Section 1
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Communication to offeree
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Last updated
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Date created
Mar 1, 2020
Cards (88)
Section 1
(50 cards)
Communication to offeree
Offeror must communicate to offer to offeree for them to be allowed to agree
Definiteness standards under Common Law
they don't like the ambiguity, don't want to fill in gaps. Unlikely that an agreement that leaves open ended aspects of a transaction will be enforced
Offer needs
1) Intent to contract 2) Definiteness of terms 3) Communication to Offeree
Owen v Tunison
Fact: Owen wanted to buy Tunision's property for 6k, Tunision said I wouldn't sell it unless I got $16k. Owen send him a check and acceptance. Tunision said that he wasn't ready to sell Issue: Did they already have a contract? Result: No. Tunision wanted to open negotiations but hadn't extended an offer yet. No intent of an offer. Reason: This was an opening for negotiations, not an extension of a contract
Armstrong v Rohm and Hass
Issue: Rohm and Hass have acquired this new business, issue that employees can either get severance pay or keep job. Armstrong took severance pay after a manager told him it would be better so he can start own business, that manager would send them "all the business they could handle". Turns out that they didn't send them much business Issue: was this "all the business they could handle" a contract? Result: No, terms were never definite. Reason: This is a service and doesn't fall under UCC
Ads as contracts
not considered an offer, only an offer if they have a required special performance or clearly indicated an immediate action by the buyer creates a binding an agreement. Ex, gives specific time, date, place, price/deal, limitation (first come, first serve)
Basic elements of a contract
1) Agreement (voluntary, with offer n acceptance) 3) Consideration 4) Capacity to contract 5) Legality of the objective and performance
Rejection
1) explicit rejection 2) counteroffer
Bids as contracts
generally treated as an invitation to offer. The ppl submitting bids are the offerors. Can withdraw bid anytime before acceptance. Offeree can reject/accept any bid. However, terms of the ad for bid can change that. Aka if the "lowest bid" will be accepted, than the lowest has to be accepted unless it can be proven that bidder is "not responsible"
When is a rejection effective?
When the offeree receives the rejection
bilateral contracts
both parties exchange promises and the contract is formed as soon as the promises are exchanged. Company A promises Company B a box if Company B gives it a lock. Tit for tat
void contracts
agreements that create no legal obligations
Terms up for offer
no always everything signed in this day of length contracts. Like the fine print stuff may not actually be enforceable. "Reasonable person should be aware" -depends on the type of contract.
unilateral contracts
only one party makes a promise. Exchange of a promise for an act. Like frequent buyer cards where you get a free coffee after 10 drinks
Unconscionable contract
a contract that is grossly one sided or unfair first in UCC law`
Eleemosynary
charity
standardized form contracts
contract preprinted by one party to be signed by another. popular now
Unjust enrichment
the house painting and the franchise products. A matter of law a promise by the benefited party to pay a reasonable value (quantum meriut) of the benefits he received. This is a quasi contract. Has to have knowledge.
Uniform Commercial Code
uniform set of rules about the laws governing the sale of goods -->Article 2 *less about reasonable person would do and more about what ppl really do in the market *has the unconscionable contract *distinguish between merchant and regular seller
Lucy v Zehmer
Fact: Lucy wanted to purchase Zehmer's farm. Once when Zehmer's drunk and they're at a bar he manages to get Zehmer and his wife to sign it over to him. Later they regret it and said that they thought it was just for jest Issue: Do they have a real contract Result: Yes Why: Intent wasn't real objectively base on actions. Reasonable person would have believed they made a contract
Leonard v Pepsico
Fact: Pepsi had an add that claims if you get XX points you can even win a jet. Leonard manages to get that many points but Pepsi said the jet wasn't really an offer but just an add boast. Issue: was the ad an offer Result: No it wasn't Reason: objective reasonable person would not conclude that Pepsi would give them a Jet for that claim. Intent of the offer wasn't there
When is a revocation effective?
When the offeree receives the revocation
Auctions as contracts
they are generally treated as an invitation to offer. They make an offer that can be accepted/rejected. If the top bid is too low, they are allowed to withdraw the offer. Only if it's offered as "without reserve" must they accept the highest bid, no matter how low.
options
*Exception to revocable rule separate contract in which offeror agrees to not revoke offer for stated time in return for some consideration
quasi contracts
unjust enrichment or implied contracts. Needs some misrepresentation/knowledge.
