Contracts Outline

Cimino Contracts Outline Fall 2015

Grading Rubric

Issue

What must be decided in order to know whether the PAT was offered as a gift or to induce a return promise or performance? Be precise and direct (“The issue here is whether…. “);
Use terms of art/avoid substituting synonyms for terms of art (for example, “bargained-for-exchange” and “gratuitous promise” are both terms of art – use those terms, not synonyms)

Rule

Be direct; use terms of art.
There is no need to “explain” the rule. Instead, state it: “The rule that applies [to the issue] is…”

Analysis

Analysis is not “advocacy”: support your analysis with authority (precedents include cases and hypos we did in class), not adverbs (i.e., no “clearly”)
Analogize and distinguish relevant facts in the problem from those in the precedents given the rule and the issue. You must “show this work” – you cannot be conclusory or you will not earn these points.
What is the weakest point in your analysis (is there a good counterargument to your analysis)? What is it? Why is that point ultimately incorrect/less persuasive?
Avoid first person (“we can see here that….”)
Avoid “legalese” (“said gift” or )

Conclusion

Can’t say “maybe” or “it depends.” Choose the answer (BFE or gift) that you think is most likely correct.

Promisee: (Keep) Party that is trying to enforce the agreement (The party filing suit)

Promisor: (ignore) Party that is trying to walk away from the agreement arguing that it was not a binding K (The party being sued)

Rules:

Mutual Assent

The rule that applies [to the issue] is a two prong test evaluated from the promisee’s perspective (the one who is trying to enforce the contract). The first is an objective prong that looks to outward manifestations to determine whether a reasonable person in the promisee’s position believed the promisor intended to be bound. The second is a subjective prong that asks if the promisee actually believed that the promisor intended to be bound. See Lucy v. Zehmer.

Offer

An offer is a manifestation of willingness to enter into a bargain so as to justify the other party that his or her assent is invited and will conclude the bargain. R2K 24. To make an offer, an offeror must express fixed purpose to make a definite offer. Lonergan. Additionally, definite offers must have terms that are reasonably certain. R2K 33, Varney.

Acceptance
Deficient Agreements
Consideration
Promissory Estoppel
Some Defenses
Interpretation of Written Terms

Traditional:

Modern: Unlike the traditional approach that looks only to “plain language” in a contract to interpret a term’s meaning, the modern approach, believing that words are “the skin of living thoughts,” considers “the meaning of the terms in light of all the circumstances” to give effect to the mutual intent of the parties. R2K § 212.

Implied Terms
The Parol Evidence Rule
Conditions: Strict Compliance
Anticipatory Repudiation
Breach
Remedies

Part I: Formation of an Enforceable Contract

Topic 1: Mutual Assent

· What are we doing here? Casebook pp. 31-35

Mutual Assent: Always evaluate from the promisee’s perspective (the one who is trying to enforce the K)

Two Prong Test:

1) Objective: Would a reasonable person in the promisee’s position believe promisor intended to be bound? (only outward manifestations matter)

2) Subjective: Did the promisee actually believe promisor intended to be bound? (Promisee MUST believe that the promisor intended to be bound.)

· “But I didn’t mean to enter a contract!” (Or, “The Objective Theory of K Formation”): 41-53; 63-66 (Lucy, Gleason)

1. Lucy v. Zehmer (p. 40)

Issue: Was there mutual assent?
Rule: 2 prong test: Objective/Subjective from the promisee’s (Lucy’s) perspective

Factors to help determine when parties intend to be bound:

language of agreement, context of negotiation, existence of open terms, partial performance, the custom in this kind of transaction

R2K 17 Bargained for exchange

Relevant Facts: Lucy (P) and Zehmer (D) negotiate for Zehmer’s farm in a bar when they’ve been drinking. Lucy offers $50,000. Zehmer thinks it’s a joke but plays along–writes on the back of a receipt and gets his wife to sign it. Lucy grabs the receipt and puts $5 on the table as a down payment. Lucy moved forward and got a lawyer for the title and got his brother to go in with him for financing. Lucy sues Zehmer for specific performance.
Court’s analysis: The meeting of the minds (mutual assent) element of contract formation was met by Zehmer’s actions which would lead a reasonable person and did lead Lucy to believe that Z was sincere even though Z was joking; therefore the contract between them was valid.

Objective: Whether a reasonable person in Lucy’s shoes would have thought that Zehmer intended to be bound.

Zehmer outwardly manifested intent to be bound; acted as if he was serious

redrafted the K and had his wife sign it
prolonged negotiations

Sub