American Contract Law for a Global Age, 2017a

In the modern world, the question of who made the offer and who made the
acceptance is often irrelevant because the existence of mutual assent is so clear.
When you carry the goods to the checkout counter, or click the “buy” button on a web
site, or buy a burger at a fast-food window, or haggle with your friend about buying
her car, the question of whether you are the offeror or offeree in such transactions
makes little difference. Yet while issues of offer-and-acceptance are relatively
unimportant in some transactions, they are critical in others—especially in a world
in which parties deal with each other at great distances. You need think back only to
Augsberg v. Leslie, in the last unit, to recall the argument that Ryan Leslie’s internet
pleas were not offers.
Asynchronous Contracts. The issue of contracts entered into by exchanges of
communications at a distance is a comparatively new thing in the many centuries of
the common law. Until there were reliable means of exchanging communications (the
post and the telegraph) and recipients who could actually read, contracts were rarely
formed at a distance. In the rapidly industrializing 19th century, however, such
contracts began appearing with some frequency. One obvious question was how the
minds of two parties can meet if they are not acting at the same time. As commerce
in England was more advanced than that in the young United States, English courts
often dealt with these issues before their American counterparts, and their decisions
had a substantial impact.
Another important point addressed in Augsberg v. Leslie is the idea that a
public offer of a reward is (in the legal sense) an offer—as Mr. Leslie discovered. This
rule was settled in important English cases like Williams v Carwardine, 10 E.R. 590
(K.B. 1833). That the mere fact that the reward seems extravagant does not
necessarily let the offeror off the hook, as another English court held in Carlill v.
Carbolic Smoke Ball Co., 1 Q.B. 256 (C.A. 1892), which also held that a newspaper
advertisement could be an offer. “If a person chooses to make extravagant promises,”
wrote Lord Justice Bowen, “he probably does so because it pays him to make them,
and, if he has made them, the extravagance of the promises is no reason in law why
he should not be bound by them.” You will meet Carbolic Smoke Ball again in the
cases below. 1
Offer Inviting Acceptance. We now start with the idea of the “offer.” What
kinds of statements qualify as “offers” for purposes of contract law? As you will see,
there are no magic words—everything depends on wording of the communication and
1 [The infamous advertisement—which you can easily find online—stated that a £100 “reward
will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic
influenza, colds, or any disease caused by taking cold, after having used the ball three times daily for
two weeks, according to the printed directions supplied with each ball.” 1 Q.B. at 257. Mrs. Louisa
Elizabeth Carlill used the vapor-emitting ball in her nose three times daily for about two months before
she contracted the flu. Upon Carlill’s demand for £100—equivalent to about $30,000 as these materials
are written—Carbolic refused to pay, claiming, among other things, that the advertisement was not
an offer. They lost. – Eds.]
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56 CHAPTER II: CONTRACT FORMATION