New York Court of Appeals
The Honorable Jenny Rivera
African Diaspora Case
Should the court should affirm the appellate court's decision and reject summary judgment in favor of GYYC? Answering this overriding question requires examining whether the parties entered into a contract, but the issue of whether the contract was breached is a factual issue, which should be solved at trial, not through the summary judgment process. There are four issues related to whether or not the parties' actions formed a contract. First, is the Protocol an offer or, instead, a solicitation for an offer? If the Protocol is an offer, what are the terms of the offer? How does the Protocol evidence an intent by GGYC to be bound? Bound to what? If the Protocol is an offer, how can the offer be accepted? Has ADM accepted the offer? What is the consideration in the contract alleged by ADM? If the Protocol is an offer, and ADM accepted it by its application, does GGYC have complete discretion to reject a Defender Candidate application?
Analysis: While Golden Gate Yacht Club (GYYC) argues that the language of the protocol African Diaspora Maritime Corporation (ADM) "insists that the rules of a contest constitute a contract offer and that a participant's entry into the contest constitutes an acceptance of that offer."
The America's Cup is clearly a contest, as it is a sporting event pitting one boat against another. However, that fact does not necessarily mean that GYYC's invitation for applications is also a contest. However, when one sees that the different applicants are being asked to apply for an opportunity to race against one another, in order to qualify to race in the America's Cup, it becomes clear that it is a contest. In fact, the majority opinion of the appellate court, Judge Acosta determined that ADM did state a breach of contract claim, interpreting the rules of offer and acceptance, not as it would in a business scenario, but as it would in the event of a contest.
"It is hornbook law that the rules of a contest constitute a contract offer and that the participant's [entry into] the contest 'constitute[s] an acceptance of that offer, including all of its terms and conditions.'"
In other words, a contest is not governed by the same offer and acceptance rules that one would use to judge the existence of a contract in other circumstances. To find this, the court relied heavily on the decision in Sargent.
Moreover, because articles 8 and 9 of the Protocol were explicit, definite, and certain in their details for how to apply to be a Defender Candidate, the Protocol constituted an offer. ADM accepted the offer by tendering its application to become a Defendant Candidate. This is reinforced by the fact that ADM used the exact language in their application that GYYC specified was to be used in the Protocol.
Therefore, there was not only an offer by GYYC, but also an acceptance by ADM. Combined with consideration, which was transmitted in the form of a $25,000 application fee, all of the requisite elements of contract formation were present: offer, acceptance, and consideration.
In his dissent, Justice Tom states, "Dispositive of the question of contract formation in general is whether indeed an offer has been made. If so, whether the offer invites acceptance by the means used; and whether all conditions required for a valid acceptance have been fulfilled."
Justice Tom believes that the Protocol is merely extending an invitation for applications. However, the fee attached to the application seems unduly burdensome if it does not trigger some duty. It is, in fact, a request that the applicants tender consideration, not a request for a donation or gift. The giving over of this application fee suggests that the parties are entered into a contract, not a contract that obliges GYYC to name ADM a Defender Candidate, but a contract that then obliges GYYC to review ADM's application in good faith to determine whether it satisfies GYYC's qualifications for a candidate.
Knowing that it is an invitation for a contest, the Protocol becomes an offer and the application acceptance. However, it is important to examine what GYYC is offering. The lower court determined that "there is nothing in the language of the Protocol which indicates an intent that GGYC be bound upon the receipt of a Defender Candidate application and the accompanying fee to do more than review said application. Indeed, the acceptance of a Defender Candidate application is dependent upon both GGYC being "satisfied" with the resources and experience of...
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