contracts 1 schooner_3.doc

8/20/2019 Contracts 1 Schooner_3.doc

1/23

CONTRACTS- Professor Steve Schooner Fall 2004

I. ENFORCING PROMISES: BASIS OF LEGAL OBLIGATION

A. INTENTION TO BE BOUND

Promise is a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee inunderstanding that a commitment has been made. §2

1. OBJECTIVE THEORY OF CONTRACTS

A. Mutual A!"t: Voluntary agreement by both parties, usually reached through O and A; “#!!t$"% &' t(! #$")*

B. O+,!-t$! T(!&/0 &' C&"t/a-t I"t!"t$&" t& +! L!%all0 B&u") (§21

Neither real nor apparent intention that promise be legally binding is essential to the formation of a K, but a

manifestation that a promise shall not affect legal relations may prevent the formation of a K.

• TENTY BISHOPS (!earned "and: #$en if a group of really honest people determine what A said when he signed

agreement, it%s not rele$ant&only rele$ant what document says

• Objecti$e intent important ' reasonable interpretation of words actions ( Eurice

o Lucy v. Zehmer ' despite setting, past dealings between parties made it reasonable for buyer to belie$e th

the seller was serious and seller should ha$e )nown thiso Leonard v. Pepsico' no reasonable $iewer could ha$e understood that jet plane shown in ad was serious

offered as a premium for purchase of *%s soft drin).

• #+ception' don%t want to uphold s in certain situations (e.g., fraud, duress, mutual mista)e ( Park 100

• -ote' may be heightened standard of selfprotection if better bargaining power ( Eurice

• ADVAN' /ormality encourages personal resp., easy to enforce, definite reliable terms, pre$ent hindsight regret

• DISADV' 0ower to words so fa$ors sophisticated client, not always consistent w1 meeting of mind so may

compromise pri$ate autonomy

Ray v. William Eurice & Bros., Inc

Pla0!/ 2: #ngineer *: 3uilder

Fa-t *,e+perienced builders, signed e$ery page of w1o reading (had they read there were clear references to differentspecifications; * helped 2 fill out form using the

C&u/t 4nilateral mista)e of “easy going hatchet and saw manner5 of ** is bound to signed' clearly e+pressed and unambiguous intent in writing* must pay the e+cess cost to put 2 in position had * completed bargain (e+pectation damages

Rul! • T(! t!t &' a t/u! $"t!//!tat$&" &' a" &''!/ &/ a--!ta"-! $ "&t 3(at t(! 4a/t0 #a5$"% $t t(&u%( $t #!a"t &/

$"t!")!) $t t& #!a"6 +ut 3(at a /!a&"a+l! !/&" $" t(! &$t$&" &' t(! a/t$! 3&ul) (a! t(&u%( $t #!a"t.

• A a/t0 $ +&u") t& a $%"!) )&-u#!"t a+!"t '/au)6 )u/!6 a") #utual #$ta5!.

N&t! "ad both made a mista)e, there would ha$e been mutual mista)e and li)ely no . "ere * may be held to higher standard b1c they are e+perienced builders

Park 100 v. ar!es

Pla0!/ 2: !essor *: !essee

Fa-t * signed personal guaranty agreement: 2 rep. said they were “lease papers5, said they had to sign, they were on the way todaughter%s wedding (so had little time to read, 06 had ne$er been discussed before. 2 did not read the papers, instead calletheir attorney in front of 2 who said he had o)ayed the lease papers.

2 argued not material rep. b1c 06 are usually included and could say * did not reasonably rely b1c should ha$e read (la7y

C&u/t 06 papers were signed under fraudulent means b1c a (8 material representation, (9 which was false, ( was made w1)nowledge, ( was relied upon by complaining party and (


2/23

B. OFFER AND ACCEPTANCE Evalua!e "hen:

a. >ontract formation is in dispute b. @hen terms included in are in dispute

Promise v. o##er : Offeree has power to bind offeror; nothing binding in promise&need something e+changed

