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University of Oklahoma College of Law
Tabb, Murray

Contracts Tabb Spring 2017

How Promises are Enforced

Consideration: what you give for someone else’s consideration back to you to seal the deal; can have promise or performance

Main functions:

Evidence: memorialize transaction

Guts of the deal:

Doesn’t have to be the same or equal
Must be timing/reciprocal nature
Must be inducement for why you did it

I give something, you give something; That thing we give in our bargaining
Difference in saying you’ll do something and actually doing it
Reciprocal, bargained for and given in exchange
Timing: must be contemporaneous and reciprocal
Courts do not second guess deals:

Freedom of contract: willingly assume duties with reasonable understanding of risks
Balance: defer to intentions of parties at time of contract formation
Goal: effectuate the reasonable, justifiable expectations of parties—“objective theory” rather than subjective interests
Fairness: protect at outer edges, as long as good faith and fair dealing avoiding unconscionability its okay
Law of contracts is not about did you make the “best” deal or a “good” deal [adequacy or sufficiency] However, courts in some cases will come in and supervise deals


Process: info, authority, capacity, bargaining power

How we came into this

Assent/bargaining: consensual, reciprocal duties, intentional
Terms: certain, understandable, notice of obligations

Forbearance to assert or the surrender of a claim/defense which proves o be invalid is not consideration unless: the claim/defense is doubtful because of uncertainty as to the facts/law, or the forbearing/surrendering party believes the claim/defense may be fairly determined to be valid

Requirement of good faith

Restriction of lawful freedom is consideration

Forbearance: giving up something you have a right to do

Do we care about intent (what person was thinking)?

Matters more objectively
Must connect dots to link consideration to the bargain

Could have different or multiple reasons people enter deals but must show inducement to enter

Have to see the bargain


Behavior; duress, undue influence
Status; minority mental capacity
Public policy
Basic Assumptions fail
Morally obligedà right thing to do is different than contract law

A moral obligation that motivates a promise for some benefit previously received is not sufficient consideration
A moral obligation is sufficient consideration to support a subsequent promise to pay where the promisor has received a material benefit, although there was no original duty or liability resting on promisor

Past service is not consideration

No bargainingà doesn’t count as consideration for something already done

Gifts are not bargained for

Must be benefits and detriments

Illusory Promises: promise was fake; illusoryà not a real deal
Not consideration if reserves a choice
Protect people against themselves
Either both people are bound or no deal
If sounds conditional, then it is illusory

“If I do these things then I will do that”

Never really promise to do anything

Promissory Estoppel

Must have a promise

Promise: making a commitment

Must be definitive
Manifest intent to do something

Perspective; objectively

Who has to do what?
Look at from both perspectives

What is promissor’s?

Reasonably expect to induce actionà objective test

Causation and reliance

Promisor has objective knowledge that what they are doing will induce a response
Reliance or forbearance on something with character
Injustice avoided by enforcement

Equitable Estoppel: defensive, you misrepresented something to me

Make you stay with what you originally presented
Misrepresentation character

Maybe not a bargain but seems to be an injustice
There is an inconvenience and reliance

Restitution: prevents unjust enrichment

One side is holding a benefit the law would say is unjust if no payment
Quasi-contract: not a contract but acts like one, fictional construct

Loosely contracting
Judge implies: factors at work that are like you had a contract

Implied in law: conceptually different than implied in fact

In fact: represents parties intention to bargain
In law: does not represent intentions [Restitution]

No othe

to accept (right person to accept)
Anything that would preclude acceptance has been dealt with

5 Criteria for acceptance

Was acceptance specific, definite, unequivocal

Show commitment to be bound
Enough detail to correspond to terms of offer

Timing; reasonable time to accept (general rule)

Offeror can dictate different outcome; can give specific time
Acceptance has to be given before offer revoked

Way you accept depends on manner invited
Communicate what you’re doing (notice)

If making promise, they need actual promise
If doing something, actions give notice

You can always specify what you want

Indicate follow my path, provided its clear
Set of default rules in play unless you say differently

Mailbox rule: acceptance of bilateral contract is by mail/posting upon receipt in a reasonable time

Exceptions: stated specific thing to do; or used reasonable method
Accepted once mailed; can’t back out because would allow speculation on prices

Mutual Assent

Objective theory of contract
Carry out manifestoed reasonable intention and justifiable expectations of parties

At the time of contract formation
Risk based: hold parties responsible for type and degree of risks fairly assumed
Objectivity: uniformity, predictability, and certainty aids judge/jury

Real or apparent intention that a promise be legally binding is essential
Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance

More what you do than what you subjectively think you’re doing

Manifestations have to be related
Determine intent based on what person does

Objectively did you intend to enter bargain: what where outward manifestations