An Unqualified Offer to Pay a Reward Cannot Be Later Qualified or Negotiated

December 17, 2012

A musician's laptop, loaded with valuable proprietary information, was stolen while he was on tour in Germany. A reward was offered, initially set at $20,000, but later raised to $1 million. The plaintiff found the laptop and returned it, but the reward was not paid because the hard drive had allegedly been returned with corrupted information. The musician had the hard drive examined and wiped when the data could not be recovered.

The musician argued that he intended the reward to be for the return of his data and information, not just the physical laptop. He also argued that the reward was akin to an advertisement, but not a firm offer to pay anything.

The court in Augstein v. Leslie addressed the second argument first, and rejected it. A reward, wrote the court, was intended to "induce performance" by the "'offeree [for] a specific action.'" The news reports of the theft and subsequent reward "would lead a reasonable person to believe that [the musician] was making an offer." Notwithstanding the size and significance of the amount, the reward was a promise to pay if a service was provided. Because that was the case here, the plaintiff could collect the reward.

The court then determined that the data had been on the hard drive when it was returned, and no matter its value or condition at that time, especially because it was the musician that had the hard drive wiped, the plaintiff had complied with his obligations to reap the reward.