Contracts OUTLINE
Week One
Introduction to studying Contracts (what is law?)
– Statutory and Common Law
– The UCC and Restatements
o Wants us to referr to UCC as Y-ucc-K. Do not pay attention to these except for the few that are specifically mentioned by professor. Only UCC sections in class or handouts might apply
o Restatements are product of many lawyers that write out an attempt to restate case law in a manageable way in an effort to state common law
– Treatises and hornbook
o Treatsies- encyclopedia of law
o Hornbook- one volume from scholars on subject.
The Offer (what is, and is not, and offer) form of commitment to someone else.
Offer is: manifestation of willingness to enter into a contract in such a way that the other party, the offeree, knows that assent is all that is necessary to cement the deal.
– Firm Offer UCC S2-205
An offer by a merchant (car dealership, business) to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated for a reasonable time, but in no event may such period or irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.
– A merchant’s offer in a signed writing that promises to keep it open for a stated period is irrevocable for up to three months under UCC 2-205, the “firm offer” rule (handout). No consideration is needed.
o EXCEPT, see below. Not for land.
– Sonia (S) is a realtor living in Benton Harbor. Brian (B) works in nearby Kalamazoo. S had met B recently at a July 4th party. On Monday, July 10, S faxed the following to B: “After we talked the other day, I got a listing for the perfect property for the cabin you want to build. The property has frontage on Lake Michigan; it is secluded and quiet; and the price is fantastic – only $2,000 for a 1 acre lot! The address is 50 Lake Front Dr., Benton Harbor. I can’t hold this offer open for you long, but I’ll hold it open for you until Wednesday, July 12, at 5:00 p.m., or until you reject it, whichever comes first. I promise I won’t offer it to anyone else before then. s/S.” On July 12 B e-mailed the following to S: “S – I agree to buy the acre lot for $2,000. Thanks for looking out for me.” The email arrived in S’s mailbox a few seconds later, but S did not read it until after 5:00 p.m. on July 12. Was S obligated to offer the land exclusively to B until 5:00 p.m. on July 12?
o Yes, if B gave her something in consideration for doing so.
§ The UCC does not apply to a contract for the sale of land. But the offer would remain open as an option contract if consideration were given to keep it open. Note at p. 82.
– The UCC applies because cherries are goods. This was a firm offer, and generally the offeror is required to hold the offer open for the time stated. However, an exception to this rule occurred here, when there was a rejection and the offereor relied on the rejection. Problem 28(4), p. 100.
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– Introduction to Mutual Assent
o All about manifestation. Outward manifestations.
o If it is presented as serious and perceived by other as serious, that’s all that matters. If one party is joking it doesn’t matter.
– Social and domestic agreements
o Social invitations are generally regarded as not contracts. More like social obligations. These will not stand up in court.
o Domestic agreements within the family are not regarded as contacts.
– Statements of opinion or intention
o Are just that
– Solicitations
o These are not contracts. They are generally not specific enough and appeal to a broad audience.
o Newspaper adds for rewards for criminal apprehension can be considered unilateral offers.
§ an offer of a reward is a clear-cut offer of a unilateral contract.” Davis v Jacoby, at p. 64.
– Written contract to follow
o Did the participants intend to have a written contract after negotiations to seal the deal?
o Pennzoil v. getty oil. Largest lawsuit in history, no one signed forms.
WEEK TWO
Acceptance (the effects of various modes and mediums of assent)
Acceptance is: manifestation of assent to the terms made by the offeree in a manner invit
eated is conditional on completion or tender of the invited performance in accordance with the terms of the offer.
o Ambiguous and indifferent offers. In case of doubt is bilateral (notes)
§ Offeree chooses based on restatement §32. Whether they want bi or unilateral.
§ §32 invitation or promise to perform
· In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering performance, as the offeree chooses. Davis v. Jacoby
o Whatever the offeree chooses decides whether unilateral or bilateral.
– Mary, who was about to leave on a business trip, told John that she would pay him $1000 to put a new roof on her house while she was away. Mary’s offer did not require any particular manner of acceptance. Mary told John that he could decide after she left. The day after Mary departed for London, John began the work. Before completing the job, John accepted an offer to re-roof the White House (there were several leaks) and abandoned Mary’s job. Mary hired Acme Roofing to complete the work for $1500 and brought suit against John. What result?
o (B) Mary will prevail because the beginning of performance by John constituted a promise to finish the work and thus was an acceptance of Mary’s offer.
(C) Mary will prevail because under the modern analysis of mode of acceptance, a doubtful offer is construed to permit acceptance in any manner which is reasonable under the circumstances.
§ Because the offer was not clearly unilateral, Restatement sec. 45 (Choice A) doesn’t apply. Rather, sec. 32 (Choice C) and sec. 62 (Choice B) combine to form a contract once John begins performing (which was the preferred answer to Problem 18, p. 66).
