I. K (through the front door)
Ø §1 Def of K
Ø §2 Def of Promise
o Actual vs.
o Mere expression of intention
a. Types
i. Express- formed by language, oral or written
1. Proceed to b
ii. Implied in fact- formed by manifestations of assent other than oral or written i.e. conduct
1. Proceed to b
iii. Implied in law- not true k; quasi k; an obligation imposed by the law without regard to either’s expressed expressions of assent either by words or act; not requested
1. Proceed to III
b. MA and C (§17)
i. §20
ii. Subjective v. objective
1. Subjective- “meeting of the minds”
2. Objective- preferred, cannot get into the minds of others, cts will look for signatures, nodding of head, externals that display mutual assent; rp
a. P. 180 Ray v. Eurice Bros- The test for true interpretation an O and A is not what the party making it THOUGHT it meant or INTENDED it to mean, but what a RP in the position of the parties would have thought it meant
i. The Court held signing a k by a party having the capacity to understand, shows manifestation of assent and party is bound by signature. Although ∆ claims they made a mistake as to the ∏’s changes in specs for the building of a house, ∆ is bound by his signature to the k, for the signature satisfied the objective test that ∆ knew or should have known the details of the k. ∆ Interpretation or intention is merely subjective. No real meeting of the minds, but that is not the test.
iii. P. 180 no intention that a promise be legally binding is required for formation (§21)
iv. Typically evidenced by O and A (§22)
1. Offer §24
a. Offeror is creator of the power
i. Power of acceptance §29 & §52 & §58
ii. Form of acceptance required §30 & §60
1. Prescribed- must v.
2. Request or suggest
iii. Lapse in time
1. Offeree must accept during the time frame prescribed by offer, or if there is not one
2. Within a reasonable time §41
a. Depending on circumstances
b. Unless otherwise stated by lang. or circumstances or §49 an offer sent by mail is seasonably accepted if the acceptance is mailed at any time before midnight on the day on which the offer is received
c. Delay §49
b. Preliminary negotiations
i. §26
ii. P. 181 Lonergan v. Scolnick- Intentions to negotiate with no definite offer constitute preliminary negotiations and are merely “invitations to offers”
1. The Court held correspondence sent between ∏ and ∆ were preliminary negotiations. The first ltr, a form letter clarifies the ad and advises how to locate the property. The subsequent ltr answered some questions and advised the ∏ to act fast, which clearly indicates the ∆’s intention to sell on a first come first serve basis. (offer w/ condition)
c. Certainty §33- terms must be reasonable certain
i. Essential terms include
1. Identity of the offeree
2. Subject matter
3. Price
4. Time of payment, delivery or performance
5. Quantity involved
6. Nature of work
7. NOT all essential terms are necessary
d. Ads- typically invitations to offers but,
i. P. 181 Izado v. Machado- this situation invokes the idea that a binding offer may be implied from the very fact that deliberately misleading advertising intentionally leads the reader to the conclusion that one exists.
1. The Court held consistent to the objective theory, contrary to traditional law that ads are NOT offers, the ad was interpreted as possibly conveying to a reasonable reader the impression that the ∆ was offering to sell any car on its lot for the listed price minus a $3000 allowance for any trade-in vehicle, and the communication should be interpreted as a rp would interpret it, regardless of the secret intention of the ∆.
2. Bait and switch against PP
e. Allegedly binding offers must be viewed as a whole
f. Serious v. Joke
i. Objective standard- rp
ii. P. 181 Leonard v. Pepsico- completion of order form is the offer, which was not accepted by ∆. Not definite enough for ad to be offer, because I specially reserved details to the catalog.
1. The Court held no rp could have understood that the jet plane shown in the ad was seriously offered as a premium for purchase of ∆ soft drinks
g. Termination of offer by offeror §36
i. Revocation- termination by offeror; effective when RECEIVED by offeree §42
1. Direct communication
a. Petterson v. Pattberg- Any offer to enter into a unilateral k may be withdrawn before act requested to be done has been performed
i. The Court held that offer was payment in full and that very act was the
ree has acted in reliance of the offer; irrevocable as an option k for a reasonable length of time; applies to offers not promises; in absence of C- implied involuntary option
a. Baird v. Gimbel Bros.- Mere use by a GC of one particular subcontractor’s bid does not constitute acceptance of that bid
i. The Court held where SC submitted bid to GC for linoleum stating, “We are offering these prices for prompt acceptance after the main project has been awarded, implies the SC is looking for a usual communication of acceptance and the use of the offer in the bidding process is not the equivalent. Therefore, when SC realizes he made a mistake on the figures he is free to revoke the offer prior the GC accepting the bid.
ii. The Court rejects the idea that the linoleum bid was relied on by the GC when he made his bid for the main project. PE does not apply.
iii. Formalist approach; rules do not change
b. Drennan v. Star Paving Co.- §87 Court held ∆ had reason to expect that if his bid for the paving work proved the lowest, it would be used by the ∏ for the larger bid. It induced action of a definite and substantial character. ∏ relied on the bid by ∆, and reasonable reliance can be used to form a k, despite consideration.
i. Default if no statute
ii. Limits- expressly states revocable, bid shopping, bid chopping, cts pretty limited in application to context of bids
4. Firm offers- irrevocable by statute UCC § 2-205 ( no C needed)
a. Applies to buyers and sellers
b. Meets the description of “firm”- assurance it will be held open
c. If stated, could be less than 3 months, but not to exceed 3 mos.
d. Signed, at least initialed
e. No reliance necessary
