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Contracts
St. Thomas University, Florida School of Law
Plass, Stephen A.

Contracts Outline – Fall 2000 (Plass)
1. The Agreement Process
(a) Missing quantity term, or qualifier, makes the representation fatally indefinite, therefore cannot rise to the level of offer creating a problem of acceptance.
(b) newspaper ads are generally seen as invitations to negotiate rather than as offers
(c) generally deemed invitations and not offers, statement of intention to sell or a preliminary proposal inviting offers
(d) They, however, can become an offer if:
(i) clearly phrased as an offer, definite language (as in qty.)
(ii) invites those to whom it is addressed to take a specific action w/o further communication
(e) look for language of:
(i) commitment
(ii) specific quantity
(iii) representation to anyone in particular
v. Bids & Auctions
(1)
vi. Offers Distinguished from Preliminary Negotiations & Price Quotations
(1)
(2) Lonergan v. Scolnick newspaper ad to sell land, documents back and forth, land sold
(3) Solicitation of offer is not an offer
(4) There is no contract unless the minds of the parties have met and mutually agreed upon some specific thing
(a) “If from a promise, or manifestation of intention, or from the circumstances existing at the time, the person to whom the promise or manifestation is addressed knows or has reason to know that the person making the manifestation does not intend it as an expression of his fixed purpose until he has given a further expression of assent, he has not made an offer”
(i) correspondence
1) response to an inquiry
2) form letter
3) “if you are really interested you will have to decide fast, as I expect to have a buyer in the next week or so”
(b) Language in the case:
(i) negotiations were preliminary
(ii) correspondence indicates intent to find out whether there was an interest in buying the land rather than an intention to make a definite offer
(iii) ad was a request for an offer
(iv) letter contained no definite offer, it was a form letter
(v) expectation that a buyer would come next week
(c) On the ad, soliciting an offer is just that (no definite offer)
(d) Form letters sent to more than one person
(e) Equitable Estoppel: doctrine which prevents person from asserting a right he would otherwise have had were it not because of the effect his conduct would have on another
(5)
c. Intent to Memorialize and Indefiniteness
i.
ii.
(7) to avoid trapping parties in surprise contractual obligations, never intended, more is needed than agreement on each detail to create a binding contract, there must be an overall agreement to enter into a binding contract
Outward manifestation of the parties must be consistent with the meaning of the act After intent is established, parties must show consideration for legal consequencesotherwise, no intent At will nature of employment modified by ambiguity in personnel manual’s disclaimer, employer will be made to live up to promises made to the employees
b. The Offer
i. Distinguished from Expressions of Opinion, Advertisements
ii. Definition: conditional promise to do or refrain from doing some specified thing in the future if the other party accepts / a manifestation of intent to act or refrain from acting in a specified way, so made as to justify a promise in understanding that a commitment has been made.
(1) Manifestation of present Contractual Intent
(2)
(3) Collins v. Reynard client sues lawyer, failed to protect client’s interest in property sale
(4) this case does not seem to add anything to the class, however, if anything, is there an implied promise?
iii. Expression of Opinion is not an Offer
(1)
(2) Sullivan v. O’Connor Three operations later, plastic surgeon screws up entertainer’s nose job
(a) Doctor may be liable for breach when:
(i) Dr. promises to perform surgery [to enhance her beauty and improve appearance] (ii) Dr. fails to achieve a promised result
(iii) Dr. fails to administer a prescribed treatment
(b) the meaning of what was said is a question of fact
(i) use “reasonable person std.” test to determine if what the doctor said was a “statement of opinion” or a promise
(c) It is suggested that agreements b/w doctors and patients be declared unenforceable because of public policy
(i) but doctors maybe frightened into practicing “defensive medicine”
(ii) but outlawing may expose the public to charlatans
(iii) the law has taken a “middle of the road” approach insisting on clear proof
(d) Statements of opinion by the physician with some optimistic coloring of therapeutic value
(e) Doctor-Client relationships, doctors can enter into binding express contract
(f) To distinguish b/w offer & opinion use “reasonable person test”
(g) Has there been an express promise to attain a given result?
