Types of Contracts:
1. Express contract: formed by language, oral or written
2. Implied in Fact: contract which is formed through the manifestations of assent seen in conduct, context, situation, custom/trade usage; treated as express contracts;
3. Implied in Law:
a. Quasi-contract: not contracts; legal fiction created by courts to avoid unjust enrichment;
4. Void: contract is seen as never having been created
5. Voidable: a contract in which one party can get out of;
Types of Contracts as to Acceptance:
1. Bilateral contract: exchange of mutual promises
a. Consisting of the exchange of mutual promises in which each party is both a promisor and a promise; each party is a promisor and a promisee;
2. Unilateral contract: acceptance by performance
a. Contract in which the offer requested performance rather than a promise; offeror-promisor would promise to pay upon the completion of the requested act by the promise; contract formed when the act is performed; one party is a promisor and one is a promisee;
3. Test: At the time the contract is formed, each party has a right and a duty (bilateral) or one party only has a right and the other party only has a duty (unilateral)
4. Unilateral v. Bilateral:
a. Acceptance of unilateral is manifested by performance. After offeree has fully performed, only the offeror is obligated to perform because offeree’s performance is complete.
b. Acceptance of bilateral is manifested by return promise. As soon as return promise is made, both parties are bound by the contract and are obligated to perform as promised. (Russell)
5. Modern View:
a. Acceptance by promise or start of performance
b. Unilateral contracts are limited to two circumstances
i. Where offeror clearly indicates that completion of performance is the only manner of acceptance
ii. Where there is an offer to the public (reward) which so clearly contemplates acceptance by performance rather than a promise that only the performance requested in the offer will manifest acceptance
– If you are representing a client, you want to find contract under bargain because they will be entitled to the most complete remedy.
– If bargain contract, then client receives everything promised in contract.
– Where promissory estoppel is used, the damages awarded are generally limited to those necessary to prevent injustice. This will usually mean that the plaintiff receives reliance damages, rather than the greater expectation measure. Through his recover, P is placed in the position he would have been in had the promise never been made.
– General v. Specific Performance:
o General Performance: dealing with non-unique subject matter (i.e. money)
o Specific Performance: when subject matter of the contract is rare or unique(i.e. people)
1. General Rule: Gifts or gratuities cannot be enforced under bargain contract, except where reliance is reasonable, foreseeable, done in good faith, causes a detrimental, or as it pertains to certain institutions, including churches or universities.
a. No expectation of repayment
b. Non-market driven
c. No mutuality of Obligation/Consideration
3. Kirksey v. Kirksey:
a. Issue: Whether D’s letter was an enforceable contract?
b. Holding: No, Court held that both parties were not bound, therefore neither party was bound. Sufficient consideration (mutuality): that something that motivates us to contract; if you find sufficient consideration, then mutuality; Sufficient particularity: definiteness of language; no timeframe specified;
4. Promise to make a gift: (bargain v. conditioned gift
a. General Rule: Promises to make a gift are generally unenforceable because they lack the bargain-for element of consideration. Altruistic pleasure or love and affection are not sufficient to constitute a bargain. An executed gift cannot be rescinded for lack of consideration.
i. Exception: I
of agents act and approves of it (ratifies) or
b. Principal causes another to rely on agents authority
1. Rule: If the parties’ actions and decisions are accepted and ratified by the authority, then the party is an agent. If agent binds authority in this manner, then authority is bound to other party (mutuality).
iii. Konic v. Spokane
1. Employee was not authorized to make a purchase of that magnitude. When employer returned, he did not ratify the purchase, but instead, disaffirms.
iv. Embry v. McKittrick/Maytag
v. US Steelworkers v. US Steel
3. General Example:
i. Issue: Whether the contract is enforceable?
ii. Holding: The Court held that the contract was enforceable because:
1. The wife had the authority to bind husband because he came back and ratified her decisions showing that he intended her to have this power of acceptance.
2. The mistake on the part of D was unilateral and P had no knowledge of this misunderstanding. If they lacked understanding, they should have refrained from signing the agreement.
3. Language was sufficiently particular.
4. Each party can sue the other conclusively showing mutuality.