Select Page

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

Contracts Bodie Fall 2017

UCC applies to the sale of moveable goods (not just merchants)

Common Law Restatement applies to everything else

What is a contract?

Promise (does not require consideration) or set of promises (would require consideration) in which the court has created legal ramification for breech or which the law in some way recognizes as a duty

Often defined as a “bargained for exchange”

K =

Consideration
Manifestation of mutual assent

Bilateral Contract

An offer seeks a promise in return, not a performance

Unilateral

An offer seeks a performance in return, not a promise

3 main sources of K rules

Common law (largest, contains binding precedent)
Restatement of contracts – merely persuasive but still useful
UCC Article 2à only applies to merchants dealing with the sale of moveable goods

Void

Children
Physical compulsion (§174)
So intoxicated that you were completely unable to understand K

Actions that will get you into court

Breach
Promissory Estoppel – P relied on a promise and needs the court to force D to follow through on their promise (not what the actual damages would be though)
Restitution – D is unjustly enriched because P gave them something, and P needs to court to have D pay them back

MUTUAL ASSENT

Mutual Assent Overview

Restatement §18 §21, §22

§18 Mutual Assent requires that each party EITHER makes a promise OR begin/render performance
§19 Can be in writing, spoken words, acts, or failure to act
§21 Doesn’t matter if a party does not intend the promise to be legally binding,

neither party has to actually manifest the assent, but the manifestation of lack of consent will prevent the formation of K

§22 Offer + Acceptance = K

Mutual Assent Cases

Embry v. Hargadine

Hargadine employee demands a new contract at the height of the busy season, boss says “fine, get back to work.” Court finds that statement, as viewed by an objective observer would be taken for a promise of a new contract
Agreements must be judged from an outside, objective perspective

Lucy v. Zehmer

Man agrees to sell his property over a few drinks with a friend, supposedly as a joke, friend sues to hold him to the agreement
Court finds there were outward facts to show Zehmer was joking
We must look at the outward expression of a person manifesting his intention

Court won’t consider secret and unexpressed intention

OFFER/ACCEPTANCE

Offer Overview

What is an offer?

Shows the offeror is willing to enter into a contract

Restatement §26

Offeree knows his acceptance is needed to conclude the bargain

Manifestation of willingness that justifies and invites acceptance
On specified terms

Restatement §28 – rules for auctions
Restatement §32 – in ambiguous agreements, acceptance by promise or performance is acceptable

Such that offeree need only accept in order to form a contract

Restatement §30

May invite acceptance by words, performance, or refraining from perform a specified act
Unless otherwise indicated, an offer invites acceptance in any manner and by any medium reasonable in the circumstances

Must sufficiently identify the intended offeree

Can be one person, class of persons, of even the general public AS LONG AS the terms are sufficiently definite and the offeree is clearly identified
Advertisements are generally never offers unless there is a statement of “first come, first serve” (Lefkowitz)

In determining whether an offer has been made, consider:

Relationship between the parties
Prior practices

t is for “first come, first serve,” then such an ad is considered a unilateral offer

It specifies one particular person (the 1st person)

Consolidated Freightways v. Williams

A company offered a $5k regard to any of its employees for information leading to the apprehension of a thief in their warehouse. D was a supervisor there and provided such information, and P did not pay
He performed the specific action requested by the ad

Motivation for doing so was irrelevant
Dismissed counter-claims that the reporting was part of his job anyways (a preexisting duty)

The offer could not be limited to only a certain class of employees if that intent was not directly states

Leonard v. Pepisco

Young man tries to find loophole in Pepsi marketing campaign to buy a Harrier Jet
Court easily dismisses, due to the objective obviousness of the joke, the fact that the jet did not actually appear in the Pepsi points catalogue
Also, it was an ad not an offer
Also, he did not complete the proper method of acceptance

Harris v. Time

Boy receives junk mail promising a “free” calculator watch, his father heads up a class action suit to recover
Court held that actually

The unopened letter constituted a unilateral offer
By opening the letter, Harris provided consideration, since that is the “name of the game” for direct mail advertising, and therefore there was a valid K. However, the court threw the claim out on a “de minis” rationale, since there were no actual damages