Contracts Outline
I What is a contract?
A) A promise that is enforceable by law.
1) Promise: one’s statement about future conduct made so that the maker should expect the person to whom it is made to rely on it as dependable.
B) Requirements
1) Objective manifestations of assent by both parties required(offer and acceptance)
2) Consideration
3) Both parties must have mental capacity
C) Remedies
1) Specific performance – requirements of proof are higher
2) Declaratory Judgment – court just says you’re right
3) Damages – payment to the extent that you would have received had the contract been completed
D) Default vs. Immutable Rules
1) Default rules can be negotiated around. (E.g. the mail box rule, reasonable amount of time to accept, etc…)
2) Immutable rules are mandatory and cannot be negotiated. (imposed by courts or statutes)
E) Types of Contracts
1) Express – agreement manifested by words.
2) Implied in Fact – agreement manifested by conduct
3) Implied in Law (quasi-contract) – not a true contract, but an obligation imposed by a court despite the absence of a promise in order to avoid injustice.
II Ascertainment of Assent
A) Objectives
1) Creates power of acceptance in offeree
2) Creates liability on part of offeror
B) Objective Test
1) For a communication to be an offer, it must create a reasonable expectation in the mind of the offeree that the offeror is willing to enter into a contract.
2) Applies where defendant has carelessly used language which induced actual and justified reliance by plaintiff
3) Factors
(a) Expression of promise, undertaking, commitment
(i) Must show intent to enter into a contract
(A)Judged only by outward actions.
(B)Irrelevant – inner or secret intent.
(C)May entitle one to something s/he did not actually intend
(ii) Language
(A)Ambiguity contstrued in favor of offeree
1. Embry v. McKittrick – employee thought employer was rehiring him.
a. intention of the parties doesn’t matter as long as the words spoken (or written) would lead a reasonable person to believe that a contract had been made
(iii)Surrounding circumstances
(A)Made in jest or anger and reasonably understood as such – no contract
(B)Made in jest but reasonably understood by offeree to be serious – contract
1. Lucy vs. Zehmer – offer made while drinking.
a. If offer is made in jest, is it reasonable to believe that it is an offer?
b. If so, did the offeree actually believe it is an offer?
(C)Prior practice and relationship of parties
(D)Method of communication
1. Broad communications media
a. Usually viewed as invitation for offer
b. Exception – reward offers.
2. Advertisements
a. Usually construed as invitations for offers, NOT offers themselves
b. If there is a danger of multiple a
multiple acceptances can be brought into this.
(c) In order for an advertisement to constitute an offer, it must be stated clearly
4) Offer must be communicated properly
(a) Longergan v. Scolnick – negotiating sale of property.
(i) Preliminary negotiations:
(A)Not an offer – Form letter should be construed as a willingness to accept an offer, not an offer in itself.
5) Termination of Offer
(a) Rejection & Counter Offer
(b) Death of offeror/offeree
(c) Destruction of thing to be sold
(d) Illegality of activity
(e) Revocation
(i) Even if the offeror does not expressly revoke offer, if the offeree has reason to know that offer has been revoked, the offer is revoked Dickenson v. Dodds
(f) Time
6) Time for Acceptance
(a) If the offer has a stated time within which the acceptance must be made, any attempted after such time is a mere counter-offer.
(b) No time stated – “reasonable” amount of time to accept is assumed.
(c) Time runs from the date of receipt by offeree, or, if circumstances require, from the date offeree would normally have received offer.
Generally, courts hold that in telephone or face-to-face
