## Facts

- Homeowners sued a window manufacturer/supplier and others for negligent design and construction after extensive leaks developed around approximately 60 installed window units.
- Plaintiffs served the manufacturer with a written offer to compromise for $10,000 expressly made under California Code of Civil Procedure § 998.
- The manufacturer made a time-limited counteroffer that plaintiffs rejected; discovery proceeded, including depositions.
- Discovery indicated the manufacturer was more culpable than plaintiffs had understood when the § 998 offer was made.
- Plaintiffs sent a written revocation of the § 998 offer, which the manufacturer received before it attempted to accept.
- After receiving the revocation, the manufacturer nonetheless notified plaintiffs it was accepting the earlier § 998 offer and filed a written acceptance in the trial court.
- The trial court struck the purported acceptance and denied the manufacturer’s motion for entry of judgment on the offer.
- The manufacturer sought writ relief to compel entry of judgment on the theory that a § 998 offer is irrevocable for the statutory acceptance period.

## Issues

1. Whether an offer to compromise made under California Code of Civil Procedure § 998 is irrevocable for the statutory period or revocable any time before acceptance under ordinary contract principles.

## Decision

- The California Supreme Court denied writ relief and left the trial court’s rulings in place.
- The court held that a § 998 offer is revocable before acceptance, absent express statutory language or a separate option agreement.
- Plaintiffs’ revocation terminated the offer before the manufacturer’s purported acceptance; therefore, no settlement contract formed and no judgment could be entered on the revoked offer.

## Legal Principles

- An offer made under § 998 is governed by ordinary contract rules regarding formation and termination unless the statute clearly provides otherwise.
- Because § 998 is silent on irrevocability, it does not create an option contract or otherwise prevent revocation without consideration or agreement to keep the offer open.
- Statutory time limits in § 998 identify the outer time for acceptance to obtain the statute’s procedural and cost-shifting consequences; they do not guarantee the offer remains open if revoked earlier.
- A revoked offer cannot be accepted; a post-revocation “acceptance,” even if filed in court, does not create a binding agreement.

## Conclusion

The court held that a § 998 compromise offer may be revoked before acceptance, so the plaintiffs’ pre-acceptance revocation defeated the manufacturer’s later attempted acceptance and barred entry of judgment on the withdrawn offer.


T.M. Cobb Co. v. Superior Court, 36 Cal. 3d 273 (Cal. 1984)