A. B$lat!/al C&"t/a-t1. DEFINED: #+change of promises&each party ma)es promise of future commitment

2. OFFER :a. O''!/ 8§ 29 anifestation of willingness to enter into a bargain made so that the other person understands that his

assent is in$ited will conclude the bargain

• RE;UIREMENTS

8. >ommunicated9. >ontains all significant terms1details. Bndicates a desire to enter into a . Cirected at some person or specific group of peoplelear that a will arise w1o any further appro$al being reEuiredF

•EVALUATION (with obj. std.: language of offer, relationship of parties, common practice1trade usag

+. P/!l$#$"a/0 "!%&t$at$&" 8§ 2GBV# 40O- =#>#B0G

• Offer can be re$o)ed at any time before it is accepted unless option

• Mut +! -#u"$-at!) (indirect re$ocation may be sufficient § 9 ( -ormile

o Offer terminated when offeror ta)es definite action inconsistent w1intention to enter into proposed

o Offeree must ha$e acEuired reliable information to that effect

d. Ceath1Bncapacity of Offeror1Offeree


3/23

9. ACCEPTANCEa. A--!ta"-! &' O''!/ D!'$"!) 8§ =

8. anifestation of assent to offer terms made by offeree in a manner in$ited or reEuired by offer . Acceptance by a promise reEuires that the offeree complete all acts essential to the promise (bilateral

+. N!-!$t0 &' A--!ta"-! Cl0$"% 3 T!/# 8§ =>

-. T$#! (!" A--!ta"-! Ta5! E''!-t 8Ma$l+& Rul! 8§ # CBI0AG>"#C

• Coesn%t matter if it e$er reaches offeror

). Ot$&" 7

• Acceptance effecti$e upon receipt (no need to protect against re$ocation

!. B0 S$l!"-! &"l0 3(!": 8§


4/23

• 8st =estatement pro$ided that when doubt between 9, the law concluded that it was bilateral ' wanted to add

certainty when ambiguous. Ghought they were doing offerees a fa$or, but, then the offeree is stuc) (if can%tcomplete performance, he is liable for damages.

• §2 ' protects offerees by gi$ing them the option

. OFFER • K9D Bllustration 8' clothing merchant ad$ertising o$ercoats is an in$itation not an offer. Bf add words “out the

go Iaturday; /irst >ome /irst Ier$ed5 might ma)e the ad$ertisement an offer. /irst people who are there canma)e the argument that there was an offer. Otherwise, you ha$e no power.

• K9D Bllustration 9 ' Ad$ertises that will pay < for e$ery copy of a certain boo); offer until re$o)ed

9. ACCEPTANCE OF UNILATERAL OFFER a. Cla$-al V$!3: 4nilateral offer can be re$o)ed any time before complete performance ( Pe!erson

+. M&)!/" V$!3

• A--!ta"-! +0 P!/'&/#a"-! § =82: Acceptance by performance reEuires that at least part of what offer

reEuests be performed or tendered includes acceptance by a performance which operates as a return promise

• Ot$&" 7 A/$$"% &" Pa/t P!/'&/#a"-! 8§ 9= 82ook

(8 @hen an offer in$ites an offeree to accept by rendering performance and does not in$ite a promissory acceptance, an option is created when offeree tenders or begins the in$ited performance. By commencin+, o##eree holds op!ion open 'u! no! 'ound.

(9 Ghe offeror%s duty of performance under any option contract so created is conditional oncompletion or tender of the in$ited performance in accordance with the terms of the offer. We are payin+ #or resul!s no! e##or!.

N&t!: 0reliminary preparations don%t count

Pe!erson v. Pa!!'er+

Pla0!/ 2: #+ecutor

*: "older of ortgageFa-t M has a . ENFORCING ECHANGE TRANSACTION: DOCTRINE OF CONSIDERATION Cetermines what promises are enforceable

Ier$es an e$identiary, channeling, and cautionary function

Bf we e+change promises, my promise is consideration for your promise and $ice$ersa.