(h) Has the professional made an implied promise to exercise due care?
(i) Public policy issue
(j) However, a doctor can make an express promise if the elements of promise exist
(k) Damages
(i) expectancy: amount intended to put plaintiff in the position he would be in if the contract had been performed
1) restitution, an amount corresponding to any benefit conferred by plaintiff upon defendant in the performance of the contract disrupted by the breach
2) difficult to ascertain
3) common in a business context when they have to do with the production or distribution of goods or the allocation of functions in the marketplace
(ii) reliance: damages awarded for defendant’s reliance on the contract, real losses based on expectations
1) pain and suffering
2) mental distress
iv. Ordinary ad, catalog, circular letter not an offer
(1)
Contract law applies to voluntary obligations freely entered into between parties. Damages recoverable under a breach of contract theory are based upon the mutual expectations of the parties Doctors’ comments sometimes are therapeutic in nature, they generally give professional opinions and not promises An advertisement is a mere invitation to enter into a bargain rather than an offer. Need a quantity term.
(2)
Craft v. Elder & Johnston sewing machine sold for higher price than shown in newspaper adAuctioneer has the discretion to open bids on, upon and after acceptance
(a) Hoffman v. Horton bid reopened upon “falling of the hammer”
(b)
(c) Two types of auction
(i) With Reserve
1) bidder is the offeror and the contract is complete when the auctioneer announces it
2) auctioneer has the discretion to re-open bidding
(ii) Without Reserve
1) once an bid is received the auctioneer may not recall an item from auction
2) bidder is free to w/draw the bid before the fall of the hammer
(d) Do not worry much about this case. Definition of acceptance varies from place to place, plus it will not be often that we get these types of cases during our professional careers.
(2) United States v. Briggs Manufacturing
UCC §2-328 sale by auction is complete when the auctioneer so announces by the fall of the hammer or in some other customary manner. When a bid is made while the hammer is falling in acceptance of

e is no contract until formal agreement is executed
a. Intent to Contract
(1)
(2) Lucy v. Zehmer Sold the farm to Lucy saying it was only a joke
(a) facts that offer persuasive evidence that the execution of the contract was serious business:
(i) appearance of the contract
(ii) under discussion for 40 minutes
(iii) Lucy’s objection to the first draft
(iv) rewriting
(v) signing by Mrs. Zehmer
(vi) discussion of what the sale included
(vii) provision for examination of the title
(viii) completeness of the instrument
(ix) taking possession of it by Lucy
(b) Acts of one of the parties have but one reasonable meaning, undisclosed intention is immaterial except when an unreasonable meaning he attaches to his manifestation is known to the other party.
(c) the mental assent of the parties is not requisite for contract formation
(d) if the words or other acts of one of the parties have but one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party
(e) Outward expression of a person as manifesting his intention rather than to his secret and unexpressed intention
(f) objective theory of contracts states that mutual assent should be determined solely from objective manifestations of assent – what the party does and says (a question of law or fact)
(i) this approach protects the reasonable expectations of the parties
(ii) manifestations should be viewed from the vantage point of a reasonable person in the position of the other party
1) knowledge of a reasonable person, and
2) what this party know or should know
(iii) a question of law
1) A makes an offer to B, A is joking but appears serious, Since B would, as a reasonable person would, believe that A is serious, as a matter of law, A made an offer
(iv) a question of fact
1) A makes an offer to B, B knows that A has joked before, Since B knows this, there may or may not be an offer – a question of fact
ii. Intent that legal consequences follow the agreement
(1)
(2) Balfour v. Balfour Husband working abroad pays wife allowance, leaves her, she wants him to continue paying it
(a) Not every statement is a legally binding promise, promises may be made as “gift promise” and have no legal obligation – one must look to see of promissory intended legal consequences
(b) Legal consequences can be expressly waived by the parties
(c) common law does not regulate the form of agreement between spouses
(d) the promise made between husband and wife was not intended by either party to be attended by legal consequences
(e) courts would have to be multiplied hundredfold if these types of arrangements were held to result if legal obligations
iii. Implied promise by employer
(1)
i. Offer Made in Jest