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Contracts
St. Louis University School of Law
Bodie, Matthew T.

prof. Bodie
contracts 1
fall 2013
 
 
 
 
 
Definitions
1.      DEFINITIONS:
2.      Restatement (Second) of Contracts, §§ 1-5 [Supp. 21-23].
a.       §1:  Contract Defined
                                                              i.      K = legally enforceable promise
b.      §2:  Promise; Promisor; Promisee; Beneficiary
                                                              i.      Promise = manifestation of intention to act/omit
c.       §3:  Agreement Defined; Bargained Defined
                                                              i.      Agreement = manifestation of mutual assent of 2 or more parties
                                                            ii.      Bargain: agreement to exchange promises/performances
§4:  How a Promise May be Made
                                                               i.      Promise can be express or inferred
§5:  Terms of Promise, Agreement or Contract
                                                               i.      A term of a promise or agreement relates to a particular matter
                                                              ii.      A term of a K is portion of legal relations resulting from promise which relates to a particular matter
Uniform Commercial Code (UCC) §§ 1-201(b)(3) & (b)(12) [Supp. 158-59] 1-201(b)(3)
                                                               i.      Agreement = bargain of the parties in fact found in language or inferred from circumstances
1-201(b)(12)
                                                               i.      “Contract” = total legal obligation resulting from the parties’ agreement
UCC §§ 2-102, 2-104, 2-105, 2-106 [Supp. 169, 170-72].
                                                               i.      UCC trumps common law, it must be used when applicable
§2-102 Scope
                                                              i.       UCC only Applies to transactions in goods
§2-104 Scope
                                                              i.      Merchant = person who deals in goods of the kind or hold himself out as having knowledge/skill particular to the goods involved
                                                            ii.      Between Merchants = both parties chargeable with the knowledge/skill of merchants
§2-105 definitions
                                                              i.      Goods = things which are movable
                                                            ii.      Goods must exist before they are sold
                                                          iii.      There may be a sale of a part interest in existing indentified goods
§2-106 Definitions:
                                                              i.      “K” and “agreement” limited to present or future sale of goods. “K for sale” includes present sale and K to sell goods in future. “Sale” = passing of title for a price. “present sale” = sale accomplished by making a K
                                                            ii.      “Conforming to K” = in accordance with the obligations under the K
                                                          iii.      “Termination” = either party puts an end to the K otherwise than for its breach. Obligations are discharged but rights based on prior breach survive
                                                          iv.      “Cancellation” = either party puts end to K for breach by other. Effect same as termination except canceling party retains remedy for breach of the whole K or any unperformed balance
 
Consideration and Alternative Bases for Liability
1.      Consideration
a.      Something of value promised or performed
                                                              i.      Each party has to provide a benefit or suffer a detriment
2.      Bargained-for Exchange and Gratuitous Promises
a.      performance or return promise must be bargained for to constitute consideration §71
                                                              i.      performance/return promise is “bargained for” if sought by promisor in exchange for his promise and given by promisee §71
b.      Gratuitous promise (promise to do something without requiring consideration in return) is not enforceable.
                                                              i.      Kirksey v. Kirksey
c.       Requirement of a bargain § 17
                                                             i.      Formation of K requires:
1.      a Manifestation of mutual assent in a bargain and
2.      Consideration
d.      Forbearance on the part of a promise is sufficient consideration
                                                              i.      Hamer v. Sidway (K) kid promises not to drink, smoke or gamble
                                                            ii.      Langer v. Superior Steel Corp. (K) P refrains from working for competitor
e.       Past consideration is no consideration
                                                              i.      Mills v. Wyman (NK) D promised to pay P’s expenses for caring for son after son died
f.       Desire of the parties to include consideration in the agreement will not substitute for actual consideration
                                                              i.      In re Greene (NK) mistress gave D $1 in exch

unt of what was promised or do you just reimburse them for the injury they incurred by relying on the promise?
b.      Ricketts v. Scothorn (1898) (K) grandpa gives P money and tells her she wont have to work anymore
                                                              i.      A promise can be enforced even though it was given without consideration if the promisee has reasonably relied on the promise to her detriment
c.       Restatement § 90 [Supp. 66-68]                                                               i.      A promise the promisor should reasonably expect to induce action/forbearance and which does induce action/forbearance is binding if injustice can only be avoided by enforcement. The remedy will be limited as justice requires
d.      Feinberg v. Pfeiffer Co. (1959) (K) job gives P $200 a month for rest of life for her past consideration.
                                                              i.      A gratuitous promise is enforceable if the promisee justifiably relies on the promise
e.       Maryland National Bank v. United Jewish Federation (1979) (NK) charity unreasonably spends money before it gets it.
                                                              i.      If you do not reasonably rely on a promise, you cannot claim PE.
f.       Alaska Airlines, Inc. v. Stephenson (1954) (K) D tells P they will hire him if they get their certificate, he quits his current job, and moves to Alaska. All those things happen but D doesn’t hire P.
                                                              i.      A promise which is reasonably expected to induce an employee to remain with the company, and which does induce the employee to remain is valid
g.      Grouse v. Group Health Plan, Inc. (1981) 606 (K) D promised to hire P as an at-will employee. P quits job. D doesn’t hire P.
                                                              i.      illusory promise (to be given a “good faith opportunity” to perform) can still be enforceable where the promisor should reasonably expect to induce action on the part of the promisee and which does induce such action if injustice can be avoided only be enforcement of the promise.