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Contracts
University of Toledo School of Law
Pizzimenti, Lee Ann

Contracts Outline

Initial Questions
1.    UCC or CL
a.       UCC
i.            IF it is transaction of 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)


I.       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)
Restatement sec 21- if intention is not legal relation, then no K; Manifestation of intention that promise shall not affect legal relations           
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 of assent inviting another to enter into a contract)
1.      Manifestation: Lucy
2.      Factors
a. Specific
b.Complete

further assent
1)      2 part test
a.      Is there intention to be enforceable
i.      Sect 33- material term missing, no intention
ii.      2-204- intent if material term is missing; just look at facts
iii.      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
iv.      There needs to be enough to figure out what responsibilities are, whether there was a breach, what damages there are?
v.      Courts disagree on application
Texaco v. Pennzoil: looked at all the factors and went beyond the document to determine intent to enter into a contract