Contracts Outline – Fall 2014 Professor Fitzgerald
Ways Initial Offer or Promise is Enforceable
1. Offer + Acceptance + No Consideration Issue
2. Acceptance by Performance of Bilateral K
3. Promissory Estoppel
Ways Initial Offer or Promise is Irrevocable
1. Express Option Contract
2. Implied Option Contract
a. Acceptance by performance of unilateral K
b. Written assurance of option that recites consideration
c. Promissory Estoppel
3. Firm Offer
Contract
1. Oral or written agreement between two or more persons
2. An exchange relationship
3. At least one promise
4. Legally enforceable
UCC Article 2
1. Governs sales of goods, not services
2. Sale
a. Transfer of title from seller to buyer for a price
3. Goods
a. All things movable at time of sale
4. Predominant Purpose Test
a. If predominant purpose of sale is goods, then apply UCC Art. 2
5. Merchants
a. Expert buyer or seller
Contract Creation
1. Was there mutual assent (offer + acceptance)?
2. Was there consideration?
3. Are there any defenses to creation of K?
Assent: Parties are bound by their apparent intention manifested to the other party (objective)
Contract Formation
1. Offer
a. Creates power of acceptance in offeree
b. To be an offer, must create reasonable expectation in offeree that offeror is wiling to enter into a K when offeree accepts
i. Ask:
1. Was there an expression of a promise or commitment to enter into a K?
2. Was there certainty & definiteness in the essential terms?
3. Was there communication of these terms to the offeree?
ii. Promise
1. Must be more than a mere invitation to begin negotiations (must be intent to enter into K). Consider:
a. Language
i. Plain meaning
b. Circumstances
c. Custom
d. Method of Communication
i. Advertisement Rule
1. Advertisements are not offers, instead they are invitations to make an offer (unless language is so certain & definite that it is a K)
iii. Definite & Certain Terms
1. Terms must be definite enough to be enforced
2. Only need material terms (e.g. price, quantity)
3. Missing Terms
a. Does not prevent K formation if parties intended to make K & there is reasonably certain basis for providing remedy
b. Gap Fillers
i. Court can supply missing terms
eyond preparation)
5. Bilateral K’s where performance has begun
b. Rejection by Offeree
i. Rejection terminates offer
ii. Counteroffer
1. Rejection of initial offer by offeree & is new offer
2. E.g. adding terms, changing price
iii. Rejection is effective when received by offeror
iv. Offeree must accept within specified time or, if no specified time, within reasonable amount of time or offer is rejected
3. Acceptance
a. Manifestation of assent to terms of offer
b. Creates K
c. Offeree must know of offer to accept
d. Acceptance of Unilateral K
i. Completion of unilateral K is acceptance
ii. Beginning performance can create option K
1. Beginning performance does not require completion
iii. Offeree is not required to give offeror notice of beginning performance but must give offeror notice of completion
