K OUTLINE
• Causes of Action – Substantive Theories of Relief
– Enforceable Contracts – (O+A+C=K)
• Offer
• Acceptance
• Consideration
– The Statute of Frauds
– Promissory Estoppel
– Orphans – Other Enforceable Promises (Moral Obligation)
– Unjust Enrichment (“Restitution” the c/a)
• Remedies
– Damages
• Expectation
• Reliance
• Restitution
• Limits on Recovery
– Specific Performance (Equitable Remedies)
UCC Article 2 covers contracts for goods, otherwise common law is used
Goods – Things that are moveable at the time of identification to the contract
Includes; timber, crops, animals, minerals
OFFER
• Must be Communicated (somehow)
• Must have a Commitment to Contract
• Must be Definite (subject of offer/thing is defined) does not mean clear
Lucy v Zehmer Rules
• There must be mutual assent (offer & acceptance) to form a binding contract.
• However, mutual assent must be judged by the outward words and actions of the parties, not by their secret intent.
Notes on social contracts:
Invitations to social engagements and “dates” are not ordinarily contract offers.
Courts are reluctant to enforce contracts between family members (usually between spouses) that relate to household matters, but if for example, the spouses WORK together then the K would most be enforced
Contracts between family members that do not relate to familial or household matters ARE enforceable.
Reason: It is implied that there is no real commitment to contract (2nd element of offer).
Stepp v Freeman (lottery ticket case)
• Express contracts: “In express contracts, assent to the terms of the contract is actually expressed in the form of an offer and an acceptance.” (p. 13)
• Implied contracts: There is no express offer and acceptance, but “mutual assent” can be inferred from the surrounding circumstances and indirect evidence.
• “To establish a contract implied in fact a plaintiff must demonstrate that the circumstances surrounding the parties’ transaction make it reasonably certain that an agreement was intended.” (p. 13)
• Example (notes for $5, offer to pay you $5 for your notes. You give me notes after class, next week I give you $5. This goes on for two weeks and then I don’t pay you. Was there a K? Probably after a few weeks, but hard to prove after only 2 times)
Note: If K states “this K is not enforceable in a court of law” then it isn’t. It is simply a moral obligation.
Attorney states “I promise we’ll win” a reasonable person would know that an attorney cannot promise that and so no offer exists (even of fees are prepaid)
• Advertisements, circulars and catalogs are:
– generally not offers and cannot become binding contracts if accepted,
– because too many terms are left open.
• Instead, they are usually seen as invitations to make an offer.
• However, if the advertisement is:
– very clear,
– no terms are left open, and
– the method of accepting the offer is explicit,
THEN, in a minority of situations, the offer is valid and can become a contract when accepted
• To determine whether parties intend to be bound by an agreement before preparing a writing, courts should consider:
• (1) Ordinarily put into writing?
• (2) Nature of the contract
• (3) Level of Detail
• (4) Money at stake
• (5) Common or unusual?
• (6) Any Open issues?
(7) Writing contemplated?
MUTUAL ASSENT
• Mutual assent: “If the offeror has clearly manifested a willingness to enter into a contract in such a way
ffered only as a an accommodation.UCC 2-206(1)(b).
IMPLIED TERMS*
• Course of Performance = Terms implied from parties’ conduct relative to same “K.” UCC 2-208.
• Course of Dealing = Terms implied from parties’ conduct relative to prior “K”s. UCC 1-205(1).
• Usage of Trade = Terms implied by common patterns, habits, customs of others in the same industry. UCC 1-205(1).
EXPRESS TERMS TRUMP ANY AND ALL OF THESE THOUGH
ACCEPTANCE BY SILENCE
• Restatement (2d) Contracts Sec. 69(1)
• Silence is NOT acceptance, unless:
– (a) The offeree “takes the benefit” with reasonable opportunity to reject and knows that payment is expected.
– (b) When the offer specifically calls for (invites) acceptance by silence AND offeree intends to accept by silence.
(c) Course of Performance, Course of Dealing, Usage of Trade IMPLY acceptance
Nuance to silence by acceptance
• Offeror is the Master of the Offer, BUT
• There is an exception to this rule in Restatement (2d) Sec. 69(1)(b).
• Comment c: “The mere fact that an offeror states that silence will constitute acceptance does not deprive the offeree of his privilege to remain silent without accepting. . .”
• Therefore, offeror is the master of the offer, but can’t force silence as acceptance on offeree.
• Ex – “I will wash your car, if you pay me $3,000. If I don’t hear from you by tonight at 5 p.m., then you have accepted by silence and I will wash the car tomorrow.” = not okay