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St. Louis University School of Law
Grinvald, Leah Chan

Contracts I
Professor Grinvald
Fall 2012
I.                 What is a Contract?
–          An exchange between parties that is legally enforceable
II.            Various Perspectives
–          Formalist (objective)
–          Realist (contextual)
–          Economic (efficiency)
–          Relational (preserve relationships)
–          Critical Legal Studies (subjective)
III.        Parties’ Intentions
–         Allen v. Bissinger & Co.
Facts: π purchased ICC report from Δ but was shocked to learn how many pages report consisted of. Δ attempted to cancel order and was charged for report pages already printed.
Issues: Was there an agreement between the two parties to sell and buy the report?
Holding: Yes, there was a mutual agreement to the report and therefore a binding contract.
Analysis: Parties’ intentions are judged by their “outward expressions” and disregards “unexpressed” intentions.
Conclusion: Δ required to pay full amount
IV.        Price Terms
–         Feldman v. Google, Inc.
Facts: π entered an agreement with Google and violated contract. Google wanted to transfer to California
Issues: Was there a “Meeting of the Minds”? If yes, was the price term definite enough to create an enforceable contract?
Holding: π had reasonable notice of the terms and was therefore bound by agreement.
Also, Contract had a sufficiently definite process by which price would be determined.
Analysis: Contracts must include a price term in order to be enforceable, but the price does not need to be a fixed amount; it can just be a process by which to determine the amount.
π was required to agree to the clickwrap contract by clicking “yes” and therefore should have been aware of the terms.
V.             Mutual Assent
–          Restatement (Second) Contracts §17
The formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.
–         Ray v. Eurice & Bros.
Facts: Complicated fact pattern concerning building of house and specifications to which house was to be built.
Issues: Did both parties agree to the contract?
Holding (Rules): “Absent fraud, duress or mutual mistake, that one having the capacity to understand a written document who reads and signs it, or, without reading or having it read to him, signs it, is bound by his signature in law.”
“The test of a true interpretation of an offer or acceptance is not what the party making it thought it meant or intended it to mean, but what a reasonable person in the position of the parties would have thought it meant.”
Remedy Rule – Put the wronged party in the same position that he would have been in if the contract had been performed.
Analysis: Signing a contract = acceptance, Eurice Bros signed and are therefore bound.
VI.        Offer and Acceptance (Bilateral Contracts)
–          Process
1.      Offeror makes an “offer”
2.      Creates “Power of Acceptance” in the offeree
3.      Offeree can
(a). Accept (within the offer’s timeframe)
(b). Counter-offer (becoming offeror; see above)
(c). Reject
(d). Do Nothing
–          Restatement (Second) Contracts §24
An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.
–          Restatement (Second) Contracts §36
1.      An offeree’s Power of Acceptance may be terminated by
(a). rejection or counter-offer by the offeree
(b). lapse of time
(c). revocation by offeror
(d). death or incapacity of the offeror or offeree
2.      In addition, an offeree’s

·         A qualified or conditional acceptance is a counteroffer and a rejection of the buyer’s offer
·         Option Contract: Restatement (Second) Contracts §25 An Option is a contract by which the owner agrees to give another the exclusive right to buy property at a fixed price within a specified time
a.      Need Consideration AND language to promise or agree that the counteroffer would be open for a specified period of time.
·         Restatement (Second) Contracts §42: A counteroffer is freely revocable at any time before it has been accepted.
·         Restatement (Second) Contracts §43: Notice of the revocation must be communicated in order for it to be effective – notice does not need to be from the offeror herself, it just needs to be reliable.
Analysis: Miller made a counteroffer when he changed the terms contained in the original offer. There was no option because there was no language to promise offer to Normile exclusively. Revocation of counteroffer was effective because of sale to 3rd party. Byer (agent of Miller) was a reliable source.
VII.    Offer and Acceptance (Unilateral Contracts)
–          Bilateral v. Unilateral Contracts
–          Bilateral Contract = exchange of promises for future conduct. At execution of contract, there is both a promisor and a promisee.
–          Unilateral Contract = exchange of one promise for future conduct (promisor) for acceptance by conduct. At execution of contract, there is only a promisor.