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Contracts
University of Florida School of Law
Harrison, Jeffrey L.

Contracts – Harrison

2006

Making Agreements
– Mutual Assent
Oral Agreement = (manifestation of assent) interpreted from the stand point of a reasonable
person in the position of the party to whom the manifestation was made
· Subjective: How words and/or actions should have been understood in interpreted reasonably, in context of transaction, by a person with the knowledge and attributes of the party to whom they were directed

Misunderstanding/ Ambiguity (subjective test):
· where both parties intended two different things, but agreed upon thinking it
was the same thing then no contract exists
· when both parties were aware they were agreeing to two different things (ambiguity) then no contract
· when one party was aware of the ambiguity and the other wasn’t there is a valid contract based on the intention of the party that was not aware of the ambiguity/mistake
· Raffles v. Wichelhaus : Defendant claimed that the goods that plaintiff was
willing to deliver in December came from a different
ship that had the same name as the ship that came
before it and the one which contained on board the
goods that defendant contracted for. The ct. ruled that
even though the goods were similar, if plaintiff was
trying to deliver the goods that ame on the later ship,
then plaintiff was I imposing on the defendant a contract
different from that which he entered into

NOTE: If one or both of the parties is not a newcomer then the ct. will attribute an
industry standard and will say that party should have known à enforce
contract

– Offer & Acceptance:
Common Law Offer, Sale of Non-Goods:
· Offer = creates a reasonable expectation in the oferee that the offeror is willing to enter
into contract on the basis of the offered terms
o Offer must communicate a promise, undertaking, or commitment to enter into a contract (each signifies intent)
o Determinants of an Offer:
§ Language = technical words such as “offer” or “promise”
§ Circumstances = applies an objective standard to communications;
looks at whether a reasonable person would have
concluded that what was communicated in the
situation was an offer.
§ Relationship = look at any previous dealings and communications
between the parties
§ Industry Custom of offering
§ Definitiveness = the more inquiries (yes or no questions) the more likely it is not an offer; must have at leas the following definite and certain terms to be an offer:
o Identity of offeree
o Subject matter
o Price and quantity
o Time
§ Employment Contract = must specify duration of work, if not àif accepted employment is terminable at will of either party
· If pay is specified ($/month) then contract is for minimum period stated
o Nature of work to be performed
· Not An Offer
o Advertisement = not specifically directed to a particular personletters etc.
containing price but no specific quantities (the broader the
communicating media the more the courts will construe it
as solicitation rather than an offer)
o Communications containing the term “subject to” or “condition”
o Letters of intent = generally no more than set the stage for the negotiations
and therefore the letter could not be thought of as binding
o Unsolicited Goods = recipient may keep these goods w/out obligation to
pay
· Acceptance of Offer:
o Mail Box Rule = acceptance is given (contract formed) the moment of
envelope dispatch unless:
§ Offer stipulates that acceptance is not effective until received; or
§ Option contract = acceptance only occurs upon receipt
NOTE: applies when offeree sends acceptance and then rejection
NOTE: does not apply when offeree sends rejection and then
acceptance
NOTE: under this rule if the offeree dispatches an acceptance before
the revocation is received the contract is formed.
o Response matches the offer exactly (Mirror Image Rule)
o Specified mode of acceptance à acceptance of specified terms
o Non-specified mode à free to choose between accepting by promise or performance
o Suggested mode àother methods allowed
o In case of doubt àpromise to perform or choose method of Performance
o Options Contractà acceptance upon receipt
o By silence àif offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation
o
· Termination of Offer:
o By Offeree:
§ Revocation
· effective when received
§ Offers additional or conditional terms (Counteroffer)
(i) Last Shot Rule = offeree replies with a slightly

asonable value @ time of delivery; AND
b. Seller must return any portion of price paid on account
o Quantity = must contain a quantity or become one of these below (otherwise no offer):
§ Requirement Contract = buyer promises to buy only from the seller all the
goods he requires
d. Some courts will not enforce req. contracts for new businesses because their req. are uncertain
§ Output Contract = the seller agrees to sell only to the buyer all the all the
goods he produces

· Acceptance of Offer:
o UCC 2-206 = unless offer expressly limits mode of acceptance it may be
accepted by promise or performance
· Notification Requirement = if accepted by performance then offeree must notify offeror within a reasonable amount of time of his acceptance if the offeree knows or should know that the offeror is not able to hear or learn of the performance commencement (i.e. if the offeree is to perform at a place that offeror cannot supervise because he is in another city.
· Nonconforming Goods = shipment of nonconforming goods constitutes both acceptance and breach of contract unless preceded or accompanied by notice that such shipment is offered only as accommodation.
o Buyer is not required to accept accommodation goods and seller may reclaim them.
o UCC 2-207(1-3) = response is acceptance if definite, seasonable, and
not conditional on assent to any new terms even if
states terms different from or additional to those in
the offer.

NOTE: if both are merchants àadditional terms
treated as proposals for addition to contract
and become part of it unless:
(a) offer expressly limits acceptance to only the terms of the offer;
(b) they materially alter it; or
(c) notification of objection to them has already been given or will within a reasonable time after response is response
àdifferent terms are