GRINVALD—CONTRACTS I—FALL 2012
RULES
Ø Restatement (Second) §17: REQUIREMENT OF A BARGAIN
“…formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration”
i. Elements:
1. A bargain (i.e. an exchange)
2. Manifested MUTUAL ASSENT
3. Consideration
ü RAY V EURICE & BROTHERS
Ø Restatement (Second) §24: OFFER DEFINED
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.
i) Elements:
(1) Manifestation of
(2) Willingness to enter into a bargain
(3) To justify another person in understanding
(4) That his assent to that bargain is invited
(5) And will conclude it
ü IZADI V MACHADO
Ø Restatement (Second) §36: METHODS OF TERMINATION OF POWER OF ACCEPTANCE
(a) An offeree’s power of acceptance may be terminated by
(i) Rejection or counter-offer by the offeree, or
(ii) Lapse of time, or
(iii) Revocation by the offeror, or
(iv) Death or incapacity of the offeror or offeree
(b) In addition, an offeree’s power of acceptance may be terminated by the non-occurrence of any condition of acceptance under the terms of the offer (offeree didn’t abide by a condition of the offer)
ü NORMILE V MILLER
ü PETTERSON V PATTBERG
Ø Restatement (Second) §26: PRELIMINARY NEGOTIATIONS
Manifestation of willingness to enter into a bargain is not an offer if the person whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
ü LONERGAN V SCOLNICK
Ø Restatement (Second) §42: REVOCATION BY COMMUNICATION
A counter-offer is freely revocable at any time before it has been accepted
ü NORMILE V. MILLER
ü PETTERSON V PATTBERG
Ø Restatement (Second) §43: INDIRECT COMMUNICATION OF REVOCATION:
An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect
ü NORMILE V. MILLER
Ø RESTATEMENT (SECOND) CONTRACTS 25: Option Contracts
An option contract is a promise which meet the requirements for the formation of a contract and limits the promisor’s power to revoke the offer
ü NORMILE V. MILLER
Ø Restatement (Second), §27: EXISTENCE OF CONTRACT WHEN WRITTEN MEMORIAL IS CONTEMPLATED
Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show that the agreements are preliminary negotiations.
ü WALKER V. KEITH
ü QUAKE V. AMERICAN AIRLINES
Ø Restatement (Second), §71: CONSIDERATION
(1) To constitute consideration, a performance or a return promise must be bargained for.
(2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise
(3) The performance may consist of
(a) An act other than a promise, or
(b) A forbearance, or
(c) The creation, modification, or destruction of a legal relation
(4) The performance of return promise may be given to the promisor or to some other person. It may be given by the promisee or by some other person.
ü HAMER v SIDWAY
ü PENNSY V. AMERICAN ASH
Ø Restatement (Second) §59: PURPORTED ACCEPTANCE OF ADDED QUALIFICATIONS
A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to or different from those offered is not an acceptance but is a counter-offer
ü PRINCESS CRUISE LINES V. GENERAL ELECTRIC
ü NORMILE V. MILLER
Ø Restatement (Second) §90: PROMISSORY ESTOPPEL
o A promise which the promisor reasonably expects to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice so requires.
o Elements:
a) A promise
b) Which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and
c) Which does induce such action or forbearance is biding
d) If injustice can be avoided only by enforcement of the promise
e) The remedy granted for breach may be limited as justice requires
ü HARVEY V. DOW
ü JAMES BAIRD CO v. GIMBEL BROS
ü DRENNAN v STAR PAVING CO
ü POPS CONE V. RESORTS INTERNATIONAL
Ø Restatement (Second) §110: STATUTE OF FRAUDS
1) The following classes of contracts are subject to a statute, commonly called the Statute of Frauds, forbidding enforcement UNLESS there is written memorandum or an applicable exception:
a) A contract of an executor or administrator to answer for a duty of his decedent (the executor-administrator provision)
b) A contract to answer for the answer for the duty of another (the suretyship provision)
c) A contract made upon consideration of marriage (the marriage provision)
d) A contract for the sale of an interest in land (the land contract provision)
e) A contract that is not to be performed within one year from the making thereof (the one-year provision)
Ø Restatement (Second) §139: STATUTE OF FRAUDS
(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce action or forbearance is enforceable notwithstanding the SOF if injustice can be avoided ONLY by enforcement of the promise
(2) Factors to consider whether injustice can be avoided only by enforcement of that promise
a) The availability and adequacy of other reme
c) Notification of objection to them has already been given or is given within a reasonable time after notice of them is received
(3) Conduct by both parties, which recognizes the existence of a contract, is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular CONTRACT CONSIST OF THOSE TERMS ON WHICH THE WRITINGS OF THE PARTIES AGREE, TOGETHER WITH ANY SUPPLEMENTARY TERMS INCORPORATED UNDER ANY OTHER PROVISIONS OF THIS ACT.
ü BROWN MACHINE V. HERCULES
ü PAUL GOTTLIEB & CO, INC v ALPS SOUTH CORP
UCC §2-201: STATUTE OF FRAUDS
(1) Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. A writing is not insufficient only because it omits or incorrectly states a term upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.
(2) Between merchants if within a reasonable time a writing confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents, it satisfies the requirements of subsection (1) against the party [recipient] unless written notice of objection to its contents is given with 10 days after it is received.
(3) A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable:
(a) If the goods are to be specially manufactured for the buyer and are not suitable for sale ot others in the ordinary course of the seller’s business and the seller, circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement; or
(b) If the party against whom enforcement is sought admits in his pleading, testimony or otherwise in court that a contract for sale was made, but the contract is not enforceable under this provision beyond the quantity of goods admitted
(c) A contract which does not satisfy the requirements of (1) but which is valid in other respects is enforceable: (c) with respect to goods for which payment has been made and accepted or which have been received and accepted
