Contracts
Verstein
2013
Essay Analysis
· Is there a contractual duty? Mutual assent + consideration
o K?
o Is there some element of unfairness to where the ct will want to find a k or restitution?
§ Promissory estoppel – (1) promise, (2) promisor reasonably expects reliance, (3) detrimental reliance/change in position based on reliance, (4) injustice
· The issue that gets you here is a failure of consideration
· 3 things that cts tend to find unjust:
· ENFORCEMENT OF PROMISE, but sometimes you just get what you lost due to reliance
· Can be brought even if no benefit conferred upon promisor yet – more of a focus on the detriment of the promisee whereas restitution is concerned with the unjust benefit on promisor
§ Unjust enrichment – (1) benefit conferred on promisor, (2) appreciation/knowledge by promisor of benefit, (3) acceptance/retention of benefit under the circumstances would make it inequitable
·
§ Promissory restitution – (1) benefit conferred on promisor, (2) promise to compensate, (3) unjust not to compensate
· Just compensating people to make them ‘whole’
· What does the k mean here? Interpretation and parol evidence
· Can the k be enforced or are there any defenses? SOF
· Did D perform?
K = Mutual assent (o & a) + consideration
· K = agreement bw 2+ persons, something to be done in future by one or both parties
o An agreement that has legal effect and creates and obligation
o Legal mechanism for which we protect expectations that arise from making of future agreements
· Agreement-in-fact (actual meeting of the minds) bw parties v agreement-as-written (what the words of k say)
· Express k (parties state their terms) vs Implied k (do not state terms)
· Sources: Opinions, Statutory Law, Restatements, Legal commentary, CISG, UCC
· Perspectives: formalist (rules), sociological jurisprudence (social interests), Legal Realists (no black letter law, case-by-case basis), economic analysis (efficiency of business decisions), relationship bonds (decisions which keep the business relationship together)
· K vs Quasi K (no contract, but imply one when Ps case would be unfair otherwise)
o No consideration à promissory estoppel; no mutual assent à restitution
K Law
Allen v Bissinger
· Mutual assent – if his words and acts, judged by reasonable standard, manifest an intention to agree, agreement is est; it is immaterial what his true state of mind is
o found from language of k, objective meaning of words and acts
o P’s offers to purchase D’s ICC reports, taken objectively, manifested an intention to enter into a k; D sent them; the fact that P didn’t think the bill would be so high and didn’t think he was getting more than 1st distribution doesn’t matter (burdensome or unprofitable)
o A k is formed where, obj, an acceptance although not exactly mirroring the language of an offer, clearly refers to the subject matter of the offer, so that parties manifest an intention to agree on the same thing
Feldman v Google
· Clickwrap agreement is binding where P was given reasonable notice of agreement’s terms and conditions and it is clear that by clicking an acceptance button, P agrees to be bound to those terms
o Failure to read clickwrap is immaterial
o He had to click a button stating that he read, understood and agreed to k before continuing! He activated his account – proof that he had to have agreed to terms
o Other cases where clickwrap was insufficient because had to click several times, terms were on another hyperlink, agree button at bottom where you wouldn’t see it
o Clickwraps are ‘written ks’ because can be printed and stored
· A k may still be found even if a price term is not agreed upon, SO LONG AS it outlines a practical method of figuring out price in k with reasonable certainty, like market standard
Restatements
Mutual assent
· Contract = promise(s) for the breach of which the law gives a remedy or the performance of which the law in some way recognizes a duty
· §2 – Promise = manifestation of an intention to act or refrain from acting in a specified way, so made as to justify a promise in understanding that a commitment has been made
o Can be oral or written, can be inferred wholly or partly from conduct
· §3 – Agreement = manifestation of mutual assent; §19-20 objectively by words or conduct
· §24 – Offer = 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
o Must be necessarily communicated, specify performances to be exchanged + terms that will govern the relationship, must be directed at person(s), and must invite acceptance and lead offeree to reasonably understand that acceptance will create k
· Acceptance = offeree’s manifestation of assent to the offer w/in time prescribed and in a manner invited by offeror
o Whether a reasonable person in offeror’s position would have understood the manifestation as an acceptance
o Manner invited can be explicit (ONLY that method), specified but not exclusive (reasonable method so long as it is consistent with the preferred method), or not specified (can use same mode as offer or any customary/reasonable method)
o Acceptance by silence
§ Offeror cannot impose a duty on the offeree to take some affirmative step to reject the
sideration by full performance
o Offeror agrees to act/forbear from acting, in exchange for performance by offeree
o Offeror is the only one that is bound; if the offeree performs, he must follow through on his side of bargain; if offeree begins performance, he is bound to keep the option open
o Offeree is never bound – he can render some performance and then dip out
o Can only give the form of acceptance sought after by offeror; here = performance, not return promise; so cannot be sneaky and make it into a bilateral
§ IF VAGUE AS TO HOW ONE MAY ACCEPT, §32 + UCC §2-206 says offeree may choose to accept either by promise of by performance
Petterson v Pattberg (classical unilateral k view)
· An offer to enter into a unilateral k may be revoked at any time prior to performance of the act requested to be done
o Performance that he sought for formation/completion of k = giving of $ from offeree to offeror. Even though the offeror made that impossible by refusing to take the money, it can still be said that the offeror rightly revoked his offer since offeree had yet to accept through performance
· Dissent – acceptance should’nt be barred by revocation when offeror makes it impossible for offeree to fully perform! Offeror makes promise to perform as well – to accept offeree’s performance
Cook v Coldwell
· In the context of an offer for unilateral k, offer may not be revoked when the offeree has accepted the offer by substantial performance
o D offered bonuses, P worked towards and demonstrated requisite gains to get bonuses, D pushed back time of full performance, then tried to revoke before that 2nd date
o Part performance may furnish consideration for the implied subsidiary promise that offeror will not revoke offer before original time to perform fully
Modern: Restatement on Unilateral à option k
· §62, 45: Where an offer invites an offeree to accept by performance, an option k is created when offeree begins performance – must keep offer open for a reasonable time
· Mere preparations to perform is not enough, must actually begin performance
o These might be enough to constitute reasonable reliance for promissory estoppel though!
