Contracts- Andersen Fall 2015
Chapter 1: Autonomy and Security Principles
Section 1: Promises
Promise: an act by which a person imagines a possible world and signals a commitment to bring the world into being by future action.
A promise must be made to another person in a social context.
Restatement 1, 2, 3
Expectation Interest: Put the injured party in the position they were promised. Each party believes that the world of the contract will come into existence as promised.
Reliance Interest: Reliance that the other party will perform the action promised, as promised.
Restitution Interest: Concerned with the benefit one party receives at the expense of the other.
Hairy Hand Case example
Pain & Suffering
Fee to Dr.
Fee to Hospital
Failure to Improve
Money is awarded based on which interest is being protected.
Section 2: Promissory Agreements
Restatement 344 – “Remedies”
a. Intentions of the Parties
Restatement 201- “Whose Meaning Prevails”
Subjective- Meeting of the minds. (Get inside someone’s head)
Objective- If actions make someone believe something. (Words that are said)
Restatement 20 (1a) – “Effect of Misunderstanding” – Mutual Assent
Offer: creates a power of acceptance in the offeree.
Offeree can exercise this power by assenting to the offer.
Offer and acceptance is not the only way to reach an agreement.
Restatement 24, 26, 29
33 – Certainty
35 – Power of Acceptance
Lack of Certainty- 33 (1)
33 (2) – No basis of what a breach is and a reasonable remedy. Not Certain = Not Valid
33 (3) – If something is left open or uncertain, it may mean something might not be viewed as an agreement or offer.
c. Powers of Acceptance
41- Lapse of Time
If a counter-offer is made, that implicitly rejects an offer.
Bilateral vs. Unilateral
Bilateral- Both sides do something for the other.
Once accepted, it is a binding contract
Unilateral- When one party offers something for the other party to do something.
e action must also be completed.
Yes-if invited by offer
No implied promise
Notice of acceptance does not qualify as acceptance, performance must commence.
Silence cannot be acceptance except in certain circumstances.
Notice is not necessary when performance makes a contract binding.
Mailbox Rule of Acceptance- Restatement 63
Parties can make changes to these rules among themselves.
e. Formation under the U.C.C
Uniform Commercial Code: Uniform set of laws governing private transactions.
Article 2: Applies to transactions in goods.
Goods: all things (including specifically manufactured goods) which are movable at the time of identification to the contract for sale other than money in which the price is to be paid, investment securities… and things in action.