Time to accept
"reasonable person" unless stated as contract time
expressed contracts
obligations and rules clearly stated
Exception to revocable rule
1) Options: separate contract in which offeror agrees to not revoke offer for stated time in return for some consideration 2) firm offers: merchant makes written offer to buy/sell goods, giving assurance that the offer will be held open (ONLY FOR GOODS). Doesn't need consideration 3)Unilateral contract offers: can't revoke while someone is in the middle of the performance/act. "I'll pay you $25 if you mow my lawn", some courts is that when offeree starts performing than contract in effect 4) Promissory estoppel: offeree foreseeably and reasonably relies on offer being open and will suffer injustice if revoke
voidable contracts
one or more parties have the legal right to cancel their obligations under the contract
Mill Creek v Jackson Foundation
Fact: Mill Creek designed something for Jackson, Jackson never accepted/decline but ended up hiring the designer themselves. Mill Creek billed them the hours that the designed had worked for them. Jackson didn't want to pay. Issue: Did they had a quasi contract? Result: Yes Why: They went on to use the designer's designs, so they received unjust value from Mill Creek.
Termination of contract
1) rejection and counter offer 2) Time: stated or implied 3) Revocation 2) death or insanity of either party 3) destruction of subject matter prior to acceptance 4) Intervening illegality - performance contract proposes is illegal
Hold vs Home Depot
Fact: Holt was a manager at a Home Depot and was told in worker's manual that workers can complain about supervisors. He had issues with supervisors and complained. He got fired for it. Issue: Did he have promissory estoppel Result: Favor of Holt Why: because he relied on the info that he can complain, HD made the promise he could complain about supervisor and he suffered an injustice because of it. HD should have known
restatement of contracts
2nd time common law of contracts edited, includes some stuff from UCC. Like inconceivability and good faith
Promissory Estoppel parts
*promisor should forsee is likely to induce reliance *reliance by the promisee *injustice as a result of the reliance
objective theory of contracts
offeror's intent will be judged by objective standards = his actions and words
unenforceable contract
meets the basic legal requirements of a contract but can't be enforced because of some legal rule. - like fraud, it should have been in writing, etc
Rewards as contracts
they are treated generally as unilateral contracts. However, some places say you need to have knowledge of the reward to get it.
UCC and hybird goods
a contract involving goods and services. Use the predominating product. it is either mostly a good or mostly a service
executed contract
contract is fulfilled and everyone has done their duties
Firm offers
*Exception to revocable rule *merchant makes written offer to buy/sell goods, giving assurance that the offer will be held open (ONLY FOR GOODS). Doesn't need consideration Rules: *must be a merchant *must be in signed writing *gives assurance that the offer will be kept open if it doesn't follow rules, than it's general common law and is revocable at any time
Freedom of Contract
Belief that contracts should be fully enforced since they are the product of the free wills of their creators and they should, within limits, be able to determine their obligations. Now courts dont really follow this since there is larger disparities in power between say orgs and their employees.
Must a contract be in writing to be enforceable?
No. Can be oral. Unless the law specifies that it has to be written it can't be oral.
Are offers Revocable?
Yes a general rule. Offerors as the master of the offer can revoke anytime before acceptance, even if they promised to hold the offer open for a stated period of time
executory contract
contract is in process, obligations still unfulfilled
promissory estoppel
A person rely on the promise made by another even though the promise and circumstances are not good enough to say it was a contract. Grandfather's note.
Purpose of contracts
risk allocation certainty
Quantum Meruit
"reasonable value" of unjust earnings. Part of quasi-contracts
implied contracts
when the facts and circumstances indicate that an agreements has been made
Lambert v Barron
Facts: Lambert and Barron were friends. Lambert helped Barron on some legal/business issue. Lambert expected to be paid at his normal rate, Barron wasn't having it and let him know. Lambert sues for breach Issue: Did they have a contract Result: No they didn't Reason: Friend helping friend, there was no acceptance of a contract on Barron's part. No agreement
Definiteness standards under UCC
can tolerate more ambiguity, has "gap-filling" rules. Can fill in gaps in 1) quantity, 2) delivery 3) price 4)time of payment when left open by parties. Intention is at the heart, it they were unable to come to terms than no contract. The selling of the festival concession stand. Promise to buy that stand but never signed but operated as if they did.
Section 2
(38 cards)