· Sources of K Law
o Elements:
§ Offer – promise to do something under certain conditions
§ Acceptance – accept on terms of offer (assent)
· Must be definite and timely
§ Consideration (only recognized in CL)– expectancy interest enforced when party who receives promise gives something in return
· “Nudem pactum” – naked promise; not usually enforceable
§ Specific Performance
· Court order to carry out the promise that was made
o Usually only used for breach of contract to covey land
· Intent to K
· Mutual Assent
o Lucy v. Zehmer (1)- A person’s outward expression of an intent to be bound to a K will be conclusive evidence of that intent rather than any secret or any unexpressed intent
§ Statute of Frauds: requires that in most cases a contract must be in writing, signed by the party, to be charged before it can be enforced
§ Courts consider objective evidence, not the party’s subjective intent to determine the validity of the K
· Prevents someone from asserting he accepted offer that he didn’t really mean to accept
§ Since land, Specific performance was ordered
o Stepp v. Freeman (10):Relational K – K established among a group of people which binds them according to the practices of the group and creates certain obligations and entitlements according to that promise
§ 3 types of enforceable Ks:
· Express K
· Implied K: K implied in fact – all parties perform as if there were an express K in effect
o Parties’ meeting of the minds is shown by the surrounding circumstances, including conduct and declarations of the parties that make it inferable that the K exists as a matter of tacit understanding
§ Reasonable 3rd party viewing all the circumstances of the parties’ behavior would conclude that there was a tacit understanding between them
· Quasi-K (Implied in Law): Neither type of K actually exists, but it would be inequitable not to enforce a party’s expectations
o Promisee relies to his detriment on promisor’s promise (promisee changes his course of conduct in a costly way)
o Promisorry estopped from denial of promise, and promise is enforced (usually through damages)
· Offer
o Preliminary Negotiations
o PFT Roberson, Inc. v. Volvo Trucks.(17) – Court used objective test to determine that since there was not a full and complete contract signed by both sides as was originally specified, and since Volvo could only be bound by the final agreement, smaller agreements were not binding. If it is clear that the two parties had not made agreements (emails said it was unresolved), then there is not a contract
§ Objective test considerations to determine if there was an offer: Course and substance of negotiations; prior dealings/course of dealing; customary practice and trade/business; entirety and completeness of documents to conclude negotiations
§ Usage of Trade: if it is customary in an industry to work out problems completely in one contract and the parties had not done that, it can not be interpreted to be a complete contract
§ Contracts need to be clear and predictable
o Solicitations
o Lefkowitz v. Greater Minneapolis Surplus Store, Inc. (22) – Rule for offer: where the offer is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the K [Williston]
§ Unilateral Agreement: offeror may withdraw offer anytime up until the offeree actually performs or in some way accepts that offer
o UCC Section 2-205. Firm offer: Offer that the offeror cannot withdraw until the expiration of a period of which the offeror has set or until a c
ch recognizes the existence of such a K
· (2): K can be found even if moment of its making is undetermined
· (3): even though one or more terms are left open, K for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy
§ 2-206: Unless indicated, an offer to buy is accepted by shipping conforming goods, but if non-conforming goods, not acceptance if seller notifies that it is only an accommodation to the buyer
· (2) where the beginning of a requested performance is a reasonable mode of acceptance an offeror who is not notified of acceptance within a reasonable time may treat the offer as having lapsed
§ 2-207: definite and seasonable expression of acceptance or written confirmation is acceptance even if additional terms unless acceptance is expressly made conditional on assent of additional terms
· (2): Additional Terms construed as proposals for new terms unless:
o offer expressly limits acceptance to terms of the offer
o they materially alter it; or
o objection to terms is given within a reasonable time
· (3): conduct of the parties recognizing K is sufficient to establish a K even if parties do not otherwise establish K. Consists of agreed upon terms with supplementary terms incorporated under provisions of act
§ 2-602: gives buyer the right to inspect before accepting
§ 2-606: Goods delivered comply with contract
