WAS THERE A CONTRACT? — the big question
Chapter 1. THE AGREEMENT PROCESS
The sources of contract law: depends on the subject matter of the goods
1) If it deals with the transaction of goods, it is governed by the Article 2 of the UCC
2) Otherwise, it is mostly a matter of common law principles
Article 2, UCC: deals with the transaction of goods only; however, it is liberally interpreted and frequently applied by analogy to service contracts
What is a contract?
– A contract is a promise or set of promises the breach of which result in a remedy at law, and the performance of which the law recognizes somehow as duty.
– Requires an Offer, an Acceptance, and Consideration
Executory contract: a contract that has not been fully performed
Contract Implied in Fact: conduct suggest the contract through actions, etc.
Contract Implied in Law: the court imposes it upon the parties; quasi-contracts
– Sometimes you will see, on an exam, a written document that is strictly evident of an offer, or an acceptance, and we would need to look for whatever element is in question (offer, acceptance, consideration).
I. INTENT TO CONTRACT p.1
You need intent to make a contract.
What is the standard the court uses to determine intent?
– An objective standard; the third party viewing of a handshake.
– it is the outward manifestation that matters most; the look from the third party perspective
Objective Standard: “We judge the conduct according to the standard of a reasonable person in that same situation; however, the term “reasonable person” is amorphous and tends to be one’s self, which can make objectiveness subjective.”
– The standard asserts that whether or not an offer or acceptance is present is based on how a reasonable person in the other party’s shoes would interpret the party’s intentions. It does not matter what the party’s actual intentions were; it only matters what that party manifested as their intent and the other party does not know or have reason to know what their true intent is.
(Example: “Batman & Robin, with Batman selling Robin the Batmobile in Zehmer fashion”)
Offer: A proposed promise to undertake performance of an action, or to refrain from acting, that is to become binding upon acceptance by the offeree
Mutual Assent: A requirement of a valid contract; the parties possess a mutuality of assent as manifested by the terms of the agreement and not by hidden intent
*Same bargain at the same time
*A meeting of the minds
*There is an offer and an acceptance
*Subjective meeting of the minds is not necessary, and objective measure is used, by which each party is bound to the “apparent intention” that has been manifested to the reasonable person
Restatement (2d) of Contracts: Mutual Assent § 19 (conduct as manifestation of assent)
– The manifestation of assent may be made wholly or partly by writ
xication as a defense b/c you have chosen to be drunk and you should not be able to escape the results of your drunken actions.
– a person incurs only voidable contractual duties by entering into a transaction if the other party has reason to know that by reason of intoxication:
(a) he is unable to understand in a reasonable manner the nature & consequences of the transaction OR
(b) he is unable to act in a reasonable manner in relation to the transaction.
– rule: under contract law, the words and acts of a person are interpreted according to a reasonable person standard.
2) Balfour v. Balfour: wife sues husband for money promised
– RULE: “An agreement is not a valid contract unless the parties intend that it can be sued upon (intend to allow the court into their home).”
– rule: both parties to an agreement must intend that the agreement have legal consequences before that agreement may be enforced.
– This is a privacy issue; the court does not want to deal with family disputes like these
– We create a presumption that between a husband and a wife we do not have a legally enforceable agreement; we presume that the mundane agreements between co-inhabitors are not with legal consequences
– See Restatement (2d) § 21(c)