Contracts Robinette Fall 2014
I- Traditional Formation
II- Promissory Estoppel
I- Traditional Formation
1. Manifestation of Mutual Assent
2. Consideration
1. Manifestation of Mutual Assent
A. Offer
(1)Communication of Present Commitment
a. General Rule- Objective Communication
1. Outward expression of communication
2. Contract Law looks to the actual language, actions—not to the secret intentions
3. Exception—If the party knows or should know their secret intentions (from a “reasonable person’s” perspective)
(2) Certainty of Terms
a. Terms must be “reasonably certain”
1. Basis for determining a breach
2. Providing an appropriate remedy for such breach
b. Essential Terms
1. Parties
2. Subject Matter
3. Quantity
4. Price (if not specified- “fair market value” maybe implied)
c. Important Terms
1. Place of Performance
2. Time (if not specified- “reasonable time” maybe implied)
d. If one Essential Term is uncertain, it may show the offer or acceptance is not valid
1. “may” b/c they could have intended to leave it open
2. Circumstances & facts will determine if reasonable
(3) Special Offer Rules apply?
a. Advertisements
1. General Rule- Advertisements are not offers
i. B/C there is no specific offeree
ii. Offeror should not be expected to carry an unlimited quantity of product
2. Exception may exists if:
i. There is a specific offeree—AND
ii. There is a specific quantity
b. Price Quotes
1. General Rule- Price Quotes are not offers, they are invitations to offer
c. Letters of Intent
1. General Rule- Letters of Intent are not contracts
i. B/C they are bench marks for negotiations working towards a final contract
2. Exception—When both parties agree that a final contract is a mere formality
d. Requests for Bids (Construction Jobs)
1. General Rule—General Contractors requests for bids to sub-contractors are not offers—they are invitation to offers
2. General Rule—Sub-Contractors bids are offers
3. General Rule—General Contractors submission of bids are offers
B. Acceptance
(1) Communication of Present Commitment
a. Rule- Objective Communication
1. Outward expression of communication
2. Contract Law looks to the actual language, actions—not to the secret intentions
3. Exception—If the party knows or should know their secret intentions (from a “reasonable person’s” perspective)
(2) To the terms
(3) By the offeree to the offeror
(4) In a proper manner
a. Bilateral Contract
1. Two Promises
b. Unilateral Contract
s received
2. Very weak standard
3. Dictated by facts & circumstances
(6) Revocation by the Offeror
a. Revocable Offers & Proper Revocation
1. Offeree receives an outward expression by the Offeror that he wishes to withdraw the offer—OR
2. If the Offeree learns through circumstances that the offer has been revoked—Does not have to be a directly expressed revocation—AND
3. Must be done before there is acceptance by the Offeree
4. Offeror may revoke the offer within the time period stated in the terms (those terms apply to the lapse of the offer, not the length of irrevocability)
i. Exception—Any irrevocable offers
b. Irrevocable Offers
1. Option Contracts
i. An exchange of money for time
ii. An “option to purchase”
iii. A specific period of time the offer is good for—the money is what makes the difference.
D. Mailbox Rule
