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South Texas College of Law Houston
Powers, Jean Fleming

I. What is a contract?
a. A Promise that the law will enforce
b. Law won’t enforce:
i. Promises for gifts
ii. Against public policy (illegal)
iii. Illusory promises (promisor’s future is not bound by the statement – I promise to sell it to you if I want to.)
1. if you limit your future though, (If I buy the car, I’ll loan it to you) could be an enforceable promise
2. If the promisor has alternatives, it’s not necessarily illusory (If I buy the car, I’ll loan it to you or your cousin)
c. Bilateral contract
i. Promise exchanged for a promise
ii. I promise to give you my car if you promise to pay me $500.
d. Unilateral contract
i. Only a promise on once side, that promise is answered by an act or a forbearance to act (if you do not do something), not a promise to perform.
ii. I’ll pay you 10 if you mow my lawn.
e. UCC
i. If the contract involves a transaction in goods the UCC is the governing principal
ii. If not involving goods, it’s the common law
iii. Art. II(a) – transactions of leases of goods
II. When does the contract begin?
a. When there is a definite and clear offer, a contract comes into existence
b. If a manifestation has been made (handshake, signature) and the offer has been accepted, it is too late for one party unilaterally to change the agreement w/o the agreement of the other
i. This rule is always broken for some reason.
III. Offer
a. Intentional statement by the offeror that creates in the mind of the offeree the reasonable expectation that the offeror intended to get into a contract.
b. Things that don’t intend offers bound by contractual liability
i. Social situations (I’ll offer to make dinner tomorrow night)
ii. Marital situation (promises to take out the trash, etc)
1. if they enter into some kind of commercial venture, they can enforce the thing
iii. Gentlemen’s agreement
1. Even in a commercial situation, promisor and promise can Agree that promises have no legal enforceability
iv. Opinions
1. Don’t usually make contracts
2. Dr. says “You should be well in no time.”
c. Offer must be definite enough that we know what the contract is about
i. UCC 2-204 test if an offer is sufficiently definite
1. Did the parties intend to have a contract?
2. If yes, can the court fashion a remedy?
3. UCC allows gap filling for elliptical promises in commerce
a. Ex. if the K leaves out price, reasonable price is put in
b. If the place of delivery is left out, Seller’s place of delivery is assumed
c. If time is left out, reasonable time is presumed
4. Construction terms
a. Usage of trade
i. §1-205 Custom w/in the industry
ii. Determine how to fix contracts based on how other people do it in industry
b. Course of dealing
i. If parties dealt In the past – history then forms the course of dealing – base issue of contract on that dealing.
c. Course of performance
i. §2-208 – what parties do in performing this one K
ii. Especially used in installment K’s
iii. This was called practical construction at common law
iv. Even if the course of performance deviate from the express K, they can trump the terms of the K
ii. Preliminary Negotiations
1. Don’t want to create legal liability in negotiations
2. Courts are loath to let people out of contrats but are slow to admit they are in contracts
iii. Advertisements
1. Mere solicitations for K’s and tough to enforce
2. Usually there is too much to be negotiated
3. Usually, the Buyer makes the offer
4. They can, however, be contracts in a first come first serve issues so long as a price and quantity is also listed (the black stoal)
iv. If parties agree on K but havn’t actually signed the K?
1. Look at intent and factors like were the parties supposed to perform prior to signing the contract?
a. If so, the courts

e that the offer has been revoked.
2. The courts allow this except in the case of an option contract
3. Once revoked, the acceptance power is gone.
4. Extra consideration
a. If a separate consideration has been given to hold the offer open for a specific period of time this is now called and Option contract
i. A separate consideration or payment has been given to keep the offer open for an extended period of time.
ii. During that time, the offer is not revocable.
5. §2-205 Firm offer rule
a. If a merchant has made a signed statement that the offer will be held open, it is not revocable for as long as the statement says, but never longer than 3 months.
6. Unilateral contract
a. Famous Brooklyn Bridge Hypo
i. If I offer you $1000 to walk across the Brooklyn bridge, you get half way across and you revoke?
ii. §45 of R1K says NO – once the oferee begins performance, the offeror’s power of revocation is gone for a reasonable time to see if full performance will be achieved.
7. Reliance on the offer
a. Can keep it from being revocable
b. Any time there is foreseeable detrimental reliance on an offer, the doctrine of promissory estoppel makes the offer binding.
c. Estoppel is a legal gag
i. You can’t bring anything up in a legal context
ii. The promissory is estopped from backing out of the offer
d. This happens in contracting and sub-contracting issues.
8. Stated time of Offer
a. If the offer is to remain open for an agreed time, it remains open for that reasonable time
If time is n