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Contracts
University of Oklahoma College of Law
Knippenberg, F. Stephen

Contracts Knippenberg 2015

Attack Roadmap p.

Scope p.

Kx formation p.

Offer p.

Statement of lowest price p.

Price quotes/list p.

Ads are not offers p.

Bids are not offers p.

Promises p.

Differences with gift and kx promises p.

Family kx’s p.

Subjective/objective p.

Satisfaction clauses p.

Good faith p.

Price p.

Consideration p.

Bargained for p.

Benefit/Detriment p.

Forbearance from a legal right p.

Peppercorn p.

Moral obligation p.

Substitutes for Consideration p.

Estoppel p.

Settlement agreements p.

Acceptance p.

Manner of acceptance p.

Silence not ordinarily acceptance p.

Termination of Power (revocation, death, lapse, rejection) p.

Rewards p.

Mirror Image Rule p.

Option kx p.

Mailbox Rule p.

Limitations on the Mailbox Rule p.

Overtaking acceptance/rejection (whichever gets there first) p.

Mailbox rule & option kx p.

UCC §2-207 (UCC’s response to mailbox rule) p.

Basic structure of 2-207 p.

Precontractual Liability p.

Unilateral kx p.

Bilateral kx (deals with contractors) p.

Liability for failed negotiations p.

Enforcement p.

Definiteness p.

Statute of Frauds p.

Capacity (minors & mental infirmity) p.

Overreaching (duress) p.

Pre-Existing Duty Rule p.

Concealment p.

Fraud and Misrepresentation p.

Unfairness p.

Standardized form/adhesion kx p.

Unconscionability p.

Public Policy p.

Illegality in procurement (obtaining) p.

Performance and Breach p.

Parol Evidence Rule p.

Merger Clauses p.

Ambiguity and Vagueness p.

Conditions p.

Responses p.

No breach, compliance p.

Promissory Duty/Condition p.

No breach, justification (substantial performance/doctrine of divisibility) p.

No breach excuse, mutual mistake p.

No breach excuse, impracticability/impossibility p.

No breach excuse, frustration of purpose p.

Remedies p.

Three types p.

Measuring Expectation Interest p.

Avoidability p.

Foreseeability p.

Reliance as a basis for recovery p.

Restitution as a basis for recovery p.

Canned Answers p.

Cases p.

Remedies PP p.

Practice Test p.

Annoying Chart p.

Things to Remember p.

-REMEMBER!!!!

Kx formation? No! Try à Quasi kx (restitution) unjust enrichment

Kx formation? Yes, but unenforceable! Tryà Quasi kx (restitution) unjust enrichment

Attack Version

Roadmap for Kx Analysis (you have to go step by step; cant continue if its not met)

1. Scope (geographic will never be an issue)

-What law within the state governs?

Subject Matter: Statute (UCC) *article 2 is the most common one* this for the SALE OF GOODS (things, like things you can buy at the store) OR Common Law of Kx (Family, land, service, etc)

2. Kx Formation

-The ? is whether a Kx has even been formed?

-Is it a Kx or Gift promise?

3. Enforcement (exceptions to the general rule to KX promise or exceptions gift promises)

-Is there any reason not to enforce it? (like for Kx promises, the exceptions)

4. Performance & Breach

-Decide if there is a breach

-Does the defendant have a reason it breached

-If so, the party against whom breach is alleged has an array of responses available

If there is a breach excuse, stop the roadmap, if there isn’t, keep going

5. Remedies

-The complaining party is entitled to a remedy for breach of Kx — generally money damages, though sometimes, an “equitable remedy” (ex: injunction or specific performance” may be available)

SCOPE

-Subject Matter: Statutes (UCC) article 2 most common (which is the sale of goods) (things, like things you can buy at the store) OR Common law of kx (family, land services, etc)

Kx Formation

OFFER

-Kx requires offer + acceptance + consideration

-Offer = promisors promise + price for that promise + consideration

-To be consideration for the promisors promise (whats coming back across) the promisee’s performance or return promise has to be 1. Bargained for AND 2. Benefit to promisor or detriment to promisee (only a few require #2)

-Offer: (R24) 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.

