Reference no: EM131473644

Question: CIM INSURANCE CORP. v. CASCADE AUTO GLASS, INC., 660 S.E.2D 907 (N.C. APP. 2008)

FACTS Cascade Auto Glass, Inc., is an automobile glass replacement company. Between 1999 and 2004, Cascade repaired or replaced damaged windshields in at least 2,284 vehicles insured by GMAC-affiliated insurance companies. Before 1999, GMAC administered its own glass repair or replacement program, and typically paid the full amount billed by Cascade for work performed for its insureds. In 1999, GMAC contracted with Safelite Solutions to serve as a third-party administrator of its auto glass program. Safelite informed Cascade that GMAC would now pay lower prices for Cascade's services. Cascade disputed the Safelite prices. However, when an insured sought services, Safelite would send Cascade a confirmation fax stating the lower price that it would pay and including a statement that "[p]erformance of services constitutes acceptance of the above price." Although Cascade then would perform the services and bill GMAC a higher rate that it deemed "fair and reasonable," GMAC, through Safelite, paid Cascade at the lower prices quoted in its faxes. Cascade accepted these payments and deposited them into its bank accounts. After Cascade threatened to sue GMAC for the additional sums it said were owing, GMAC filed suit seeking a declaration of the rights of the parties.

The trial court entered summary judgment for GMAC, and the appellate court affirmed. DECISION The appellate court began by explaining the nature of a unilateral contract: A unilateral contract is formed when one party makes a promise and expressly or impliedly invites the other party to perform some act as a condition for making the promise binding on the promisor. Here, GMAC, through Safelite, informed Cascade of the prices it was willing to pay for services rendered by Cascade to its insureds through several means, including letters, telephone calls, confirmation faxes when claims were made but before work was done, and payment of invoices at GMAC's stated rate. Although Cascade protested GMAC's prices, Cascade's own protests indicated that the faxes constituted offers from GMAC: "The purpose of this letter is to address [the confirmation faxes] and to dispel any notion that we are in agreement with the offered pricing." As the appellate court stated: "It is a fundamental concept of contract law that the offeror is the master of his offer. He is entitled to require acceptance in precise conformity with his offer before a contract is formed." Here, the offer stated that performance equaled acceptance. Thus, by performing the requested repairs or replacements, Cascade accepted the terms of GMAC's offers, and formed valid unilateral contracts at GMAC's stated prices. Summary judgment for GMAC was affirmed.