Contracts Outline
· Legal Definition of a Contract-> a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty
o Voluntary, consensual relationship
· Elements of a Contract
o Exchange relationship-> 2 or more people`
o Created by agreement
o Contains at least one promise
o Enforceable by law
· Remedies
o Compensatory damages
o Specific performance
o Equity->Kilarjian v. Vastola (sale of house negated)
· Sale->passing of title
· Good->moveable at time of ID
o Future goods included but not cash
o UCC applies to these transactions
· Service
o If not a good, than considered a service
o Common Law and Restatements apply
· Hybrid Transaction
o Includes both elements of the sale of a good and a service
o Predominant Purpose->look at the whole contract
· Language
· Circumstances
· Primary Purpose
· Final Product
· Cost involved
o Gravaman Test->look at what the problem is involved, not
· Custom Communication v. Johnson->main purpose was the product
· Apply Either UCC or Common Law
To Determine Assent
· Objective Standard
o What a reasonable person would construe the opposite parties actions
o Usually actions not thoughts
o Lucy v. Zehmer->Actions/conduct overruled subjective
· High as a Georgia Pine
· Subjective Standard
o Thoughts/state of mind
o Only comes in when:
· Contract is clear and
· Wont mislead the jury
o Kabil v. Mignot->Subjective testimony allowed->wouldn’t mislead jury (helicopter)
· Duty to Read
o James v. McDonald’s->she should have read
o Need not to be read to be enforceable
Offer under Common Law
o Restatements
o A manifestation of willingness to enter into a bargain so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it
§ Clear to reasonable offeree that his acceptance will bind the parties immediately
o Option and Firm Offer
o Binding commitment not to revoke
Offer Under the UCC
o Conduct/Recognizes Existence in Any Manner Sufficient/Intent
o Even if moment of making undetermined
o One or more terms left open; Appropriate remedy/consideration
o Fletcher v. Pote Concrete (Contract Bid)
§ Look at language-Firm Offer
o People v. Braithwaite (Cocaine/Informatn)
§ Gandolfo (2-Pronged Test)
· Bona Fide offer or agreement
· Intent to complete transaction
Advertisement/ Solicitation of Offer
o Generally are NOT considered offer UNLESS:
o Clear
o Definite
o Explicit
o Leaves nothing up to negotiation
o Target Audience
o Specific Act to Accept
o Leftowitz-> Limiting language (Ad For Coat)
o Harris v. Time->Leaves nothing for negotiation (Frivolous Time mag offer)
o Carbolic Smoke Ball-> $1,000 in bank, language
o Pepsi, Co.->unreasonable belief
Acceptance
o All acceptance must be 1)knowing, 2)voluntary and 3) deliberate which is measured by the
Common Law
o Restatement Second
o Acceptance is affirmative answer through, words, performing or not performing or may leave how to assent to the offer up to the offeree
o Unless otherwise indicated by language/circumstances->acceptance by reasonable manner or medium
o Acceptance must be communicated unless offer says otherwise
o Qualified->conditional acceptance
o Unqualified->pure acceptance
o Silence as Accepta
;Pop-up terms; Terms must be reasonably clear and conspicuous
· Shrink wrap->Inside of package
o Casavant (cruise)
o Netscape à hidden not clear)
· Rolling->Cash now Terms later
· ProCD->rolling contracts->Acceptance by continued use after notification of terms
o Must be reasonable terms (can’t say pay me 1 million dollars)
· Fundamental Fairness – Casavant – not enough time to respond – reasonable time period
o Fundamental Fairness
o Amount of time to respond to terms
· Lexmark->Prebate
o Reinforced Box-Top Terms
o Notice, Chance to Reject, and Consideration
o UETS and E-Sign and Electronic Agents
§ Can form contracts even if no individual is currently operating
§ Intent to be bound established when programming the bot
§ Applicable to all contract
o Sayeedi->Engine Defective
§ Warranty Issue-not contract issue
Battle of the Forms SS 207
· Is it a Contract
o Definite
o Seasonable
o Unconditional
· If YES go to Part 2; If no go to Part 3
o Part 2: Are they both merchant?
§ Merchant->A person or an agent who deals or has knowledge of goods or services in question
o If NO
§ New or Additional terms are proposals
§ Don’t Forget About Silence (SS 69)
o If YES
§ Terms become part of contract UNLESS:
· Offer expressly limits terms of offer
· Materially alter OR
· Notification given or
