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Contracts
St. Louis University School of Law
Gatter, Robert

Gatter Contracts 1 Fall 2017

Contract Formation

Mutual Assent:

§17 – Requirement of a Bargain

Except as stated in Subsection (2), the formation of a contract requires a bargain in which there is manifestation of mutual assent to the exchange and a consideration.
Whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under the rules stated §§82-94.

Objective is looking at conduct and not what was in their head

(Case: Ray v. William Bros. There was not a meeting of the minds under the construction contract with attachments. You must look objectively and what the conduct shows. Reasonable test, what a reasonable person would have thought the contract meant)

Offer and Acceptance—Bilateral Contracts:

§22 – Mode of Assent: Offer and Acceptance

The manifestation of mutual assent to an exchange ordinarily takes the form of an offer or proposal by one party followed by an acceptance by the other party or parties
A manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined.

§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 said bargain.

Case: Izadi v. Machado Ford. Ad said 3 k trade in value. P thought it was an offer, and it was because a reasonable person thought it would have meant, possible bait and switch tactic.

Different from Lonergane because more than one item for sale and terms were well states

§26 – Preliminary Negotiations

A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude the bargain until he has made a further manifestation of assent.

Case: Lonergan v. Scolnick. Ad to sell house. Need some sort of option or intent to buy, as in discussing essential terms. Terms were not certain

§33 – Certainty

Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain.
The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach (“breach of bargain”) and for giving an appropriate remedy.
The fact that one or more terms of a proposed bargain are left open or uncertain may show that manifestation of intention is not intended to be understood as an offer or as an acceptance.

Offer and Acceptance—Bilateral Contracts (Duration of the Offeree’s Power of Acceptance):

§36 – Methods of Termination of the Power of Acceptance

An offeree’s power of acceptance may be terminated by:

rejection or counter-offer by the offeree, or
lapse of time, or
revocation by the offeror, or
death or incapacity of the offeror or offeree.

In addition, an offeree’s power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer.

§38 – Rejection

An offeree’s power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention.
A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement.

§39 – Counter-Offers

A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituting bargain differing from that proposed by the original offer.
An offeree’s power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.

§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 in the proposed contract and the offeree acquires reliable information to that effect.

Case: Normile V Miller. Real Estate agent told them “you snooze you lose”, P still tried to sign contract and turn it in. D had already signed another contract and P knew of this

Acceptance of Offers:

§50 – Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise

Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.
Acceptance by performance requires that at

t comply with the requirements of the offer as to the promise to be made or the performance to be rendered.

Sustainable performance must be rendered for option contract to apply

Offer and Acceptance—Agreements to Agree

§26 – Preliminary Negotiations

A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude the bargain until he has made a further manifestation of assent.

§27 – Existence of Contract Where 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.

Both parties need to move into further writing, just technicalties of putting it into format in Quake case. The meat of the case was done, just needed a “formal” contract

§33 – Certainty

Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain.
The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach (“breach of bargain”) and for giving an appropriate remedy.
The fact that one or more terms of a proposed bargain are left open or uncertain may show that manifestation of intention is not intended to be understood as an offer or as an acceptance.

Walker v. Keith, rented for 10 years agreed to renew. Price was not discussed. However, price is an essential term for this contract.

Quake v American Airlines. Basis for determining breach and remedy. Had already paid subcontracts