Contracts Outline Fall 2015
Textbook: Fransworth 8th Ed
Organized not by syllabus, but by Textbook Order
Chapter 2 – Creating Contractual Obligations
Sec 1. The Nature of Assent
Lucy v. Zehmer pg. 128 | 84 S.E.2d 516 (1954)
– à A contract is binding, even if made in jest, if the other party is not reasonably aware of the joke.
o (sale of land – it was written and signed by both parties, scribbled on napkin tho)
o (The objective, outward expression of a party’s intent to be bound in an agreement, as opposed to that party’s subjective mental assent to the agreement, is all that matters when determining the existence of a valid and enforceable contract.)- Quim
o P was also able to show that they acted in reliance
– This is objective approach
o Objective and subjective measures to assent, but courts normally use objective measure.
– Restatement § 16 – intoxication
– Rescission restatement §89, comment b
Sec 2. The Offer
– Offeror is the master of his offer, it is revocable until its accepted.
– Open for a reasonable time if its doesn’t specify.
– One accepted neither party can exit without liability. Deal has been struck/deal has been sealed
What moves a court on way or another in determining an offer:
– Language “quote” vs offer, “for immediate acceptance”
– Addressee – general public
– History of prior communication
– Offer: An action indicating willingness to enter into an agreement, done so that one would understand that acceptance is invited and would result in an agreement. To do or not do something.
o Don’t count: Illegal doesn’t count, Something you’re already obligated to do.
– 3 elements:
o Intent – objective intent
o Usually not offers. Invitations to offer.
§ Acceptance by performance, definite terms
Owen v. Tunison pg. 142 | 158 A. 926 (1932)
– à An intent to negotiate a sale and statements made during negotiations are not offers, so no contract.
o Not an offer because it did not indicate his intent to be bound to selling at that price. At most, Tunison may have made this statement with the intention of opening negotiations for the sale of the Bradley block. [Quim] o [Case where letter back said impossible for me to sell my property unless I receive 16,000 in cash is not an offer –its just how much D thought property was worth).
Fairmount Glass Works v. Curden-Martin Woodenware Co. 51 S.W. 196 (1899 | pg.145
– à Letter from the seller to the purchaser containing the quoted prices was an offer to sell at those prices because the letter invited immediate acceptance and contract was completed by the purchaser's acceptance.
o [The mason jars back and forth telegrams case, doesn’t seem that quoted prices are enough, look at as a whole (invites imed. acceptance. D can not revoke later saying output all sold out now]
Lefkowitz v. Great Minnapolis Surplus Store 86 N.W.2d 689 (1957) | pg 148
– à Once a store publishes an offer/advertisement that is clear, definite, and leaves nothing for interpretation, and is accepted, there’s an offer. A seller may modify offer before acceptance but after acceptance can not impose new terms.
o [The fur coats for a dollar case, first come first served basis. Dude came and tried to buy but they said woman only (coats were in stock. Cant modify terms of K after condition!)
o Remember that normally ads aren’t offers.
Elsinore Union Elementary School District v. Kastorff, 353 P.2d 713 [Online] – à A bid is normally an irrevocable option, but can be rescinded, one way if via mistake of fact, unilateral mistake and quick notification.
o Prof: case can be seen as exception to general ruse that once if you have an acceptance neither party can exit without liability. (court is letting them exit because a certain kind of unilateral mistake and quick notification)
o [Case where the school sued contractor on accepted bid that he quickly tried to revoke] – Quim: Although a contractor’s bid on a public work project becomes an irrevocable option that cannot be revoked once opened, a contractor can rescind when a clerical error causes a mistake in computation of the bid. A contractor may rescind a contract when (1) the mistake is material; (2) the offeree knows or has reason to know that the bid was based on a mistake before accepting; and (3) it would be unconscionable to enforce the agreement as made.
Sec 3. The Acceptance
Restatement §56 – must notify acceptance
Time for performance is a reasonable time – UCC 2-309 (i)
International Filter Co. v. Conroe Gin, Ice & Light Co. 277 S.W. 631 (1925) | pg. 157
– à Where the form of acceptance is not prescribed by the parties, a
als of DTP vaccine at $64.32 each. Since the computer-automated acknowledgment of P’s May 19 offer to purchase 1,000 vials did not constitute acceptance and shipment of 50 was an accommodation, no dice.]
o “Goods are called non conforming goods when the delivered goods are not the goods specified in the purchase contract.”
Sec 4. Termination of the Power of Acceptance
Options: Limits offerors power to revoke for a limited time
– Restatement §25
– Article 2 UCC – firm offers § 2-205
o Consideration NOT required.
Dickinson v. Dodds LR 2 Cd.D. 463 (old English case, 1876) | pg. 181
– à An offer may be revoked by the offeror without an express or actual statement of revocation communicated to the offeree provided there has been no acceptance to the K that offeror is aware of and the offeree is aware of conduct by the offeror demonstrating intent to revoke the offer.
o Here the conduct of D was admitted to by P. But if P found out in a bar, unclear if that would count
– à The offer to keep the contract open was not legit because there was not consideration for it.
o [The case where D told P in a letter we have till X to make decision if you want to buy this land. Later D found out P made someone else an offer, even though not X, ran to tell him he accepted)
A “meeting of the minds” occurs when both parties to the contract have the same understanding of and mutually assent to the terms of an agreement at the same time. It is sufficient to form a valid contract.
Drennan v. Star Paving Co. 51 Ca.2d 409 (1958) | pg. 187
– à An offer which can be and does induce substantial reliance by the offeree is binding, even the the subcontractor to general contractor relationship to prevent injustice to the offeree (general contractor).
o [The Subcontractor (D) to general contractor P case, D did not say as promptly as Kasaroff and now P is tied to the whole price and will pay out of pocket b/c overall bid accepted.)