Aon Risk Services Inc. v. Meadors, 267 S.W.3d 603 (Ark. App. 2007) Unilateral Co

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Aon Risk Services Inc. v. Meadors, 267 S.W.3d 603 (Ark. App. 2007) Unilateral Contract: Pretty Good Bonus! Aon Risk Services, Inc. (ARS Arkansas), and Combined undenstanding that his assent to the bargain is invited and will Insurance Companies are subsidiaries of Aon Corporation conclude it. An offer cannot be accepeed so as to form a con- The parent corporation issued an·Interdependency Memo" tract unless the terms are reasonably certain. Resannon wr (Sn dated February 2000, which encouraged ARS brokerage onofContracts $ 33 (1981). To bind the employer, an offer offices to place insurance business with Aon-affiliated compa- must be definite in form and must be communicated to the nies. It also set up a bonus pool for revenues generated under offeree. See Handie s. Cotter d Ca. 849 F.2d 1097 (18th Cir. the plan, with Combined agreeing to pay "30% of annualized 1988) ril AndrdMag rehmen!Hamre, Inc. 380 N. premium on all lie products over 15-year term plus 15% W.2d 544 (Minn. Ct App. 1986), whether a proposal is 1 year for all other products."John Meadors saw the memo meant to be an offer for a unilateral contract is determined in February 2000, and believed it would entitle him to this by the outward manifestations of the parties, and not by their compensation over and above his employment contractsubjective intentions. The principle issue is whether the Meadors put Combined in touch with Dillard's Department employer's statements are intended as an offer and accepted Stores and on March 24, 2000, Dillard's and Combined exe as such or are merely statements of policy and practice. id cuted a five-ycar agreement whercby Dilland's employe could purchase life, disability, and other insurance policies d Mma etan 616N.W. 2d 732(Minn. 2000), but it through workplace enrollment. When Meadors did notis distinguishable. There, the Minnesota court held that a receive bonus-pool money generated by the transaction, he brochure touting equal compensation for technical and sued his employer for breach of a unilateral contract. The administrative employees was too indefinite to constirute an employer's defense was that the memo was not sufficiently offer. The court noted that there was no suggestion that an definite to constitute an offer. ARS... relies heavily on Martens Minnesots Minning individual would be entitled to specific pay, benefit level, or condition of employment, nor were there any criteria to deter- mine when the rights to any benefits had been breached JUDICIAL OPINION VAUGHT, J.... Meadors's theory at trial was that the InterFurther, the prerogative to make decisions as to individual dependency Memo formed a unilateral contract. There are employee promotions, salaries, and so forth was dlearly several instances where unilateral contracts commonlyreserved to management based on an evaluation of the indi- appear, such as where a reward is offered, a gAnk. Bankenvidual. By contrast, the interdependency Memo in this case Ass'n . Ligon 174 Ark. 234. 295 S.W. 4 (1927), where a does not mercly set out general goals and philosophies of com- contest is announced, .g. Mears .Natiomoide Mat. Ins. Ca pensation. It sets our specific percentages of premiums that 1 F.3d 1118 (8th Cir. 1996), or where changes are made will go into the bonus pool as part of an "enhanced compen- and disseminated in an employee manual. See Crain Indas.. sation structure. And, while no employee is entitled to a /nc. ?1, Case 305 Ark. 566, 810 s.W.2d 910 (1991). In those -formulaic-bonus and Managing Directors may decide how situations, the offeree does not accept the offer by expressto allocate the bonus pool among their employees, their dis agreement but by his performance. For examplc, in the cretion is not unfettered. For example, managers cannot with- case of a reward, the offeree accepts by performing the par hold payment of the pool amount; the Memo provides that ticular task, such as the capture of a fugitive, for which the the entire pool must be distributed annually. Thus, the mere reward is offered. Even though he has not directly commu-inclusion of possible judgment calls by management as to the nicated his acceptance, a contract is formed as the result of manner of distribution among its employees does not, under his performance. See Ligon, sspra (recognizing that a unilatthese circumstances, render the Memo too indefinite to oper eral contract is composed of an offer that invites acceptance ate as an offer for a unilateral contract.... in the form of actual performance), 17A AM. JUR. 2D Com- racts $5 (2d ed. 1991) (stating that, if then the offer has been accepted, and a contract is formed) We affim the jury's verdict for breach of a unilateral con The performance also constitutes consideration for the con-trct agist tract. 17A AM. JUR 2D Contracts performance occurs, CONCLUSION ARS Arkansas and reinstate Meador's damages of $2.406,522.60 pertaining QUESTIONS to the Dillard's transaction... Definiteness of offer ARS Arkansas argues first that the interdependency Memo was not sufficiently definite to constitute an offer for a unilat eral contract. An offer is the manifestation of willingness to2.Was the "Interdependency Memo" too indefinite to enter into a bargain, so made as to justify another person in 1. Must an offeree accept an offer by express agreement onder for a legally enforceable contract to be formed offer?

Explanation / Answer

Must an offence accept an offer by Express agreement in order for a legally enforceable contract to be formed?

According to the contract law both of the parties have to give the clear agreement on the offer which could be orally or clearly written and stated. It is required that an offeree accept the offer for the legal enforcement of the contract to be formed.

Was the In dependency memo too indefinite to constitute an offer?

Inter dependency memo does not early set out general goals and philosophy of the compensation hence we can say that it is too indefinite to constitutes an offer.

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