David Seidemann: When Harry sued Sally

From the other side of the bench

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The following legal question was presented in law school. Sally offers $5,000 for a rare collection of 10 books. Harry, unaware of her offer, gives her nine of those books as a present. Harry then finds out about her $5,000 offer and tracks down the 10th volume and demands the fee. Sally refuses to pay. If Harry would sue Sally what would the outcome be?

The general law of contracts provides that one cannot legally accept an offer that he does not know exists. Since Harry delivered the books without knowledge of the offer, he cannot receive the payment. Similarly, if one provides information regarding a crime without knowing of a reward that has been offered for such information, he is out of luck.

The aforementioned scenario with Harry and Sally however is a bit different and a bit nuanced. In our case, Harry did not know of the offer when he delivered the first nine volumes of the treasured books. But he did know of the offer and was spurred into action after acquiring knowledge of the offer. The delivery of the 10th volume was directly connected to the offer Sally made.

So how much does Sally owe Harry? One could argue that $5,000 divided by 10 volumes is $500 per volume. Therefore Sally owes Harry only 500 for the 10th and final book. No payment would be due for the first nine volumes because Harry was unaware of any payment offer for the books when he initially acted. Such a ruling would be in accordance with fundamental precepts of contract law.

On the other hand, one could argue that nine volumes are worthless and have no value until the 10th volume is included. Analyzed that way, Sally would owe Harry the full $5,000 as the meaningful action on Harry’s part occurred only after he became aware of the $5,000 offer. Until the last volume was supplied, the individual books had no value. The totality of their value was only realized after Harry became aware of the contractual offer, which was an offer he accepted. Nine books are worth nada and the set of 10, and only all 10 together, are worth $5,000.

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