Contracts I (Marks 06)
(K= Contract, Or= Offeror, Oe= Offeree, O= Offer, A= Acceptance, C= Consideration)
Contract- a promise, or set of promises, that the law will enforce. Requires: (OAC):
(1) an offer
(2) acceptance
(3) consideration (or a consideration substitute).
The law considers performance of a K as a duty, & remedies the breach of a K. K’s require a manifestation of mutual assent (the manifestation of mutual assent can be inferred through a party’s conduct if the party had reason to know that the other party could infer from his conduct that he assents. It does not matter what the parties’ hidden, subjective mental intent is [Lucy v Zehmer]).
Mutual Assent- is an objective manifestation of intent to be contractually bound.A showing of Mutual Assent is necessary to have an enforceable K. Mutual Assent requires:
(1) Offer
(2) Acceptance
Promise- a manifestation of intention to act or refrain from acting in a specified way, made in a way that justifies a Promisee in understanding that a commitment has been made.
Promisor- the person manifesting the intention.
Promisee- the person the manifestation is addressed to.
Unilateral Contract- (Promise for act or forbearance to act). Or is asking for an act from Oe. It is rare that Or only wants an act from Oe to serve as acceptance (usually rewards, etc.).If Oe fully performs the act Or asked for in the offer (within the time required or permitted by the offer, & before the offer is revoked by Or or by lapse of time), a K is made. If Oe partly performs the act Or asked for in the offer (be sure it is part performance & not mere preparation), then Or is obligated to perform once Oe completes performance, making Or bound under an Options K, while Oe is not bound & has a reasonable amount of time to complete performance.
Bilateral Contract- (Exchange of promises). Or is asking for a promise from Oe. It is rare that Or only wants a promise from Oe to serve as acceptance.
Normal Contract- in most offers either it is unclear whether the Or wants an act or a promise (ambiguous offers); or the Or does not care whether the Oe acts or promises. In these cases Oe can accept through either an act or performance (be if full performance or partial performance). If Oe accepts (either through promising or performing), both Or & Oe are bound. If Oe accepts through partial performance, Oe is bound to fully perform within a reasonable amount of time, & Or is only obligated to perform once Oe fully completes performance.
Options Contract- a promise which meets the formation of a K & limits the promisor’s power to revoke an offer. Power o
ents between people w/ familial relations.
Oral Agreements- are binding K’s (provided Statute of Frauds does not apply), unless the parties did not intend to be bound until there was a written document & were merely Preliminary Negotiations.
Written Contract to Follow- in some cases oral agreements are not held to be enforceable K’s if P can prove that they only intended to be bound by a Written Contract to Follow. Courts ask if similar K’s are:
(1) usually in writing
(2) need formal writing for full expression
(3) few or many details
(4) large or small amount of details
(5) what form of K is common & what form of K is unusual
(6) are all details agreed upon or are some details unsettled
(7) was a written K discussed or contemplated
Offer- the manifestation of a willingness to enter into a bargain by Or (master of the offer) that justifies the Oe (one who offer is made to) in believing that his assent is invited & will conclude & cement the bargain. Offers must be: (CCD)-
