contracts

Question 1

What is a contract (K)?

Answer 1

An agreement b/w two or more parties with legal effect

Question 2

Mutual assent

Answer 2

“meeting of the minds”- intent to be bound

Question 3

Building blocks of a contract?

Answer 3

offer
acceptance
consideration (legal effect)

Question 4

what is an offer?

Answer 4

Offer is the manifestation of intent to enter a bargain by words or conduct,

Question 5

Analysis: is there an offer?

Answer 5

• Can be accepted by the party to whom communicated
• Must be communicated
• Both parties must manifest content

Question 6

what can terminate an offer?

Answer 6

• Death of incapacity
• Rejection from the offeree
• Lapse of time
• revocation from offerer

Question 7

What are NOT consider an offer?

and what are the exceptions?

Answer 7

ads
circulars
form letters

Exceptions (look at the language):
“First come, first serve”
“While they last”
Subject to proof of sale
Reward offer- only typically for one person
-public policy (e.g. “bait/switch)

Question 8

termination of the offer by rejection?

Answer 8

Offeree rejects offer

Question 9

counteroffer

Answer 9

an offer terminates the initial offer and presents another offer

Question 10

common law- mirror image rule

Answer 10

acceptance must mirror offer- otherwise offer response is a counteroffer

Question 11

grumbling acceptance

Answer 11

a compliant about the offer
-“the price is too high”
-“Cant afford to pay that”
does NOT terminate the offer

Question 12

inquiry

Answer 12

asking the offeror about changing the price of the offer-

This does NOT terminate the offer

Question 13

termination of the offer by revocation?

Answer 13

by the offeror-
an offer can be revoked at anytime before acceptance and must be communicated

anytime before acceptance- even if offeror says offer is to Remain open

Question 14

comparable medium

Answer 14

use the method of communication

-some room to differ

Question 15

Bilateral K

Answer 15

promise for promise- RESTATEMENT 2d 87- reliance

Return promise may inferred from beginning or preparation for performance

notice: is not require
performance is accepted

Question 16

Unilateral K

Answer 16

promise for a performance- RESTATEMENT 2d 45

Pomissor not bound until promisee performs
Promissee never became bound to perform (no “mutuality of obligation”)

If offeror seeks performance and offeree has tendered or began performance offeror, it cannot be revoked

notice is not required
but when in a reasonable time after completetion

Question 17

acceptance

Answer 17

Manifestation of assent to the offer

Question 18

acceptance in Bilateral K

Answer 18

notice is required

Beginning performance is OKAY for acceptance

Question 19

acceptance in Unilateral K

Answer 19

Generally not required—-EXCEPT if performance will not quickly come to offerors attention, offeree must notify within a reasonable time after completing performance.
Offer is accepted when performance is completely accepted

Question 20

Option Contract (K)

Answer 20

A Contract with consideration Given to have offer left open-
Generally but not always money

Question 21

Silence is…?

Answer 21

is NOT acceptance

General rule: offeror dictates terms of the offer but cannot have silence as acceptance unless agreed upon

-Offeree may be bound by other principles:
Dominion and control- using as the true owner
Pattern or practice- repetition of practice
Agreed silence- keeping for a trial use and not cancelling

Question 22

Mailbox rule?

Exception?

Answer 22

General rule: acceptance is effective when it is mailed, Must be reasonable means and properly mailed
EXCEPTION: “Must be rec’d by”
NN: effective even if it never received by offeror

exception: Offer says, “I must receive it by” or Effective when received

Question 23

Vacillating offeree
Example 1:
Acceptance mailed 
Rejection sent (mailed, fax,etc)
Rejection rec’d
Acceptance rec’d

Answer 23

If offeror relies on rejection- offeree is estopped from asserting mailbox rule(stating there’s K)- NO K

Offeror has the option to choose K or no K

Question 24

Vacillating offeree
example 2
Acceptance mailed
Rejection sent
Acceptance rec’d
Rejection rec’d