1. BENEFITDETRIMENT ( 3amer • >lassical contract theory


5/23

• 3enefit to promisor OR detriment to the promise

• Cetriment can be an act or legal forbearance' must be legal right (e.g., not gi$ing up illegal drugs

• =estatement 9d rejects benefit1detriment theory §? (“ If consideration is met, no additional requirement of a gain,

advantage, or benefit to the promisor or a loss, disadvantage or detriment to the promise5

2. BARGAINED FOR ECHANGE ( Baehr ore modern concept of consideration' use this test first and then digress in benefit1detriment

• D!'$"$t$&" &' C&"$)!/at$&" § ?1:

(8 Go constitute consideration, a performance or return promise must be bargained for

(9 Bt is bargained for if it%s sought by promisor in e+change for promise gi$en by promisee in e+change forthat promise

( 0erformance may consist of:a. an act other than a promise, or b. forebearance, or c. the creation, modification, or destruction of a legal relation

• C&")$t$&" t& +a/%a$" a/! "&t -&"$)!/at$&"

o Go e$aluate as): (8 Coes condition benefit the promisorF

(9 Bs “condition5 something promisor is bargaining forF

o @illiston%s “Gramp5 e+ample (p. DN

an gi$ing “tramp5 money to wal) to store buy coat ' gift not consideration

an not bargaining to see tramp wal) to the store

@al)ing is merely a condition that the tramp must do in order to get coat

o Plo"man: 6oing to office to get chec) J condition b1c company arguably not bargaining for this

o irskey: Iister mo$ing to house only a condition; land owner does not benefit by her mo$ing

• N&t!: /orbearance to sue could be consideration' must be e$idence that deference to initiate actions was related

other party%s promise and that it was bargained for by other party ($s. Baehr

. ASPECTS OF CONSIDERATION:

a. i#!s % 4ou+h!ery

• 6ift is not legally enforceable b1c no consideration• 6ifts usually b1c of emotional ties and made in heat of moment&no bargaining; can recant

• 0romise must be definite to be enforced (R!tat!#!"t §2

• Go ma)e gift enforceable:

o E!-ut!) %$'t Sgi$e cash now S once gi$en, law says can%t re$o)e; not always an option

o P/$! u")!/ !al; but seal has lost significance o$er time

o T!ta#!"ta/0 %$'t S write gift into willS then consideration is legally irrele$ant

uch effort; not payable until debts paid; new will re$o)es (codicil

o G$'t $" t/ut S set up trust fund that he can e$entually ta)e o$er; not responsible now

'. Pas! Per#ormance( Plo"man

• 0romise made in return for past performance is -OG consideration• Ielfcontradictory: something already done was not induced by the promise

c. 5de6uacy o# 2onsidera!ion ( Ba!sakis

• A)!ua-0 &' C&"$)!/at$&" §?: Bf reEuirement of consideration is met, there is no additional

reEuirement of:(a 3enefit to promisor or detriment to promisee(b #Eui$alence in the $alues e+changed; or (c “utuality of obligation5 ' actress, not agent, can ha$e escape clause

• =ecited or nominal (sometimes consideration is not sufficient; often happens in gift


6/23

• AdeEuacy of $alues e+changed is unimportant unless there is fraud, mista)e, lac) of capacity,

unconscionability, undue influence, coercion, duress, misrepresentation, or gross inadeEuacy

• Illu&/0 P/$! §??: Bf the promise ma)es the performance entirely optional it is illusory and not

consideration

3amer v. id"ay

Pla0!/ 2: Assignor of nephew*: #+ecutor

Fa-t 4ncle orally promises, in front of relati$es, nephew


7/23

II. OBLIGATION IN THE ABSENCE OF ECHANGE• Always want to try contract 8st to recei$e e+pectation damages

• 0# will reco$er reliance damages and restitution claims reco$er restitution damages

A. PROMISSORY ESTOPPEL

1. DEFINITION

• D!'$"$t$&"R!u$/!) El!#!"t §

(8 0romise §2

• May be implied by conduct (Wri+h!

(9 0romisor /!a&"a+l0 e+pects to induce action or forbearance (reliance• Does promissory benefit from reliance?

• Did she ant reliance?

