CONTRACT LAW I
Workings of the Government
Authorities
I. Legal Authority
Primary Authority Secondary Authority
(the “law”) (not the “law”)
constitutions restatements
statutes treatises
case law (precedent) periodicals
court rules encyclopedia
administrative rules ALR annotations
II. Contract Authority
1. Precedent-Law- Case Law (by courts)
2. Restatements- not the law- but highly persuasive
3. Statutes-Law- U.C.C.-(By State Legislature
a. The Uniform Commercial Code- began to be enacted state to state in 1953
b. Definition of Goods
4. Treaties-Not the Law- But Persuasive
a. Murray on Contracts
b. Calamari & Perillo on Contracts
c. Farnsworth on Contracts
d. White & Summers (Uniform Commercial Code)
What is a Contract?
Offer +Acceptance (Mutual Assent) +Consideration=Contract (O+A+”C”=K)
Contract:Is a promise that the law enforces
Preliminary negotiations- are hypos such as would you do this if I do this?
Offer- A “yes-able” proposition which includes Communicated, Commitment, and Definite terms, this is an affirmative of acceptance and language.
Communicated- must be communicated to the offeree(not necesserialy by the offeror). This happens in the private setting. If offer has not be communicated there can be no mutual assent.
I. 4 things that must be Communicated
1. Offer
2. Acceptance
3. Revocation
4. Rejection
Commitment- There needs to be a commitment to enter into contract. Must be established, by affirmative language. If there is an ambiguity in a written contract it will be construed in favor of the person who did not draft the contract.
Definite terms- Needs to specify definite term(s) in the offer. ‘The Mirror Image Rule’- All of the particulars that often lay out must be accepted by the offeree in order for the terms to be definitive.
1) Definite nature of the way K will be performed
2) Price of compensation to be given must be indicated.
3) The quantity on the amount at issue must be included.
Acceptance- An offeree’s assent, either by expressed act or implication from conduct, to the terms of an offer in a manner authorized or requested by the offeror, so that a binding contract is formed. The elements of acceptance are: Communicated, Absolute and Unequivocal, and Responsive.
Communicated-
Absolute and Unequivocal
Responsive- Does it meet the terms of the offer?
Mutual Assent (O+A)- At its most fundamental level contract law requires of intent by 1 party to present an opportunity to another (offer) and a response by the other party, which responses reflects concurrence in that expression (acceptance).
Common Law: Meeting of the minds of all or both parties to a contract. They each agree to all of the terms and conditions, with the same sense and same meaning as the others.
Consideration- Bargained for benefit to the Promisor or detriment to the Promisee that has legal value
Types of Contracts
Express contract (written or oral)- it is in the form of an offer and acceptance.
Implied-in-fact contract-
Implied-in-law contract- are created by the courts, it is a tool of equity, it is a legal fiction to make sure there is an equitable result
Formal:
Writ of covenant at common law- was used as a contract under seal. The seal was wax containing the signature of the promisor.
Recognizance- to go to court voluntarily to acknowledge he owes creditors a certain amount of money, this was apart of public record.
The Negotiable instrument- is i.e. a check “pay to the order of”
Informal:
Elements will comprise a checklist of rules to evaluate if there is or not a contract. Each of the elements of O+A+”C”=K exist.
Unilateral contract- provides a promise for an act or a forbearance to act. 1 promisor- a promise for an act or non-action. A promise is being made by 1 person and “x” will be given.
Bilateral contract- 2 promisors and 2 promisees. In a traditional bilateral contract there is an exchange of mutual assent.
Intent to Contract: Offer and Acceptance
I. Mutual Assent
A meeting of the minds where the offeror and the offeree agree on definite terms.
I. Lucy v. Zehmer
Law: “We must look to the outward expression of a person as manifesting his intention rather than to his secret and unexpressed intention.”
1. So, it does not matter what is not expressed in a contract all that matters is the definite terms that both parties agree to.
II. Stepp v. Freeman
a. This was an implied-in-fact contract in which there were definite terms that all of the group members understood.
b. There was a breech because the offer to be in the group was established and P accepted this offer by participating and contributing(mutual assent), and also consideration
c. Since D just decided by his-self that the D was no longer
made by the offeree in a manner invited or required by the offer.
(2) Acceptance by performance [uni-k] requires that at least part of what the offer requests be performed or tendered and includes acceptance by performance which operates as a return promise.
(3) Acceptance by promise [bi-K] requires that the offeree complete every act essential to the making of the promise.
I. Beard Implement Co. v. Krusa
D turned out to be the offeror, because sale was dependent on the P’s acceptance (offeree). So, since the offeror revoked the offer before the offeree accepted it there was no contract. And this was even said in the language of the contract under where the P was supposed to sign.
1. Always look at the language 1st of a contract. If not then refer to the subsections in Section 2-206.
A. OFFER
2-205 Firm Offer: to be discussed in connection with when contracts are irrevocable
2-206(1)(a) Any manner and any medium reasonable under the circumstances
ACCEPTANCE
2-206(1)(b) PROMPT PROMISE TO SHIP OR BY PROMPT OR CURRENT SHIPMENT OF CONFORMING/NON-CONFORMING GOODS
2-207 Battle of the Forms: to be discussed in contrast to common law counter-offer
B. Revocation: An annulment, cancellation , or reversal; Withdrawal of an offer by the offeror.
II. Fujimoto v. Rio Grande
A. U.C.C. uses gap fillers. So, even if the parties fail to find information the UCC will look to those gap fillers to fill in the gaps.
B. You can accept an offer through an act or a promise. Regards to the communication you notify the offeror verbal (orally or in writing) or non-verbal (actions).
I. Corbin on acceptance
1. offeror can specify how to accept in any language or manner
2. offeror can specify in any manner without making it exclusive
if it is not clear of the mode or doctrine we must refer
