Contracts Outline

Contracts Zierdt Fall 2015

Section 1. Enforceable Promises: An Introduction

· What “contract means as a matter of law

· The Restatement of Contracts, Second

o Defines contract as a “promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty”

· How does the law determine which promises to enforce?

o Some promises are found to be legally enforceable and others not.

· The Restatement of Cotracts— a comprehensive statement of general common law principles first promulgated by the American Law Institute (ALI) in 1932

· The Restatement, Second

o Described as “common law persuasive authority with a high degree of persuasion.”

o “legal realism”

· Beyond the Restatement, statutes are a distinctive and direct source of authority

o Particularly Article 2 of the UCC

§ Applies in cases involving the sale of goods.

· Primary sources relied on are cases — the judicial opinions that constitute the common law.

· An example of creative restating from the first Restatement of Contracts was the formulation of the doctrine of promissory estoppel in §90

§2-104 The Restatement 2nd—Definitions of “Merchants”: “Between Merchants”: “Financing Agency”

(1)“Merchant” means a person who deals in goods of the kind or otherwise by his occupation holds himself our as a having knowledge or skill peculiar to the practice or goods involved in the transaction or to whom such knowledge or skill maybe attributed by his employment as an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.

(2) “Financing Agent” means a bank, finance company or other person who in the ordinary course of business makes advances against goods or documents of title or who by arrangement with either the seller or the buyer intervenes in ordinary course to make or collect payment due or claimed under the K for sale, as by purchasing or paying the seller’s draft or making advances against it or by merely taking it for collection whether or not documents of title accompany or associate with the

(3) “Between merchants” means any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.

Creating Contractual Obligations

ASSENT

Assent to a bargain

1. Two contrasting theories of contract

· “Objective”

· “Subjective”

Lucy v. Zehmer (1954)

2. Zehmer offered to sell Lucy his farm for $50k. Wrote offer on back of receipt at “Ye Olde Viriginie Tavern.”

3. Lucy accepted.

4. Zehmer said it was a joke.

5. Court held that Zehmer made an offer and that Lucy accepted.

6. Court used objective theory of assent to a bargain, or what a “reasonable person” would believe at the time the contract was formed.

7. Because the terms of the K were specific and there was only one offeree and Zehmer’s wife signed the offer—the parties had mutual assent.

OFFER

Owen v. Tunison

(1) Owen sent Tunison a ltr asking to buy a piece of prop for 6k

(2) Tunison responded he could not sell for less that $16k cash

(3) Owen sent 16k—- THIS IS THE ONLY POINT WHERE THERE WAS AN OFFER

(4) Tunison did not sell

A mere statement of a minimum selling price is not an offer to sell real property.— same conclusion in Harvey v. Facey (Jamaica)

Fairmount Glass Works v. Crunden—Martin

a quotation of price is not an offer to sell.

ACCEPTANCE

1. Silence as Acceptance: general rule is that silence alone is not acceptance, however, silence can be acceptance dependi