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Contracts
University of California, Hastings School of Law
Prince, Harry G.

Contracts Issues
1.      Formation
2.      Terms/Interpretation
3.      Performance/Breach/Excuse
4.      Remedies
 
Bases of Obligation
1.      K= MA (O+A) + C
2.      Detrimental Reliance—Promissory estoppel — AND Pre-acceptance reliance
3.      Restitution—implied in law K– unjust enrichment
4.      Promissory Restitution
5.      Formality—a writing under seal
 
 
Bilateral K
Unilateral K
§ Part performance –§45
§ Classic view Wormsor Bridge Hypo
§ §32—if unclear offeree decides –perform or prom
Offer
§ §24—just say yes & we have a deal
§ §33—Cartianty of terms
§ §26—Preliminary negotiations
§ Lonergan v. Scolnick
§ creates a power of acceptance
§ §43- indirect revocation—reliable info
 
Acceptance
§ By means specified by offeror (master!)
§ §50—Manifestation of assent to the terms
§ Mirror Image Rule (§59) [contrast to battle
of forms UCC § 2-207] § Rejection
§ Counteroffer swaps power of accept. (Normile)
§ Mailbox Rule (henthorn v. fraser)
§ Acceptance by any means reasonable
§ timely acceptance. power of accept. lapses
after reasonable time
§ by silence (contrast UCC)
 
Consideration
§ bargained for exchange (§71)
§ mutual inducement or benefit detriment
§ conditional gifts (dougherty)
§ adequacy of consideration (batsakis)
§ Past consideration (plowman)
§ sham/nominal consideration
§ Illusory/Alternative promise (DuPont or §77)
§ Moral Obligation (Penn O Tex)
§ To avoid fraud—alternative view Prof Fried—moral oblig. just should be enforced
§ funstions: 1)evidence(iary) of assent, 2) cautionary (against inconsiderate action), 3) chenneling—simple & external test for the ct.
 
Restitution
§ life rescue (§116) – In re Crisan
§ property rescue (§117) – Glenn v. Savage
§ 3 party cases – Flooring systems
§ cohabitation – Watts v. Watts
 
 
 
 
Promissory Restitution
§ Material benefit (webb v. McGowan)
§ Maj Rule- Mills v. Wyman—Moral oblig not
enforceable
           
Promissory Estoppel
§ family relationships—Kirksey v. kirksey
§ charitable subs. – Allegh. Coll. or Marylnd Bank
§ commercial promise (pension) Katz v. Danny
§ substantial & material change in position—Fried
v. Frank
§ unconscionable injury—Tutak v. Tutak
Pre-Acceptance Reliance
§ Baird
§ Drennan/ R2d
§ Palpable Mistake Rule
 
Option K
§ consideration—nominal/recited
§ writing necessary—SoF
§ prom estoppel applies
§ Compare—merchants firm offer (UCC)
 
Agreement to Agree
§ not enforceable/don’t waste the courts time
§ (Walker)
§ Duty to negotiate in good faith (Teachers)
§ UCC by analogy—some terms can be left out
 
Statute of Frauds
§ §110- things included
§ §131—Subject Matter, Parties, Essential Terms
§ §132—several writings ok (Crabtree)
§ §133- memo not made as such
§ §134—signature
§ §129-Exceptions—part perf. on an interest in
land– $$ not good enough, must have moved in or made repair
§ to discourage fraud, perjury, cause memories
fade, encourage deliberation in k making, judicial efficiency
 
Interpreta

annot be determined.
 
R2d § 27 Existance of a Contract Where Written Memorial Is Contemplated
Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show that the agreements are preliminary negotiations.
 
II.                Objective Theory
 
“meeting of the minds”—an agreement about the gist of the exchange
 
Test: an OBJECTIVE ONE. Would a reasonable person have believed that the parties agreed to the terms and agreed to be bound?
 
What a reasonable person in the shoes of the parties would understand the words and conduct to be.
 
Judge Learned Hand: Twenty Bishops—“even if it were proved by twenty bishops that either party, when he used the words, intended something else than the usual meaning which the law imposes upon them, he would still be held”
 
You don’t want to make it hard to enforce contracts even with poor/uneducated etc. because then people/businesses would be unlikely to enter into contracts with them—therefore ignorance, not reading or understanding DOES NOT get you out.