• Do not confuse promisor!s motive " hat you reasonably e#pect he ould do

• $oo% at promisor not promisee

( 0romisee relies on promise

• &ho a change in position b"c of promise ' need not be detrimental ( a! )

• Must be after promise ( $s. 3ayes, Plo"man

( Bnjustice only a$oided by enforcement of the promise

2. USE OF PROMISSORY ESTOPPEL

•

0# does not create a , it merely pre$ents the promisor from challenging $alidity of the agreement• =eliance as a substitute for consideration (unbargained for

o Cetriment in is bargained for $s. in 0#

• =eliance Camages put injured party in position they would%$e been in if no promise had been made

• Iome states, e+ 6A ( 5lle+heny ha$e codified 0#

. PROMISES ITHIN THE FAMILYa. Cla$-al C&"t/a-t ( irskey

• Affection, altruism (relationship of parties is usually the source

• 4nwilling to award person relying on promise when no consideration seen as unfair

b. P/$&/0 Et&!l (reiner ; Wri+h!

• K9 and KNP(8

• -o need for consideration, reliance substitutes for it

9. CHARITABLE SUBSCRIPTIONS ( 5lle+hany 2olle+e; in+

• K9, KNP(8, KNP(9

• Bn general charities are sympathetic, especially in comparison to wealthy heirs

• >haritable Iubscription $s. >haritable pledge.

Iubscription' promise to do something in future ( 5lle+hany0ledge is a bailment' possession changes but legal title does not change ( in+

• Bf can find donati$e intent, may be more li)ely to try to find a remedy ( in+

• § 82: >haritable subscription or a marriage settlement is binding w1o proof that promise induced action or

forbearance (many courts do not accept this, see in+

=. PROMISES IN A COMMERCIAL CONTET ( a!* hoemaker

• K9 and KNP(8

• 0# originally confined to noncommercial sphere (besides employee benefit cases' now commercial promis

is its principal application.

irksey v. irksey (8R


8/23

C&u/t 31c there was no bargained for consideration and mo$ing was just a mere condition, there is no

Rul! T& +! l!%all0 !"'&/-!a+l! a" !!-ut&/0 /$! #ut +! u&/t!) +0 u''$-$!"t6 +a/%a$"!)'&/ -&"$)!/at$&".

N&t! Ghis was an old case and court may ha$e found for * b1c didn%t want women to ha$e land.

reiner v. reiner

Pla0!/ 2: other *: Ion

Fa-t om promises son land b1c she wanted him to mo$e bac), he mo$ed bac), li$es few yrs, fi+es up, she won%t gi$e him deed

C&u/t Ghere is no b1c there is no consideration, but 0# applies: (8 Cefinite promise for land (9 other could e+pect /ran) woumo$e if she offered ( /ran) mo$ed and made impro$ements ( 4p and mo$ed entire family and ga$e up homestead

Rul! P/$! /!a&"a+l0 $")u-$"% )!'$"$t! a") u+ta"t$al a-t$&" a/! +$")$"% $' $",ut$-! -a" +! a&$)!) &"l0 +0

!"'&/-!#!"t &' t(! /$!.

N&t! Cefinite and substantial no longer necessary' seen as redundant>an argue against injustice b1c he wasn%t doing anything before

Wri+h! v. -e"man

Pla0!/ *: /ather (@right2: other (-ewman

Fa-t 2 not bio father of *%s son, acted as father (ga$e surname and signed birth certificate e$en though he )new that he was not&so his actions were )nowing and $oluntary; continued support for 8P years; 2 did not good loo) for bio father; now denyingchild support

C&u/t Cuty to support enforceable b1c of 0#: (8 implied promise through $oluntary conduct (9 he saw she was not loo)ing for refather ( she did not loo) for real father for financial or emotional support ( injustice to her and sonC&"-u//!"-!: 0# reEuires reasonable reliance, not that promisee has gone through e$ery a$enue in order to a$oid detrimen(i.e., she didn%t ha$e to loo) for the father 8stD$!"t: Wuestions reliance b1c ties ha$e been se$ered and se$eral years passed by w1o any support; may be no injustice b1c

she could maybe find real dadRul! A /$!6 !$t(!/ !/! &/ $#l$!) +0 -&")u-t6 3($-( t(! /$&/ (&ul) /!a&"a+l0 !!-t t& $")u-! /!l$a"-! a")

$")u-! /!l$a"-! $ +$")$"% $' $",ut$-! -a" +! a&$)!) &"l0 +0 !"'&/-$"%.

