CONTRACTS: Professor KETTLE
Terms (see terms sheet as well):
1.) Contract- legally enforceable agreements
2.) Quasi-contract- equitable remedy (not governed by formal K law, it is governed by equity)
3.) Unilateral K- a contract that results from an offer that requires performance to accept.
a. Two hypotheticals frequently used.
i. Contest hypo. You can only receive the reward if you perform. You can only perform if you know about the offer.
ii. Reward hypo.
b. An option contract is formed when you begin performance such that you cannot revoke the offer while performance is being rendered.
4.) Bilateral K- a contract that results from an offer that is open as to how it can to be accepted.
I What is the Applicable Law:
a) Common law (reflected in the restatement second of contracts).
b) UCC Article 2
i) It is common law unless it is a sale of goods, then it is the UCC Article 2.
II Formation of Contracts:
Do you have an agreement? What do you need?
a) Offer- a manifestation of commitment
i) Manifestation (Need a Meeting of the minds. MOM)
(1) You look at words
(2) You look at actions
(a) DON’T LOOK AT WHAT WAS IN THE HEAD OR THE HEART!!!! An oral K is as good as the paper it is written on.
iii) Pitfalls…stuff that professors love to test on
(1) Advertisements are not offers. When you give your money to a store clerk in a store you then have an offer, not when you see a price in the paper.
(2) Missing price term- can you be legally obligated without knowing how much you need to pay? No. YOU MUST INCLUDE ALL MATERIAL TERMS TO CONSTITUTE AN OFFER UNDER THE COMMON LAW. PRICE IS A MATERIAL ITEM. Under the UCC Article 2 this is okay. You can have a missing price and it can be an offer.
(3) Vague or ambiguous material term- under the common law and the UCC, you cannot have a vague or ambiguous material term and have it be considered an offer.
(4) A Requiremance K- measures the quantity of goods to be purchased by how much the buyer needs (UCC 2-306).
(a) It is okay to express quantity in terms of buyer’s requiremance. THIS IS NOT CONSIDDERED A VAGUE OR AMBIGUOUS MATERIAL TERM WHICH NEGATES AN OFFER.
(b) Unreasonably disproportionate test- if a buyer under a requiremance K wants to increase the stuff he buys, he cannot increase it unless it is reasonable.
(5) Output K- you agree to sell all that you produce (like the breadcrumbs case)
iv) Termination of offers
(1) Termination of an offer means that the offer is gone and it cannot come back. IT IS DEAD FOREVER.
(2) How it happens. . .
(a) Lapse of time- if there is a time stated and the time lapses the offer is dead. If no statement than it is open only for a reasonable time.
(b) Death of either party befo
estion, not make a counter offer.
a. Example- “I’m still thinking but if you lower the price I can give you an answer now.”
(ii) Conditional acceptance- “I accept if…” means that I reject.
(iii) Adding additional terms means that you reject the offer.
(iv) HOWEVER- A grumbling acceptance is considered acceptance.
1. The Common Law rule- Mirror Image Rule- acceptance needs to look like the offer. If your acceptance contains any other additional terms, you didn’t agree to the original offer and you reject the offer.
UCC Article 2-207- The Battle of the Forms- It is possible to add terms in the acceptance of a sale of goods? Is the acceptance merely adding new stuff or is it insisting on the new stuff? If the offeree is adding terms, it is okay. If there is an insistence on the new terms it is not okay. “Seasonable perception of acceptance”- The acceptance can add new terms. What is the deal? Which of the two, the offer or the acceptance is the real deal? WHETHER THE NEW TERMS MATERIALLY CHANGE THE DEAL IS THE DETERMINING FACTOR. THE ADDITIONAL TERMS WILL ENTER INTO THE K. IF THE NEW TERMS CHANGE THE MATERIAL TERMS, THEY ARE STRIKEN AND YOU HAVE ACCEPTED THE INITIAL OFFER.