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Contracts
St. Thomas University, Florida School of Law
Sullivan, Todd P.

CONTRACTS 1 OUTLINE
 
Agreement- any meeting of the minds, even without legal obligations
 
Promissory estoppel-  form of protection: a promise made without consideration may still be enforceable to prevent injustice if the promisor should have reasonable expected the promisee to rely on the promise, and if the promisee did actually rely on the promise
 
Contract- binding agreement between two or more persons or parties
–       Must have offer, acceptance, and consideration to form a contract
–       Requires an exchange of promises
–       Not all contracts are enforceable (i.e. contract to kill someone is not enforceable)
 
Contracts Big 6 Questions
1.    Did the parties form an agreement?
2.    If yes, is their agreement a contract?
3.    Do the terms of that K or the subsequent actions of either party confer any rights or impose any duties upon “non-traders?”
4.    Once all parties that have rights or duties have been identified: Have the performance obligations created by the K matured?
5.    If so, has performance been excused?
6.    If performance is not excused or tendered = breach… Remedies Available?
 
An enforceable contract must have (1) valuable consideration and (2) no defenses
 
Breach of contract- non-performance of the terms by one of the parties to the contract
 
** UCC Article 2 applies to the sale of goods
Goods­ – things that are moveable at the time of identification to the contract
 
The Offer
 
Lucy v. Zehmer
–       The outward expressions of the parties is more important than secret intentions
–       Objective standard = what would a reasonable person think based on the facts and circumstances
–       Subjective standard = what is going on in the mind of the offoree
o   Putting yourself into the shoes of the person hearing the offer
–       An offer has a life, which eventually ends after a reasonable time
 
Offer Must Have:
Intent
Content
Communication
 
–       Oral agreements to do not nullify a written agreement
–       The law does not promote secret agreements
 
–       Offer – the manifestation of willingness to enter into a bargain, which justifies another person in understanding that his assent can conclude the bargain.
–       Acceptance – a manifestation of assent to the terms of the offer by the offeree in a manner required or invited by the offer.
 
Balfour v. Balfour
–       There was an agreement, but no contract
–       The parties did not intend to have legal consequences in the agreement
–       Generally, when married couples form an agreement, it is not an enforceable contract
 
Subjective- what is going on in the mind of the parties involved (i.e. cowboy harness hypo.)
 
Objective – what a reasonable person would believe based on the facts
 
Sanchez v. Life Care Centers of America
Adhesion contract- a contract prepared by one of the parties with little or no input from the weaker signing party
–       Contracts of adhesion are sometimes valid, depending on the circumstances (LSAT Company Contract is valid contract of adhesion)
 
MCC-Marble v. Ceramica
 
–       A business man signing a contract should know to not sign unless he understands the terms
–       A contract is still valid even if you do not understand the terms (i.e. Italian contract)
 
**UCC Article 2: The only essential term in a contract for the sale of goods is quantity
 
–       Oral contracts are valid, but a witness is required to prove the existence
 
Collins v. Reynard
–       Legal malpractice is a tort, not a contract issue
–       But, if a lawyer is negligent, then a tort action can be brought against him
 
Leonard v. Pepsico
–       Advertisements, as a general rule are not offers unless:
o   the ad is clear, definitive, explicit, and leaves nothing open to negotiation; then thi

hat the “thrust” of the complaint is
–       Looks to that portion of the transaction upon which the complaint is based
 
Southwest Engineering v. Martin Tractor Co.
–       even if one or more terms are left out of the agreement, a contract for the sale of goods does not fail
–       The UCC Article 2 gap fillers will supply the missing term(s)
–       If a payment term is not agreed upon, then payment is due at the time and place of delivery and the price is to be reasonable based on market value or a 3rd party index
–       Under Article 2, the statute of limitations can never be less than one year
 
Courts look at the following when supplying missing terms:
Mandatory provisions
Course of negotiations
Usage of trade
Customs within the industry
 
Copeland v. Baskin Robbins
 
Agreement to negotiate- an agreement that a party liable for if a failure to reach an ultimate agreement resulted from a breach of that party’s obligation to negotiate in good faith
 
agreement to agree­ – not the same as an agreement to negotiate, and this can never be a enforceable contract
–       An agreement to agree on a term in the future is not enforceable if the parties cannot reach an agreement
 
Oglebay Norton v. Armco
–       The court intervened and applied to pricing mechanisms to the existing contract
 
Unilateral contract – requires performance from only one party before an agreement and contract is formed. A unilateral contract involves an exchange of the offeror’s promise for the offoree’s act.