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Contracts
St. Johns University School of Law
Kniffen, Margaret N.

ntracts I – Kniffen*

Policy

Judicial economy – Courts only decide what they have to decide to bring about a just outcome to the case. They do not go out on the limb.

Judicial efficiency – To sue the party that was actually contracted with first and sue others only if the plaintiff has exhausted their remedy against this person.           

Contracts survive the death of either party; if you really want something make it K not a gift!

Conditional gratuitous gift – gift promise that you have to do something for is not a bargained for exchange so no consideration
I.e. In making a gift to a homeless person, if you say, “You have to come with me to get measurements.”

Subtle quote about Ks:
“There being evidence that value passed from each party to another…even if the main contract is never made, tender of the letter of intent conferred a bargained for benefit, which was valid consideration, for a return promise to negotiate in good faith.”

Note: When there is no K, always ask: Is there valid grounds for promissory estoppel?

Two Types of Ks:
Bilateral – Both promises outstanding
Unilateral – One promise outstanding on the offeror’s side
A. Rewards contracts are almost always unilateral K, they are asking for performance (capturing the criminal) not a promise (to capture).
Note: If a criminal is captured and returned without person knowing about the rewards, there is no bargained for exchange (no consideration), therefore person cannot collect reward.

MINORITY View: Court changes the time frame
Forging doctrine – To make (forge) something out of nothing. “By this view a binding (enforceable) unilateral contract is forged out of a former, invalid (unenforceable) bilateral contract.”
In other words: When there is no bilateral contract, the court will pretend there is a unilateral contract by pretending that the offeror bargained for later performance.
Step 1: We do not have a valid bilateral contract
Step 2: Court can form a forged (fictitious) unilateral contract
(Courts pretend such things were given in exchange for promise)
*On an exam: If facts show there was no bilateral, but one side received a benefit.
Write: There was no bilateral contract and no bargained for exchange, but a few courts expressing the minority view might apply the forging doctrine to try and make a fictitious claim of a possible unilateral contract.

Courts can imply terms of how much effort a person can make into the contract:
Best efforts
Reasonable efforts
Good faith, honest efforts

Two terms:
Implied in law
Implied in fact

Case example: Wood v. Lady Duff-Gordon – Parties clearly intended to imply in fact. Facts at the time of contracting show parties really agreed, although they di

Note 2: Leaving something as significant as the price out raises questions about whether the parties intended to be bound. However, if the agreement provides for making its terms sufficiently definite by the time the performance is called for, this is enough to satisfy definite.
(If courts find the parties intended to be part of a K, the court can determine contract price if the parties can’t agree – this is common law, remember this can apply with UCC also)
Note 3: A party who has performed under an agreement that is unenforceable for indefiniteness is entitled to restitution.

Any of the above missing and there is no contract!

Other exceptions that will make a contract non-enforceable*
1. When a person waited too long to sue, statute of limitations have run.
2. Excused by bankruptcy.
3. Infancy – applies to anyone under the age of majority. Someone who is underage can disaffirm a contract. The infant only has to give back what he/she has. However, on the other hand, and adult must give back full consideration
A. They may disavow up to a reasonable time after they become an adult. (Policy: Wisdom cannot be gained all at once)