-manifestation does not have to be words

-think: would a reasonable person think that it is an offer, if they would, then it is one Lucy v Zehmer (he knew he was kidding, but everyone else didn’t; If his words and actions, judged by a reasonable standard, manifest an intention to agree, it is immaterial (irrelevant) what may be the real unexpressed state of his mind)

-Pre-offer phase: preliminary negotiations; merely an invitation for offers

-This is where Kx begins; PN’s begin with first communication between parties (ex: phone call, email, letter, visit, etc) asking whether a party can supply a product of perform some service

-At some point along the way, PN’s can turn into offers (others just walk away) when the offer justifies another in understanding his assent will conclude the bargain

-Statements of lowest selling price are NOT offers (ex: “lowest price I would take” “not less than” “wouldn’t consider less than”)

Owen v Tunison: {offer: the mere statement of lowest price is not an offer – it is just negotiations (those people are just trying to see what the markets like; what they could get for their good)}

-under the subjective theory: no kx bc no meeting of the minds

-under the objective theory: Owen was not reasonable in his belief that he really would sell when he merely stated lowest price

Harvey v Facey: {offer: again, the mere statement of lowest price is not an offer, therefore it cannot be accepted}

-In general, price quotes/lists are NOT offers; instead they are invitations for offers to buy orders

-Price quotes/lists can become offers (ex: buyer requests a price lists for specific quantities of goods and seller responds with a price list) YOU HAVE TO LOOK AT ALL THE CORRESPONDENCE BETWEEN PARTIES

-Seller’s price list doesn’t have to specify quantities if the quantities were specified in the buyer’s request

-Eliminates the usual risk of price lists that seller might not be able to fill all the orders because they know exactly how many they want and if they can fill them

Fairmount Glass Works v Cruden-Martin Woodenware: {A quotation of price is not an offer to sell (rather they are invitations for offers to buy orders); a price list is not an offer to sell; an ad with prices is not an offer to sell} NOTE: this case does not follow this rule-that’s why you have to know the reason behind the rule so that you can show why it shouldn’t be compared to the rule! – HERE it was not a quotation of prices, but a definite offer to sell on the terms indicated (the specific amount and how they’ll deliver, etc) and could not be withdrawn after the terms had been accepted.}

-If price quotes were offers, then catalogues (like Sears) would be considered offers to sell and the seller might run before everyone ac

actions that depend on the one with A. (Ex: shippers or stores)

-GENERAL RULE: promises with consideration, called contract promises, are enforceable. Gift promises, are promises without consideration, and are not enforceable

-Is there consideration (quid pro quo) means “something for something” aka something sought for the promise?

No! = Gift Promise

-Not (generally) enforceable bc no economic gain; just a transfer of funds

-Once a gift has been given, it cannot be taken back (and courts wont say that can) bc then again, your just transferring funds and there is no economic gain

-EXCEPTIONS: promise relied on the promise (Section 90)

Yes! = Contract Promise

-(Generally) enforceable

-We like these!

-Economic gain bc both parties give something up and both are then better off

-EXCEPTIONS: lack of capacity, duress, illegal, threat, statute of limitations, mutual mistake

Family Kx’s

-Non-Commercial, family Kx are regularly implicate personal family relationships. Therefore, they frequently do not lend themselves readily to resolution through judicial process

-They are frequently oral

-They are frequently gift promises; routinely presumed gratuitous

– Court recognizes gratuitous transfers, but not gratuitous promises. Why?? Transfers have already been completed and making them return the gift would be like enforcing a gift promise bc you would just redistributing funds. Gift promises serve no useful economic function

Subjective/Objective

-subjective: your own thoughts

-objective: the thoughts of reasonable people

Satisfaction clauses

-Type 1 (objective): where the condition calls for satisfaction as to commercial value or quality, measured, and measurable by recourse to an objective standard outside the discretion of the promisor.

-This type is not illusory bc performance is not optional with the promisor

-Type 2 (subjective): where the condition is measured by reference to the promisor’s subjective (own) judgment; measured by the promisor’s good faith

-Whether a promisor acts in good faith is determined with reference to objective evidence available which goes to his credibility

-Mattei v Hopper Mattei’s promise, “I promise to buy the property if I find leases satisfactory to me, [and I’ll make my determination that leases are satisfactory or not in good faith”.]

-In short, Mattei had to exercise his option in good faith, an implied term of his promise. Should he refuse to perform for some reason other than his good faith dissatisfaction with such leases as he found, he would be in breach of the implied terms of his promise. Thus, his promise, with the implied duty of good faith, is capable of being broken such that he would be liable for breach of Kx. Thus, the promise, though illusory on its face, is not when the implied GF term is included.