Contracts Outline
Seven Questions to Analyze a Contracts Fact Pattern
1. Is there an agreement or promise?
a. No agreement à no contract
b. Agreement à Move onto Q2
2. Is there any reason that this agreement or promise should not be enforced?
a. If there is no reason not to enforce the agreement à Move onto Q3
3. What are the terms of the contract?
4. Was the contract performed?
a. Performance à people doing what they agreed to do
5. Is there any excuse for nonperformance?
a. Sometimes it’s ok not to do what you agreed to do
6. How the courts enforce agreements? What are the legal consequences for not doing what you agreed to do?
7. When do people who did not make the contract have either rights or duties under the contract?
Responsible to know about contract law coming for three places
1. Article 2 of the UCC governs contracts involving sales of goods
a. Goods à tangible property that is not real estate
2. Common Law governs any other kind of contract besides sales of goods
a. Common Law à Cases the professor has assigned to us
3. Restatement
a. Only focus on parts of the Restatement mentioned in class
a. Case law is controlling, not the Restatement
b. Restatement never controls – refer to the Restatement as being relevant to a particular question
Vocabulary
Seven Pairs of Terms to be able to distinguish between
1. Agreement v. Contract
2. Bilateral v. Unilateral
3. Words of Condition v. Words that impose a Duty
4. Delegation v. Novation
5. Expectation Interest v. Reliance Interest
6. Impossibility v. Frustration of Purpose
*7. Parol Evidence v. Statute of Frauds
I. IS THERE AN AGREEMENT?
–Meeting of the Minds
a. Contract formation through Offer and Acceptance
Process of making an agreement à Life Cycle to the Agreement Process (3 stages)
1st STAGE: Is it an offer? — Focus on the first communication b/t the parties
1. General Test – An offer is a manifestation of commitment
2. Would a reasonable person in the position of the offeree think that he has been given the power of acceptance by the offeror?
3. What to look for:
a. Content of the communication
1. What does the fact pattern say about what was written or said?
2. Phrases do not indicate clear offers
a. Three Magic Words
1. Fair, Appropriate, Reasonable
2. If you see these, it’s not an offer b/c the first co
al Promise not to cancel + some payment for the promise not to cancel
2. UCC 2-205
Firm Offer Rule à Sale of Goods + Merchant + Signed writing that promises not to revoke the offer
a. Three Differences b/t Option and Firm Offer
1. Firm Offer Rule only applies to sales of goods; Option rule always applies
2. Firm Offer Rule only applies for promise in writing; Option Rule has no writing requirement
3. Option Rule require payment for the promise to be irrevocable; Firm Offer does not
3. Reasonable and Foreseeable Reliance
a. Offer is irrevocable when the offeree reasonably and foreseeably relies on the offer
b. Example – Sub give General a bid for an elevator; General relies on this bid in making the offer; Sub cannot cancel his offer later b/c it’s irrevocable
4. Offer to enter into a unilateral contract and performance has begun
a. Unilateral Contract results from an offer that requires performance as the only possible method of acceptance
