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University of California, Hastings School of Law
Martinez, Leo P.

I. Contract Formation
A. Background and Basic Concepts
B. Contract Formation – The Bargaining Process
1. Offer
2. Acceptance
3. Termination of the Power of Acceptance
4. The “Battle of Forms”
5. The Requirement of Definiteness
C. Consideration as a Basis for Enforcement
1. Fundamentals of Consideration
2. Reliance as a Basis for Enforcement
3. Restitution as an Alternative Basis for Recovery
D. The Statute of Frauds
            1. Problem of Statutory Scope
            2. Requisites of Recording and Signing
            3. Ameliorating the Operation of the Statute
E. Finding the Law of the Contract
1. Determining the Subject Matter to be Interpreted
                        2. Interpreting Contract Language
                        3. Filling Gaps
A. Background and Basic Concepts
·        K= “a legally enforceable promise” (K is a promise for the breach of which the law gives a remedy, or for the performance of which the law recognizes a duty)
1)      Promise = commitment as to future behavior
2)      Enforce = how we go about enforcing something depends on the promise that is made; can be achieved through remedies
·        Lucy v. Zehmer: mental assent of the parties not a prerequisite for forming a K; what matters is the parties’ intentions that are outwardly expressed (words and acts), not secret and unexpressed intent
Rules: 1) When one party manifests an intention to be bound by an agreement, upon which another reasonably relies, a binding contract will have been created. 2) The mental assent of the parties is not a prerequisite for the formation of a contract. Instead, whether contract is formed turns exclusively on the outward expression of the parties’ intentions as communicated between them (objective theory of assent).
·        Subjective theory: ‘actual intent’ or ‘meeting of the minds’ v.
·        Objective theory: excludes consideration of the actual intentions of the parties, as distinguished from the outward manifestation of that intention
K remedies: 1) usually substitutional, 2) designed for compensation of victim,
3) punitive damages rare, 4) damages should be reasonably certain
2 Fundamental assumptions made by courts in enforcing promises:
1)      The law is concerned mainly with relief of promisees to redress breach- victim compensation (not with punishment of promisors to compel performance).
2)      The relief granted to the aggrieved promisee should protect his expectation by attempting to put the promisee in the position in which he would have been had the contract been performed.
·        U.S. Naval

    Intent to be bound (outward manifestation)
2)      Manifestation of willingness to enter into a bargain
3)      Justifies a belief that assent is invited and [creates P/A] 4)      Assent will conclude the bargain [creates P/A] o       Offer defined: An offer is the manifestation of willingness to enter in to a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it.” Rest §24.
o       Preliminary negotiations: A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent. Rest §26.
o       UCC 2-204 (CISG similar): both apply to goods only
1)      A K for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a K (K made in any manner sufficient to show agreement-objective)