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Contracts
University of Kansas School of Law
Ware, Stephen J.

Contracts, Professor Ware, Fall 2016
 
FORMATION
Consideration/Requirement of a Bargain
Consideration = exchange arrived at by way of bargain
“Consideration for what?”
Generally promise for performance (unilateral) or promise for promise (bilateral)
Hamer v. Sidway
Uncle promised nephew $5000 if nephew gave up drinking, smoking, gambling, etc. until nephew’s 21st birthday; nephew did so but uncle never paid and died without paying; court found nephew’s giving up drinking, etc. to be consideration for uncle’s promise to pay $5000
Bargain requirement eliminates legal enforceability of gratuitous promises
Kirksey v. Kirksey
Lady moved to her brotherin-law’s land that he just gave her for free after her husband died, then he kicked her out; court found no contract because it lacked consideration without a bargained for exchange; it was just a gratuitous promise
At-will employment agreements are generally found to have consideration
Lake Land Employment v. Columber
Promises as Consideration
Consideration for a promise can be found in a return promise
Has a performance actually been promised or has only the illusion of a performance been held out?
Strong v. Sheffield
Strong loaned Sheffield money and sued when Sheffield didn’t pay; Strong set the loan up so he could collect whenever he wanted; without structure, the promise was illusory and could not be legally enforced to collect against Sheffield
When parties attempt to make a contract where promises are exchanged as the consideration, the promises must be mutual in obligation
Mattei v. Hopper
Promises may be implied as well as express
Wood v. Lucy, Lady DuffGordon
Reliance as a Basis of Enforcement
Reliance is an alternative to consideration
A gratuitous promise would normally be unenforceable because it lacks consideration, but reliance on that gratuitous promise may constitute consideration
Ricketts v. Scothorn
Feinberg v. Pfeiffer Co.
Restitution as a Basis for Recovery
Gains produced through another’s loss are unjust and should be restored (unjust enrichment)
Restitution is an entirely different claim than breach of contract
A restitution claim can result from an implied contract when no actual contract existed
Cotnam v. Wisdom
Callano v. Oakwood Park Homes Corp.
Assent
Manifestation of mutual assent along with consideration/reliance is required to form a contract
Two different schools of thought on assent
Objective (intent of the parties doesn’t matter; reasonable person)
Lucy v. Zehmer
Specht v. Netscape
Subjective (intent of the parties is all that matters; more lying)
Objective school of thought won out in Restatement
Offer
Offer + Acceptance = Mutual Assent
Offer defined by Restatement 24
Owen v. Tunison
Fairmount Glass Works v. CrundenMartin
Advertisements constitute offers if facts show that some performance was promised in positive terms in return for something requested
Lefkowitz v. Great Minneapolis Surplus Store
Acceptance
Corbin: “Acceptance is a voluntary act of the offeree whereby he exercises the power conferred upon him by the offer, and thereby creates the set of legal relations called a contract. The offeror has, in the beginning, full power to determine the acts that are to c

Forms
UCC governs sale of goods not only between merchants but between merchants and consumers
Often special rules for merchants because they’re more familiar with commercial practices
Battle of the Forms rises in a contract for a sale of goods when both parties believe they have reached an agreement in forms they have sent each other, but it turns out the terms in those forms don’t match
Often occurs with “boilerplate” or “standardized” forms
Written confirmations do not form a contract when previous acceptance already had
Nothing oral, just writings
UCC 2-207 abandoned the Mirror-Image Rule in order to further commercial needs
UCC will fill in gaps to take care of some major terms
Dorton v. Collins & Aikman Corp.
“A contract is recognized notwithstanding the fact that an acceptance or confirmation contains terms additional to or different from those of the offer or prior agreement, provided that the offeree’s intent to accept the offer is definitely expressed and provided that the offeree’s acceptance is not expressly conditioned on the offeror’s assent to the additional or different terms.”
Contracts can be formed through conduct
C. Itoh & Co. v. Jordan Int’l Co.
Determining Contract Terms under UCC 2-207
Additional terms only drop off if they cause surprise or hardship