Answer 24

Mailbox rule applies-there a K

Question 25

``` Vacillating offeree example 3 Rejection mailed Acceptance mailed Rejection or acceptance rec’d ```

Answer 25

Mailbox rule does not apply- first to arrive

Question 26

exceptions to an offer can be revoked at anytime before acceptance

Answer 26

Option K Firm Offer Unilateral k Sub- contractor/General K

Question 27

Bid shopping

Answer 27

GK seeking lower bids from other SK after award of open K- SK is bound,GK is not -SK has an argument GK did not accept in a reasonable amount of time

Question 28

Bid chopping

Answer 28

GK seeking lower price from SK SK: GK response was a counteroffer that terminated SK offer

Question 29

UCC 2-205- K

Answer 29

An offer by a merchant to buy or sell goods in a signed writing by its terms gives assurance that it will be held open and it will not be revocable for lack of consideration during the time stated or if no time stated for a reasonable time, but in no event may such period of irrevocability exceeds 3 months.

Question 30

Unilateral K- RESTATEMENT 45

Answer 30

Once the offeree begins or tenders performance the offeror cannot revoke

Question 31

Subcontractor/generalcontractor

Answer 31

GK relying on SK bid in the offer Reliance on offer Bilateral K Offer which the offeror should reasonably expect to induce reliance before acceptance and substantial reliance induced enforceable to the extent necessary to avoid injustice Offeree must reasonably rely (variance)

Question 32

2-207- Acceptance of offer (battle of the forms) Subsection 1

Answer 32

A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time under subsection 1 operates as an acceptance even though it states terms additional to or different from those offered or agreed upon. - UNLESS- acceptance is expressly made conditional on assent to the additional or different terms

Question 33

2-207- Acceptance of offer (battle of the forms) subsection 2

Answer 33

(2) The additional terms are to be construed as a proposal for additional to the contract. Between merchants such terms become part of the contract UNLESS: 1. the offer expressly limits acceptance to the terms of the offer (look at the language) 2. They materially alter it (hardship or surprise); or 3. Notification of objection to them has already been given or is given within a reasonable time after notice of them is rec’d

Question 34

2-207- Acceptance of offer (battle of the forms)

Answer 34

207 (3) Conduct by both parties recognized existence of a K is sufficient to establish K, for sale although Mixed goods/service K

Question 35

Test: K predominantly for goods(UCC) or service(CL)

Answer 35

Factors: -Language - Nature of business - Intrinsic value of materials greater cost alone is not sufficient enough

Question 36

agreement to agree

Answer 36

Postponed bargaining or indefiniteness

Question 37

Clickwrap

Answer 37

Must click “I agree” to use software, access programs, etc

Question 38

Browsewrap

Answer 38

- Use of the site is agreement to terms - Not required to “accept” - Terms and conditions not readily apparent to the user

Question 39

Shrinkwrap

Answer 39

Sellers terms and conditions are inside package once product is purchased and opened Keeping product usually indicates acceptance of terms

Question 40

Consideration

Answer 40

= legal effect to the contract- You can’t get something for nothing

Question 41

Bargain for exchange- R2d 71

Answer 41

a performance or return promise bargained for if its sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise (DEFAULT)

Question 42

Consideration analysis- bargain for exchange r2d-71 four parts- if one or more is missing then its not considereration

Answer 42

1. What is the Promise by promisor? 2. Promise or performance sought by promissor?- 3. Promise or performance/forbearance by promisee? 4. In exchange for promisor's promise?

Question 43

Bargaining

Answer 43

consideration is present and thus you have an enforceable promise

Question 44

Gift with condition attached

Answer 44

gratuitous promise- generally unenforceable-

Question 45

Benefit test: benefit to promisor?

Answer 45

If benefit is to the promisor, the inference is that the promise or performance was bargained for. If no, inference is that promise or performance is conditioned to receipt of gift

Question 46

past consideration

Answer 46

not consideration AT ALL! Performance occurred before promise and thus not bargained for- if no consideration , then UNENFORCEABLE May constitute as gratuitous gift

Question 47

Forbearance as consideration

Answer 47

forbearing someone from doing something they can legally do 1. Genuine disputed and 2. P asserted claim in good faith The court will uphold the agreement to s

Question 48

Performance to third party and not promisor

Answer 48

Buyer is still liable to the seller even though the seller performed to a third person

Question 49

“Peppercorn theory”-

Answer 49

the value of the consideration Virtually anything can serve as consideration if bargained for Courts generally do not inquire into the adequacy of consideration Gross inadequacy may be evidence of fraud, duress, etc Treated as no consideration

Question 50

Illusory promises

Answer 50

not enforceable promise- being able to end at anytime- no time stated Promissory language but party not bound party has complete discretion

Question 51

Illusory promises- three contexts exception:

Answer 51

1. Terminations clauses Exception: if notice is required- its not illusory At will employment will be enforceable 2. Distributorship A gives B exclusive right to market goods, B promises to do so but no time stated 3. Output contracts Output (requirement K’s) Historically, illusory because no stated amount Today, governed by UCC good faith provision exception: NN: not illusory if notice requirement Exception: at-will employment K

Question 52

Promise v expression of future intention

Answer 52

Ex: “ I will give you car” “We intend to employ 200 workers” Look at context & why its being used Circumstances and context

