Cobaugh v. Klick-Lewis, Inc.
561 A.2d 1248 (1989)
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Rule of Law:
An offer for a prize in a contest creates an enforceable unilateral contract when an offeree, without notice of the offeror's subjective intent to revoke, completes the performance specified in the offer.
Facts:
- Klick-Lewis offered a 1988 Chevrolet Beretta GT as a prize for a hole-in-one at the ninth hole of the Fairview Golf Course during a charity tournament on May 15, 1987.
- Klick-Lewis placed the car on display at the ninth tee along with signs proclaiming the offer.
- After the May 15th tournament concluded, Klick-Lewis negligently failed to remove the car and the promotional signs.
- On May 17, 1987, Amos Cobaugh participated in a different event, the East End Open Golf Tournament, on the same golf course.
- Cobaugh observed the car and the signs at the ninth tee, which gave no indication that the offer was limited to a prior event.
- While playing the ninth hole, Cobaugh shot a hole-in-one.
- Cobaugh attempted to claim the prize, but Klick-Lewis refused to deliver the car, stating the offer was only for the tournament two days earlier.
Procedural Posture:
- Amos Cobaugh filed a lawsuit against Klick-Lewis in the Court of Common Pleas of Lebanon County (trial court) to compel delivery of the vehicle.
- The parties submitted a stipulation of facts and both moved for summary judgment.
- The trial court granted summary judgment in favor of the plaintiff, Cobaugh.
- The defendant, Klick-Lewis, appealed the trial court's decision to the Superior Court of Pennsylvania (intermediate appellate court).
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Issue:
Does an offeror's objective manifestation of an offer for a prize, which remains posted after the offeror subjectively intended for it to expire, create an enforceable unilateral contract when a party performs the required act?
Opinions:
Majority - Wieand, J.
Yes. An offeror's objective manifestation of an offer creates an enforceable unilateral contract when accepted by performance, regardless of the offeror's uncommunicated, subjective intent. The posted signs constituted a clear offer to enter into a unilateral contract, which invited acceptance by the performance of shooting a hole-in-one. Cobaugh accepted the offer by performing the specified feat. The contract does not fail for lack of consideration, as Klick-Lewis received the benefit of publicity and Cobaugh incurred a detriment by performing an act he was not legally required to perform. The mistake regarding the offer's duration was unilateral and resulted from Klick-Lewis's own negligence in failing to remove the signs; such a mistake does not permit the offeror to rescind the contract. It is the manifested intent, not the secret subjective intent, of the offeror that determines who has the power of acceptance.
Dissenting - Popovich, J.
No. The resulting contract is an unenforceable gambling contract that violates public policy and should not be enforced by the court. The arrangement contained the three essential elements of gambling under Pennsylvania law: consideration (the tournament entry fee), a reward (the car), and an element of chance. Making a hole-in-one is an act of fortuitous luck, not skill, making chance the dominant factor. Because the transaction constitutes gambling, which is illegal in the Commonwealth, the contract is void and unenforceable. The court should raise this issue 'sua sponte' because it has no jurisdiction to enforce contracts that are contrary to public policy.
Analysis:
This case serves as a quintessential example of the objective theory of contract formation, emphasizing that an offeror's manifested intent, rather than subjective intent, governs contract creation. It solidifies the principle that acceptance of a unilateral contract occurs through full performance of the requested act. The decision also reinforces that a unilateral mistake caused by a party's own negligence is not a valid defense to contract enforcement. The case is frequently used in first-year contracts courses to illustrate how a reasonable person's interpretation of an offer can bind the offeror, even if the offeror made a mistake.
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