I think it's because it can only be accepted by performance. He "accepts" the offer to pay him back by beginning to inform; notice isn't needed.bda wrote:I'm confused as to how this is a unilateral contract. Isn't the hardware wholesaler's providing credit to the retailer a return commitment from the wholesaler?
- [+] Spoiler
- A U.S. manufacturer on the west coast gave a hardware retailer who was relocating to the east coast the following "letter of introduction" to a hardware wholesaler on the east coast.
This will introduce you to my good friend and former customer, a hardware retailer, who will be seeking to arrange the purchase of hardware inventory from you on credit. If you will let him have the goods, I will make good any loss up to $25,000 in the event of his default.
/Signed/ manufacturer.
The hardware retailer presented the letter to the hardware wholesaler, who then sold and delivered $20,000 worth of hardware to the hardware retailer on credit. The hardware wholesaler promptly notified the manufacturer of this sale.
Which of the following is NOT an accurate statement concerning the arrangement between the manufacturer and the hardware wholesaler?
A. It was important to enforceability of the manufacturer's promise to the hardware wholesaler that it be embodied in a signed writing.
B. By extending the credit to the hardware retailer, the hardware wholesaler effectively accepted the manufacturer's offer for a unilateral contract.
C. Although the manufacturer received no consideration from the hardware retailer, the manufacturer's promise is enforceable by the hardware wholesaler.
D. The manufacturer's promise is enforceable by the hardware wholesaler whether or not the hardware wholesaler gave the manufacturer seasonable notice of the extension of credit to the hardware retailer.
Answer D is correct. An offer for a unilateral contract seeks acceptance by performance and not a return promise. In order for the acceptance to be effective, however, the offeree must give seasonable notice of acceptance to the promisor where the offeree has reason to know that the offeror will not learn of the acceptance without notice. The manufacturer's offer to the hardware wholesaler is an offer to enter a unilateral contract because the manufacturer does not seek a return commitment from the hardware wholesaler but rather for the wholesaler to provide credit to the hardware retailer. Because the hardware wholesaler lives far from the manufacturer, however, he has reason to know that the manufacturer will not learn of his acceptance unless he gives notice, and therefore the hardware wholesaler must give notice of the extension of credit to the hardware retailer.
A, B and C are incorrect because they are each accurate statements: the manufacturer's promise to guarantee the debt falls within the surety clause of the statute of frauds, the hardware wholesaler's extension of credit to the hardware retailer effected an acceptance of an offer for a unilateral contract, and the manufacturer's promise is enforceable by the hardware wholesaler notwithstanding the fact that the hardware retailer provided no consideration, because the consideration was furnished by the hardware wholesaler.
For the consideration issue, separate consideration is not needed for a surety contract. The original contract provides it.