Contracts Outline Pizzimenti – Contracts I – Fall 2012
a. Objective theory: Lucy, Sullivan: reasonable meaning to other party unless that party knows of unreasonable meaning of the other.
b. Not where intent is preliminary negotiations, Penzoil, Rest 26
c. Not where parties don’t intend legal consequences, Balfour, Rest 21 (possible situations: family, social relationships, gentlemen’s agreements, sham contracts)
d. Not where reasonable person would know mistake in transmission was made.
Agreement = Serious offer + serious acceptance (R.2d sec. 22)
· Outward manifestation of mutual assent. (Lucy)
· The mental assent of the parties is not requisite (meeting the of the minds not necessary, ugh).
· Undisclosed intention do not matter (except when both parties know it’s a joke)
II. Offer (Offeror’s assent. Rest. 22)
a. Rule: Sec 24: An offer us 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. That is:
i. Offeree reasonable, actually believes due to Offeror’s manifestations of intent that an Offer has been made inviting Acceptance. (always look at it from the offeree’s point of view)
b. Not Offer:
i. Opinion. Hawkins, Sullivan
iii. Joke. Pepsico, Lucy
v. Hope, desire
vi. Ad, catalogue, circular. Pepsico. Rest 26 cmt. B
1. Unless Ads has specific terms etc…
vii. Price Quote. Fairmount
ix. Invitation to make offer
xi. Invitation to negotiate. Rest. 26, Lonergan
xii. Preliminary negotiations
c. Factors to consider:
1. Complete: no material terms open for negotiation
3. Unequivocal language of commitment (will, shall, etc.)
d. Is communication an initial communication as opposed to answer to inquiry? Latter more likely Offer. Look at course of negotiations. (Fairmount)
e. How selective is offer? Directed to one or many?
f. Use of Trade, Course of Dealing, Course of Performance
g. External Circumstances such as market
R2d. Sec.1. A promise, or set of promises, for breach of which the law gives a remedy, or the performance of which the law recognizes as a duty.
Sec. 17. Requirement of a Bargain
(1) Except as stated in Subsection (2), the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.
(2) Whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under the rules stated in Sec. 82- 94.
Legally enforceable agreement (promise).
UCC sec.1-201. Total legal obligation created by the agreement
*Drunkenness not excuse in cases where parties have understanding.
§ 26. Preliminary Negotiations (Penzoil)
A manifestation of willingness to enter into a bargain is not an off
neral Rules: Terminable at will
a. Public Policy
b. Implied in fact “personnel manual”
c. Good faith & fair dealing
§ 2-204. Formation in General.
(1) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.
(2) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined.
(3) Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
IV. Acceptance (note: “Section” = Restatement section)
A. Section 50(1): Acceptance of an Offer is a manifestation of assent to the terms thereof, made by the Offeree in a manner invited or required by the offer.
1) Offer made? What would offeree think?
2) Acceptance made? What would offeror think?
a. Listener, recipient point of view
O à A = K, (Can’t unscramble an egg)