Contracts Outline – Davis
I. Meaning of Terms:
What is a contract, promise, agreement, bargain?
A. Restatement §1 Contract: A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law recognizes as a duty.
i. K = [O+A] + C
B. Restatement §2 Promise: A promise is a manifestation of intention to act in a specified way, so as to justify a promisee in understanding that a commitment has been made.
C. Restatement §3 Agreement, Bargain: An agreement is a manifestation of mutual assent on the part of two or more persons. A bargain is an agreement to exchange promises or to exchange a promise for a performance, or to exchange performances.
D. Restatement §4 How a Promise may be made: A promise may be stated in words either oral or written, or may be inferred wholly or partly from conduct.
i. Ex. Cup of coffee at Denny’s poured for silent customer.
II. What law applies?
A. UCC or Common law?
i. Is the contract for goods?
1. UCC § 2-105
a. “Goods” means all things (including specially manufactured goods) which are movable other than money investment securities, and things in action. Also includes unborn young of animals, and crops.
b. Predominant purpose test: (used for MIXED K) Princess cruise
i. Language of the contract
ii. Nature and purpose of the business
iii. Intrinsic worth of the materials
iv. Gravamen of the harm
III. Formation of Classical Contracts
A. Restatement §9 Parties Required: Must be at least 2 parties, promisor and promisee, but can be any greater number.
B. Restatement § 12 Capacity to Contract: Person does not have full legal capacity to incur contractual duties if he is,
i. Under guardianship, or
ii. An infant, or
1. (18 years of age)
iii. Mentally ill, or
1. Unable to understand in a reasonable manner the nature and consequences of the transaction
2. Unable to act in a reasonable manner
IV. Mutual Assent
Is there intention to be bound?
A. Restatement §17 Requirement of a Bargain: Formation of a contract requires a bargain where there is a manifestation of mutual assent to the exchange and consideration.
B. Restatement §18 Mutual Assent: Requires (1) each party make a promise OR (2) begin to render a performance.
C. Restatement §19 Conduct as Ma
A. Are there Preliminary negotiations?
i. Restatement § 26: A manifestation of a willingness to enter into a bargain is NOT an offer IF the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
Is there an offer?
B. Restatement §24 Offer Defined: An offer is the manifestation of a 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.
i. Requirements of an Offer:
a. Examples: Price, quantity, date,
a. No “fuzz” words used
a. Example: “I will sell to you…”
ii. ADS are generally NOT offers, why?
1. usually made to public, not to specific individual
2. language usually isn’t specific, complete, and unequivocal
3. beginning of performance is acceptance
iii. ADS are only offers when,
Explicit, clear, definite, and leave nothing open for negotiation.