Question 53

Implied promise

Answer 53

does not need to be expressed- Promise can be inferred from conduct- Havey v Dow

Question 54

Promissory Estoppel

Answer 54

enforcing the contract without consideration- promise is foreseeably relied upon Unbargained for reliance on a promise Relied on detriment for one party Application: family and social setting Most likely commercial setting to lesser extent Consideration analysis and Promissory estoppel arise from the same fact

Question 55

From equitable estoppel to promissory estoppel

Answer 55

Historic view- gratuitous promises are unenforceable, even if relied upon Equitable estoppel-remedy for representation of fact relied upon Example: party represents that she owns the show business even though she does not Party’s promise is enforceable NOV(stopped from stating) no consideration bc reliance upon estops her from asserting no consideration

Question 56

Promissory Estoppel -R2d 90

Answer 56

1. A promise by promisor 2. promise reasonably expect to induce action or forbearance on the part of the promisee or a third person 3. promise induced such action or forbearance 4 enforcement of promise is necessary to avoid injustice

Question 57

Promissory Estoppel- Rest 90

Answer 57

1. A promise by the promisor 2. promisor reasonably expect promise to induce definite and substantial action or forbearance (reliance) 3. Promise induced action or forbearance 4.enforcement of the promise necessary to avoid injustice (Discretionary)

Question 58

Charitable pledges

Answer 58

R-90- charitable pledge enforceable w/o proof of reliance Not widely adopted Analysis starts with consideration or promissory estoppel Generally, gratuitous promises- No bargaining Is a pledge gratuitous promise w/ condition attached or bargain for exchange E.g A says to B: “ Im donating $30M for a building to be named in my honor.” Benefits test: Gift with condition- condition of just putting the name on the building Is A getting a benefit from having her name on the building? Argue both sides

Question 59

Promissory estoppel in a commercial context do the same promissory estoppel analysis

Answer 59

Expanded to commercial setting mainly applying to employee benefits and pensions- previously given as a gift in the past same promissory estoppel analysis

Question 60

Restitution

Answer 60

avoidance of unjust enrichment- a party is unjustly enriched at another's expense required to make restitution Recipient who knew provider of service expects to be paid is liable for reasonable value The services are generally unrequested Service is presumed to be gratuitous if its an emergency Presumption is rebutted if the service Is professional Unduly burdensome

Question 61

Restatement of restitution 2d 116

Answer 61

116: one who provides services to another without knowledge or consent is entitled to restitution if: Person acts unofficiously (-MUST BE NECESSARY- objectively aggressive in offering unrequested services) and with intent to charge Services necessary to preserve HEALTH OR LIFE No opportunity to obtain consent and No Reason to believe consent would not have been given

Question 62

Restatement of restitution 2d 117

Answer 62

117: one who provides services to another without knowledge or consent is entitled to restitution if: Person acting officiously and with the intent to charge Services necessary to preserve ANOTHER’S PROPERTY No opportunity to obtain consent No reason to believe consent would not have been given Person in lawful possession of property Services not made necessary by breach of duty Services accepted by other party

Question 63

Restatement of restitution 3d 20

Answer 63

20- a person is entitled to restitution as necessary to prevent unjust enrichment if: That person performs, supplies, or obtains professional services Required for the protection of another’s life or death If the circumstances justify the decision to intervene without request Unjust enrichment measured by a reasonable charge for services

Question 64

Restatement of restitution 3d 21

Answer 64

21- a person is entitled to restitution as necessary to prevent unjust enrichment if: That person acts to prevent another’s property from threatened harm If the circumstances justify the decision to intervene without request and It is reasonable to assume the owner would want the action performed Unjust enrichment is measured by the loss avoided or by a reasonable charge for services

Question 65

Benefit to recipient vs Value of services

Answer 65

e.g - A is admitted to the hospital but is unconscious and dies w/o regaining consciousness Did A benefit from the services? NN: the court may impose liability on A’s estates based upon the reasonable value of services rendered by hospital

Question 66

Restitution where no relationship b/n parties

Answer 66

Owner- no liability to SK if GK is paid (courts are split on partial payments) - NO contract with subcontractor - Contract with General contractor General Contract with subcontractor and owner

Question 67

Mechanic's lien statute-

Answer 67

statutory encumbrance (burden) against real property for the value of improvements to the property All jurisdictions- statutory requirements must be met If met, O may have to pay 2x Lien waiver: O obtains SK’s written waiver of right to file lien vs property BF paying GK

Question 68

Express K: based on the words- intent and mutual assent Implied in fact k: based on the conduct (manifestation)- intent and mutual assent Implied in law K (quasi-K): remedies imposed by court to do justice- intent & mutual assent NOT required

Answer 68

Express K: based on the words- intent and mutual assent Implied in fact k: based on the conduct (manifestation)- intent and mutual assent Implied in law K (quasi-K): remedies imposed by court to do justice- intent & mutual assent NOT required

Question 69

Restitution in the family

Answer 69

Benefits by family presumed gratuitous presumption can be overcome E.g offspring caring for parents