Select Page

Contracts
University of Toledo School of Law
Pizzimenti, Lee Ann

Contracts Outline

Initial Questions
1. UCC or CL
a. UCC
i. IF it is transition in goods that are movable at time of contract (2-102, 2-105)
ii. Can use UCC gap fillers (not for quantity)
iii. 1-103: Common law supplements the UCC if there is not a specific designated section
b. CL (applies to all other contracts)
i. If material term is missing then unlikely a contract
ii. Can fill if there is a mechanism
2. Definitions
a. Usage of trade-any practice/method of dealing (“ten carloads” )
b. Good faith:
a. Non Merchants: §1-201(g)(19): Honesty & fact when the conduct and transaction occurred.
b. Merchants: §2-103(1)(b): Good faith means honesty & fact and the standard of fair dealing in the trade.
c. Coercive behavior: can be evidence of lack good faith, but not conclusive
c. Offeror: person making an offer to a person/persons
d. Offeree: person given the power of acceptance
3. Court will intervene if matter of public policy
4. When damages are inadequate, can use specific performance (force parties to agree or mediate)

Assent:

a. For predictability and fairness
b. RULE: would a reasonable person believe and did this person actually believe that the other party has given assent (Lucy)
i. Does not equal assent
1. joke (known)
2. sham
3. Mistake: would a reasonable person (in position of the buyer) believe a mistake was made? (selling a diamond ring for $1)
4. parties do not intend to be legally bound
a. family or social situations (Balfour v. Balfour) § 21
b. Gentleman’s agreement or letters of intent: not intended to be binding

II. The offer: Section 24 (outward manifestation to enter a bargain so that another understands his assent is invited)
1. Manifestation: Lucy
2. Factors
a. Specific
b.Complete
i. Offer hasn’t occurred without a quantity (unless 2-306)
ii. Usage of trade, course of dealing (past contracts), course of performance (this contract), etc. can fill gaps
iii. Material terms missing: may not be an offer, especially for common law (§ 3)
c. Unequivocal language of commitment
d.How selective? Directed toward one or many? [one = more likely offer] e. External circumstances, such as the market
f. Course of negotiation
i. Is the communication an initial communication or the answer of an inquiry? [answer = more likely offer] 3. Not an Offer
a. Ad (unless clear, definite, explicit, and leaves nothing open for invitation to negotiate/bid)
b. Price quotes (not an offer to sell, but the language can sometimes imply an intent to contract)
c. Estimates
d. Opinions (unless: lawyer with an implied promise; doctor makes a promise of certain results)
e. Negotiations: (initial communications, invitation to make an offer, & invitation to negotiations) §26: if the other party knows that a bargain is not intended to conclude until further assent has occurred

III. Intent to Memorialize and Indefiniteness § 26: not an offer if the offeree knows that the other party does not intend to conclude a bargain until there is further assent
1) 2 part test
a. Is there intention to be enforceable
i. If a contract has been agreed upon and all that remains is good faith negotiations or elaboration of non-essential terms, the contract will be held legally enforceable despite the uncertainties
ii. There needs to be enough to figure out what responsibilities are, whether there was a breach, what damages there are?
iii. Courts disagree on application
1. Texaco v. Pennzoil: looked at all the factors and went beyond the document to determine intent to enter into a contract
2. Arcadian: any statement that looks like there will be a later agreement shows intent not to be bound
3. Factors
a. Language
b. Partial performance (parties acted as though they believed they had a contract)
c. Complete or things left open?
d. How complicated (if is, then things are probably left to be done before legal obligations)
b. If yes, how to determine ope

t with acceptance or rejection
iii. Do not say it is a “unilateral” or “bilateral” offer; rather, it is an offer looking toward a “unilateral” or “bilateral” contract
b. Silence: is it a reasonable mode of acceptance?
i. Silence alone does ≠ acceptance because it is not sufficient to show an outward manifestation of assent (§ 69)
ii. UNLESS:§ 69(1)
1. Offeree takes benefits, with reason to expect the services are not free and with reasonable opportunity to reject
a. family: presumption of gratuity where services are expected to be free (Wilhoite: 3rd cousins ≠ family)
b. statutes of unsolicited goods may change this result (usually just for a consumers)
2. Offeror states silence is acceptable and offeree intends to accept by it (both agree ahead of time)
a. enforced when the offeror breaches (offeror made the ambiguity so responsible)
3. Because of course of dealing, course of performance, offeree should have notified the offoror that he did not intend to accept
c. 2-206: (is shipping a reasonable mode of acceptance?)
i. Unless otherwise unambiguously indicated by the language or circumstances
1. Reasonable mode
2. Offer requesting shipment construed as inviting acceptance by shipment (of either conforming or non-conforming goods) or a promise to ship
3. Non-conforming goods ≠ acceptance, however, if the shipper notifies the buyer that it is just an accommodation (counter offer)
4. When performance is reasonable, an offeror who is not notified within a reasonable time can say it has lapsed
CL: if offeror says ship the goods and offerer promises to