CONTRACTS
PORTER
SPRING 2013
GENERAL INFO
1. IRAC, Issue, Rule, Application, Conclusion.
a. The A in IRAC can also stand for argument and analysis.
2. Make all arguments for both sides. If you find yourself concluding too easily, think hard about what you would argue if you were representing the other side.
3. Make and defend conclusions – don’t just say the court may or may not.
4. Pay CLOSE attention to the call of the question
5. Organize, organize, organize—I try to give you points for everything you say that is relevant, but if you are jumping from one issue to the next, it’s hard for me to follow, and it shows a lack of grasp of the material. If you do jump around, refer me to the right place. Use headings and paragraph breaks.
a. Don’t organize around the facts. Organize around the legal issues.
6. Don’t just state facts without telling me to which argument the fact is relevant.
a. Avoid “facts up in the air.”
7. Don’t discuss things we haven’t talked about.
8. Review the exam quickly at the beginning. Decide how to allocate your time based on your understanding of the material. My suggestions are just that—suggestions. You have to decide how much time to spend. Reviewing exam at the beginning also allows you to avoid wasting time with issues discussed in other questions.
9. Use checklists to make sure you don’t miss any issues.
10. Outlines are helpful to you, but don’t spend so much time on them. Use shorthand and do them quickly.
11. Don’t waste time with intros or conclusions. Don’t waste time discussing issues that are not really there. If the answer is a no-brainer, it’s probably not an issue I wanted you to discuss.
12. FIRST ARGUE P, THEN D, THEN J (WHY).
13. MEETING OF MINDS – Only family promises
14. O&A GRATIOUS PROMISES
a. Not an O&A issue but consideration, PE or PR
b. Exception, Joey and Henry Hunter, Did party intend to make an offer?
c. If no SUB/OBJ don’t need to talk about O&A
15. CONSIDERATION – does the condition benefit the promisor
INTRODUCTION
1. Lawyering Roles re Contracts
a. Negotiate Contracts
b. Draft Contracts
i. What terms to include
ii. Look at past precedent
c. Interpret and advise
i. What does this mean
ii. What needs to be done
d. Litigate (enforcement or defense)
2. What is a Contract?
a. Agreement in fact
i. Agreement between two or more persons as to something that is to be done in the future by one or both of them.
b. Agreement as written
i. The document in which the agreement is set forth (which may or may not be the same as the agreement in fact).
c. Legal effect of the agreement
i. Set of rights and duties created by (1) and (2):
3. Sources of contract law – UCC, Article 2
i. Primary authority as states have adopted certain sections
ii. Doesn’t govern personal services contract or sale of real property
4. Roadmap
a. What is required to form a contract?
i. Offer and acceptance
ii. Consideration
iii. Sometimes, a writing
b. If there is a contract, what are its terms and what does it mean?
i. General Rules of Interpretation
ii. Parol Evidence Rule
iii. Supplementing the Agreement
c. If there is a contract and we know what it means, have the parties fulfilled their obligations or does the party have a defense or excuse not to perform?
i. Defenses based on capacity or bargaining misconduct.
ii. Justifications for Nonperformance
iii. Breach
d. If there is a contract, we know its terms, and we know it has been breached, what remedies will the law allow?
5. 3 grounds for making a contract enforceable
a. Something in exchange for the promise (consideration)
b. Reliance on the promise (promissory estoppel)
c. Unjust enrichment (restitution)
CONTRACT FORMATION
OBJECTIVE INTENT & OFFER AND ACCEPTANCE
1. Objective Theory/Intention to Be Bound
2. RST 17 – Requirement of a Bargain
(1) Except as stated in subsection (2), the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration
3. Formation of contract requires:
a. Offer and Acceptance
b. Consideration
c. Sometimes, a writing
4. Ray v William G Eurice & Bros., Inc.
a. Unilateral mistake on contract terms/specifications for house made contract enforceable
i. Only mutual mistake will void contract
b. Rule: Absent fraud, duress, or mutual mistake, one having the capacity to understand a written document who reads and signs it or without reading it, signs it, is bound by his signature.
5. Mutual assent (objective) vs. meeting of the minds (subjective)
a. Meeting of the minds requires that both parties subjectively agree to the same terms. – ONLY USE FOR GRATIUOUS PROMISES
b. Mutual assent: looks to objective intent–what a reasonable person would think the contract said.
c. Objective manifestation of intent matters, not the subjective intent.
d. Policy
i. Objective – need to be able to predict what will happen
ii. Subjective protects little guys who can’t understand or realize what is happening
6. Jokes – Is there a binding contract?
a. Yes, if RPS in A’s shoes would think that B was serious
a counteroffer
c. Revocation must be communicated – direct or indirectly
d. Timing- to have an enforceable timeline, something must be exchanged
e. Promise to hold open an offer doesn’t matter unless a valid option contract which means it has to be supported by consideration (usually money)
10. RST 36 – Methods of Termination of the Power of Acceptance
(1) An offeree’s power of acceptance may be terminated by
(a) Rejection or counter-offer by the offeree, or
(b) Lapse of time, or
(c) Revocation by the offeror, or
(d) Death or incapacity of the offeror or offeree
(2) In addition, an offeree’s power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer
UNILATERAL CONTRACTS & ACCEPTANCE
1. Unilateral Contracts – General Rules
a. Offeror is seeking an act of performance, not merely a promise to perform
b. Reasons: Offeror doesn’t want to be bound until performance has been rendered, and offeree’s ability to perform is speculative
c. Typical cases: reward, real estate agent
d. Offer is not accepted until performance has been rendered
e. Offeror can revoke at any time before acceptance
2. RST 32 – Invitation of Promise or Performance
In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses
3. RST 45 – Option Contract Created by Part Performance or Tender
(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
(2) The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.
i. Starting performance is enough to hold the option open
ii. Offeror is bound as soon as offeree starts walking
iii. Offeree can quit at anytime and offeror is not bound, but if offeree finishes, offeror must pay.
iv. ALSO argue, need substantial performance – some courts follow
