal payment toward the bonus), defendant announced an alteration of the terms of the bonus incentive program, stating that the bonus would only be paid to employees who remained with the company through March of the following year. Plaintiff remained with the firm through the end of the year and then accepted another position the following January. Plaintiff demanded she receive the bonus due under the original incentive program and the defendant refused, after which suit was brought. The jury returned a verdict of $24,748.89, which was appealed.

Rules of law

A unilateral contract is formed when an offer may by satisfied only by performance, rather than by a reciprocal promise.

Once extended, an offer for unilateral contract may not be revoked if substantial performance has been completed.

Performance is considered substantial if it contemplates timely completion of performance in accordance with the terms of the offer.

Arguments

Defendant argued that the trial court erred in not granting motion for directed verdict, claiming that plaintiff had not made a case for breach of the bonus agreement. Defendant claimed a lack of acceptance and a lack of consideration.

Plaintiff argued that she remained with defendant’s brokerage and performed at a high level, earning enough commissions to meet the performance requirements of the bonus incentive program, due to the existence of the offer. She argued that she had stayed with the brokerage for nine months of the year and that her partial performance was recognized by the defendant, as evidenced by the partial prepayment of the bonus. She argued that because she had already completed substantial performance, defendant lost the power to revoke the original offer and was thereby bound to its terms.

Conclusion

The court affirmed the jury’s finding and award. Particularly, they found that the partial but substantial performance of the offer’s requirements prevented the defendant from revoking the original offer, as this performance was sufficient to constitute acceptance.