Colombo’s Course Outline
I. Classic Contract
a. Is there a contract?
i. As affirmed in the Restatement (Second) of Contracts (herein, RST) §1, “a contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.” In more practical terms, classic contract is a “meeting of the minds” or the appearance of agreement to a reasonable person. Here, there is a dispute between …. Classic contract requires three elements for the formation of a contract: offer, acceptance, and consideration.
b. Offer and Acceptance
i. Classic Rules
ii. Is there an offer?
1. “An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it” (RST §24). This requires that an offer be an expression of the offeror’s fixed purpose. Additionally, an offer is outstanding (for a reasonable time) until revoked.
2. Whether ________ may be interpreted as an offer depends on three factors: specificity, audience, and timing in the negotiation process. In this case, … specificity (one or more terms imprecise v. certain enough to determine existence of breach and appropriate remedy)? Audience (individual v. public)? Timing in the negotiation process (offer v. invitation to an offer)?
3. If this is an expression of the offeror’s fixed purpose, then it may be revoked at anytime prior to acceptance or if an unreasonable amount of time has passed. Although the revocation may be indirect through “reliable information,” the revocation must be communicated. In this case, … any reliable information? Oral is probably reasonable to revoke, writing is probably unreasonable in time. Look at subject-matter/intent. What is reliable rejection? Argue this.
iii. Is there an agreement to agree? Reasonable certainty?
1. “Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain” (RST §33(1)). This requires a basis for determining the existence of a breach and for giving an appropriate remedy. The majority of jurisdictions apply an all-or-nothing “open price term” approach where intent overrides the technical failure of offer specificity. The minority of jurisdictions require strict specificity here though.
2. Currently, the terms of this contract … a basis for determining the existence of a breach and the appropriate remedy. Under the majority of jurisdictions, the intent would thus be given credit and …. Under the minority rule, however, the lack of specificity overrides the intent of the parties, and … could it be an agreement to negotiate in good-faith?
iv. Is there an acceptance?
1. “Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer” (RST §50). This requires that an acceptance be on the terms of the offer, but in cases of doubt, the acceptance may either promise to perform or render performance of what the offer requests (RST §32).
2. In this case, … material changes? Even $.01? Or just typographical error and okay? Preparation to perform (unilateral? if so analyze…)?
v. Is there a counteroffer?
1. “A counter-offer is an offer made by an offeree to his offeror relating to the same matters as the original offer and proposing a substituted bargain differing from that proposed by the original offer” (RST §39(1)). Thus, counter-offers reject any existing offers and create a new offer. In the present situation, … relate same subject-matter? Changes the bargain?
vi. Is there a unilateral contract?
1. Is it unclear whether something is a bilateral contract?
a. “In cases 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” (RST §32).
2. “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” (RST §45). In the present situation, … like the plaintiff in Petterson v. Pattberg, XXX is frustrated from being able to ever perform, and absent fraud, duress, or mutual mistake, XXX is bound by the agreement since he has the capacity to enter the agreement.
vii. Is there an option contract?
1. “An option contract is a promise which meets the requirements for the formation of a contract and limits the promisor’s power to revoke an offer” (RST §25). In the present case…
viii. Subjective v. Objective Theories
ix. Will courts look at the intent of the parties or the objective reasonableness of the actions?
1. The objective theory of contracts states that “neither real nor apparent intention that a promise be legally binding is essential to the formation of a contract” (RST §21). Thus, merely an expression of commitment to perform is sufficient in forming a contract. This is because you can’t have a system of contracts based on subjectivity; objectivity is what matters. In the current scenario, … although it appears that there is no meeting of the minds… Like the defendants in Ray v. William G. Eurice & Bros., Inc., it is not intention and a meeting of the minds that is paramount but a need to protect contract law as subjectivity would undermine the entire system of enforcing expectations.
i. Is there consideration?
1. Consideration involves a bargained-for exchange or, in other words, a quid pro quo or
like regulating family affairs, they will when there is reliance but no contract. Often this is because of the problems with emotional consideration. However, unlike consideration, promissory estoppel will allow moral obligations to constitute the reliance. In this case, … use regular PE.
f. Charitable Subscriptions
g. Is there promissory estoppel for this charitable subscription?
i. If there is a problem with consideration, courts will look to reliance for charitable gifts. Use regular promissory estoppel or bargain-for exchange. Argue both. The RST minorityhold charitable subscriptions unenforceable in law where there is no proof of induced action or forbearance.
h. Commercial Promises
i. Is there promissory estoppel for this commercial promise?
i. Commercial promises provide the main application of PE: use regular section.
j. Restitution: use when there is a problem with timing
k. Is there an action for restitution?
i. Restitution requires the return or restoration of what a defendant has gained in a transaction to prevent the unjust enrichment of the defendant. Restitution requires that: (1) the plaintiff confers a benefit from the defendant; (2) the defendant has knowledge of the benefit; (3) the defendant has accepted or retained the benefit; and (4) the circumstances are inequitable for the defendant to retain the benefit without paying fair-value. Unjust enrichment is the unlawful acquisition of money or property of another for which both law and equity require restitutions to be made. In the present case, the benefit… benefit? (existence of a contract negates restitution; base on bargain), officiousness bars (unjustified by the circumstances; could you have instead bargained)?). As for knowledge of the benefit, … Knowledge? Facts to support that … Retained benefit? (what is reasonable value) Finally, the inequitable injustice … Inequitable/injustice? If pay wrong person, not injustice; go to a tort claim.
ii. In order to succeed in restitution claim there are burdens on the plaintiff that must be satisfied: (1) the plaintiff must show that the defendant has not given consideration to anyone for the benefits, and (2) that the plaintiff has exhausted his remedies for compensation. Here, other consideration? Exhausted remedies?