Petterson
was the owner of a house.Pattberg loaned Petterson $5450, secured by the property, which was
payable in monthly installments of $250.
In
late April, Pattberg offered Petterson a deal to pay off the entire
mortgage by the end of May for a $780 discount.In late May, Petterson offered to pay the rest of the
mortgage to get the discount.
Pattberg
refused to take the money and claimed he had sold the mortgage to someone
else and the offer was no longer valid.
By
this time, Petterson had already sold the house to someone else and
needed to pay off the mortgage.Without the offer he claimed a loss of $780.He sued.
Trial
Court found for Peterson.
Pattberg's
offer was a unilateral contract, a
promise in exchange for the performance of an act.
Trail
Court found that it is elementary that any offer to enter into a
unilateral contract may be withdrawn before the act requested to be done
is performed.However, they felt that the offer
had not been properly withdrawn.
Until
Peterson came to pay off the loan, Pattberg had never told him that the
offer was withdrawn.
Appellate
Court reversed the decision.
Appellate
Court found that the performance
was the actual payment of the money.Pattberg canceled the offer seconds before Petterson
gave him the money, so the offer was legitimately canceled.
The
fact that Petterson offered to pay the mortgage didn't count, he actually
had to hand the money to Pattberg.
There
was a dissent, who felt that Pattberg's refusal to take the money (refusal
to perform) constituted a legitimate cancellation of the offer, it was
simply refusal to perform, and that's not legal.The dissent argued that it was Petterson's offer to pay
that constituted his performance under the contract, so it was too late
for Pattberg to refuse.
The
dissenters still said that this was a unilateral contract, they just disagreed as to when it could be
canceled.
Later,
New York enacted a Statute saying making what Pattberg did illegal.
