BC Tire Corp. v. GTE Directories Corp.

Brief Fact Summary.

Plaintiff sued Defendant for breach of contract when Defendant failed to include Plaintiff’s advertisement in the local phonebook. The trial court granted Defendant’s motion for summary judgment. Plaintiff appealed.

Synopsis of Rule of Law.

An offer for a unilateral contract may only be accepted to form a contract through performance by the offeree.

Facts.

BC Tire Corporation (Plaintiff) requested that GTE Directories Corporation (Defendant) publish an advertisement in the local phonebook and agreed to pay a monthly advertising fee. Plaintiff completed and signed a Defendant application form, which stated that publication of the advertisement would constitute acceptance of the application and that otherwise the application was not binding on the parties. The application also contained an exclusionary clause, stating that Defendant would not be liable to Plaintiff for damages resulting from a failure to publish an advertisement. Defendant failed to include Plaintiff’s advertisement in the phonebook. Plaintiff sued Defendant for breach of contract. Defendant requested summary judgment on the grounds that there was no contract between the parties, and, if there was a contract, Defendant’s liability was limited by the exclusionary clause. The trial court granted summary judgment for Defendant and dismissed the action. Plaintiff appealed.

Issue.

Whether an offer for a unilateral contract may only be accepted to form a contract through performance by the offeree.

Held.

Yes. The trial court’s ruling is affirmed. An offer for a unilateral contract may only be accepted to form a contract through performance by the offeree.

Discussion.

An offer for a unilateral contract may only be accepted, and a contract will only be formed, through performance by the offeree, after which only the offeror’s promise remains to be performed. The application signed by Plaintiff stated that publication of the advertisement would constitute acceptance of the agreement and that, otherwise, the application was not binding on the parties. In other words, Plaintiff offered to pay the monthly advertising fee upon Defendant’s publication of the advertisement. The application signed by Plaintiff is therefore an offer for a unilateral contract. Because Defendant did not publish the requested advertisement, it did not accept the offer, and no contract was created. As there was no contract between the parties, there is no need to determine whether the exclusionary clause is unconscionable.