Bilateral versus Unilateral Contracts. D.L. Peoples Group (D.L.) placed an ad in a Missouri newspaper to recruit admissions representatives, who were hired to recruit Missouri residents to attend D.L.'s college in Florida. Donald Hawley responded to the

Question

ad, his interviewer recommended him for the job, and he signed, in Missouri, an "Admissions Representative Agreement," which was mailed to D.L.'s president, who signed it in his office in Florida. The agreement provided in part that Hawley would devote exclusive time and effort to the business in his assigned territory in Missouri and that D.L. would pay Hawley a commission if he successfully recruited students for the school. While attempting to make one of his first calls on his new job, Hawley was accidentally shot and killed. On the basis of his death, a claim was filed in Florida for workers' compensation. (Under Florida law, when an accident occurs outside Florida, workers' compensation benefits are payable only if the employment contract was made in Florida.) Is this admissions representative agreement a bilateral or a unilateral contract? What are the consequences of the distinction in this case? Explain.

Answer 1

Bilateral versus unilateral contracts
The court held that the employment agreement was a unilateral contract that could be formed only by Hawley's performance in Missouri, and thus that the accident causing Hawley's death was not compensable under Florida law. Arguing that its agreement with Hawley was a bilateral contract executed in Florida, D.L. appealed to a state intermediate appellate court, which reversed the judgment of the lower court and held that the agreement was a bilateral contract. The appellate court stated, "To form a bilateral contract, there must be mutuality of obligation. Here, Hawley and Appellant clearly made mutual promises. Thus, the agreement is a bilateral contract. . . . A contract is created where the last act necessary to make a binding agreement takes place. Where one contracting party signs the contract, and the other party accepts and signs the contract, a binding contract results. It is undisputed that Hawley signed the agreement then sent it to [D.L.] in . . . Florida, where it was signed and executed by [D.L.'s] President. Because the last act necessary to complete the agreement, . . . was performed in Florida, the contract was made in Florida." The consequence of this decision is that, as noted in the problem, if a contract is formed in Florida, the accident is compensable under Florida workers' compensation law.