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53. Does a contract exist that binds the expert and the collector's estate?
A toy collector had purchased 10 antique toys over the last several years and had had them restored by an expert in toy restoration. On June 1, the collector sent the 11th antique toy to the expert with a signed note that read: «Here is another toy for you to restore. As with all prior jobs, I will pay $500 for the work, but no more.» On June 4, after receipt of the collector's June 1 note and the toy, the expert began restoring the toy. On June 6, the collector unexpectedly died. On June 7, unaware of the collector's death, the expert sent the collector a note that stated that the restoration work had begun on June 4. The following day, the expert learned of the collector's death.
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A is incorrect. Either a promise to perform or the beginning of performance operates as acceptance of a bilateral contract offer. As discussed above, the expert's beginning of the restoration of the toy constituted acceptance of the collector's offer. The expert's mailing of the note, although occurring after the death of the collector, also occurred after the beginning of the performance. Acceptance by the beginning of performance had already occurred by the time the collector died. Therefore, notification was not required to make the contract binding.
B is incorrect. Although the death of a party does terminate an offer, the beginning of performance by an offeree operates as acceptance. Here, the expert already began restoration before the collector's death and thus before the offer could lapse. However, if the expert had not started the restoration and only mailed a note of acceptance then the offer would have lapsed due to the collector's death.
C is incorrect. Although the conclusion is correct, the reasoning is not. The offeree's subjective knowledge of the death of the offeror is not relevant in determining whether a binding contract has been formed. Death of a party, regardless of the other party's knowledge, terminates the offer. However, performance prior to termination functions as acceptance of an offer. Here, the expert already began restoration of the toy, which constitutes acceptance of the offer, thus forming a binding contract.