Contracts Boss Fall 2016
Basic Definitions:
Contract: An agreement between two or more persons as to something that is to be done in the future by one or both of them.
Formation of a contract requires “a bargain in which there is a manifestation of mutual assent to the exchange and consideration” -Boss
Mutual Assent – process of offer and acceptance until deal is reached or negotiations are broken off, objective manifestation of intent to be bound
Needs to be defined:
Ameliorate-
Promulgation-
UCC § 1-201(b)(12)
“Contract, as distinguished from “agreement,” means the total legal obligation that results from the parties agreement. . .”
UCC § 1-201(b)(3)
“Agreement”, as distinguished from “contract,” means the bargain of the parties in fact, as found in their language or inferred from other circumstances
Restatement 2nd Contracts § 1:
“A contract is a promise or a set of promises for the breach of which the law gives a remedy . . .”
Restatement 2nd §22 – The manifestation of mutual assent to an exchange ordinarily takes form of offer followed by acceptance
MANIFESTATION OF INTENT TO BE BOUND
Restatement 2nd § 2
A promise is a manifestation of intention to act or refrain from acting in a specified manner, so made as to justify a promisee in the understanding that a commitment has been made
Types of contracts:
Unilateral Contract: A contract in which performance is based on the wish/will/pleasure of one of the parties
Once there is substantial performance, the offeror may not revoke
Bilateral Contract: A commitment on both sides a contract, often made by an ‘offer and acceptance’ and a negotiation process.
Rules of Offer and Acceptance:
Acceptance has to occur within the time specified in the offer
Otherwise the offer ‘lapses’
The offer can be revoked by the offeror at any point PRIOR to acceptance
The offeror must communicate the rejection of the offer in order for it to be effective
Clickwrap Agreement – a type of contract in which a user must agree to terms and conditions prior to using the product or service.
Restitution and Promissory Estoppel involve possible liability between parties even though no contract (in traditional sense) has been formed
Restitution – When you don’t follow a contract and need to return the benefits. When you enter a contract and there is reliance on the other party under the terms and conditions of the contract then reliance protects plaintiff by enforcing the contract
Promissory Estoppel: § 90: A promise which the promisor should reasonably expect to induce action or forbearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise
Introduction to Contracts
Allen v. Bissinger Page 18
Facts:
– Plaintiff sent letter to Defendant asking if Defendant wanted to purchase papers regarding changes from hearings regarding shipping changes
– Defendant was expecting just pamphlets but instead received crates of documents regarding all of the hearings
– Defendant refused to pay
Rule/take away:
– The communication between the parties suffices as an acceptance of an offer and Defendant cannot be relieved because the bargain is burdensome or unprofitable
– Even though the parties did not explicitly state the amount of everything and the costs, the defendant still agreed to the terms
– There was a manifestation of agreement to future action and exchange of goods
*mirror image rule does not apply to Allen v. Bissinger*
Feldman v. Google, Inc. Page 21 (Clickwrap agreement)
oke offer and offer to someone else until he accepted as long as it was communicated to him. It was (“you snooze, you lose”).
Concerning nature of counter offers and how to revoke offers.
-Specific Performance under Restatement §35 “The offeror is the creator of the power, and before it leaves his hands, he may fashion it to his will…if he names a specific period for its existence, the offeree can accept only during this period.”
-Also focuses on Restatement §59 where a “qualified acceptance” constitutes only a counter-offer
Rule/Takeaway:
-Once the offer to buy has been signed the contract is formed and seller can’t sell to another until the time is up
Mutual Assent: Offer and Acceptance in Unilateral Contracts
Cook v. Caldwell pg.60
Facts:
-Real estate agent bonus case, focus is on the subsidiary promise necessarily implied (holds an offer open once performance has begun).
Rule/Take away:
– “An offeror may withdraw an offer at any time prior to acceptance unless the offer is supported by consideration.”
Sateriale v. R.J. Reynolds Tobacco Co. Pg. 66
Facts:
-Plaintiffs sue camel cigs for cancelling rewards program
Rule/Take away:
-Unilateral contract that invited performance of specific acts that was breached
-No mutuality of obligation (Mutuality is when both parties are relying on the other party to do something, this is NOT present in a unilateral contract)
Mutual Assent: Postponed Bargaining “Agreement to Agree”