N&t! 6A codified 0#; some policy Euestions re: decision

5lle+heny 2olle+e v. -a!ional 2hau!au6ua 2oun!y Bank

Pla0!/ 2: >ollege*: 3an)

Fa-t @oman pledged


9/23

Vs. /einberg' resigned for a lesser amount b1c of pension (relianceVs. 0lowman: after fired gi$en pension (no relianceVs. "ayes ' after announced retirement, offered pension (no reliance

hoemaker v. 2ommon"eal!h

Pla0!/ 2: ortgagor *: ortgagee

Fa-t 2 obtained a mortgage on their home from * and mortgage agreement pro$ided that they were reEuired to carry insurance othe property; when insurance e+pired, 2 alleged * sent letter stating it would purchase insurance and add to premium; basedon this letter and further phone con$ersation w1 *, 2 assumed that * had obtained insurance and did not learn otherwise tillafter their house burned down

C&u/t #$idence sufficient to create a genuine issue of material fact re: reasonableness of 2 reliance. (8 0romise in letter and on

phone, (9 reasonable e+pectation, ( did not get insurance, ( their home burned down.Rul! PE al$!


10/23

B. LIABILITIES FOR BENEFITS RECEIVED: THE PRINCIPLE OF RESTITUTION

1. DEFINTION:

a. U",ut 8AND E"/$-(#!"t:• 4njust' intended to charge and not imposed on recipient

• #nrichment' economic or intangible benefit

• =etention of benefit conferred by another, w1o offering compensation in circumstances where

compensation is reasonably e+pected (focus on recei$er• =emedy&$alue of what was gi$en to recipient (disgorge benefit

b. I#l$!)$"Fa-t C&"t/a-t:81 A%/!!#!"t a") -&"$)!/at$&" 8/!u!t +a!) &" a/t$! -&")u-t &no written1oral e+change82 #+pectation damages are imposed b1c “true 58 Argue a deal&sometimes difficult

c. I#l$!)$"La3: (Wuasi>ontract (2redi! Bureau* 2ommerce* Wa!!s81 N& a%/!!#!"t a") uuall0 "& -&"$)!/at$&" 8"& /!u!t

82 >onstruct to pre$ent unjust enrichment8 #lements:

a. A benefit conferred on * by 2 b. Appreciation or )nowledge by * of the benefit

c. Acceptance or retention of the benefit by * under circumstances ma)ing it ineEuitable for the *to retain the benefit

89 =estitution damages for unjust enrich&typically $alue of ser$ices recei$ed (not incidental injuries

d. P&"!/ I"t!//!tat$&"

• Award damages when transaction cost is X; s)eptical of awarding damages when transaction cost is Y

• 6ood analytic tool to use when faced with a restitution

• #.g., in 2redi! Bureau, cost of a $oluntary bargain was high b1c his life was at ris) and he was mental

incapable of bargaining; so, restitution appropriate

2. RESTITUTION IN THE ABSENCE OF A PROMISE: RESCUEFAMILY RELATIONS

a. Cla$-al T/!at#!"t:• 6ratuitous act done for benefit of another does not gi$e rise to duty to pay (person must ha$e reEueste

ser$ices

b. R!tat!#!"t &" R!t$tut$&":

• 0ro$ides reco$ery for person who confers benefit to sa$e another%s life, health, or property

• ore moderate b1c allows reco$ery w1o a bargain, but must satisfyH

RESTATEMENT § 11<

(*enefits to a person!s ell+being)

RESTATEMENT § 11?

(*enefits to a person!s property or credit)

A person who has ul$!) t($"% &/ !/$-! to another,although acting w1o the other%s )nowledge or consent, is entitled

to restitution if:(a he acted unofficiously and with intent to charge(b thing1ser$ice was necessary to pre$ent the other from

suffering serious bodily harm or pain(c the person supplying them had no reason to )now that the

other would not consent to recei$ing them(d it was impossible for the other to gi$e consent

A person who, although acting w1o other%s )nowledge or consent,has /!!/!) t($"% +!l&"%$"% t& a"&t(!/ '/ )a#a%! &/

)!t/u-t$&", is entitled to restitution if:(a "e was in lawful possession or custody of the thing(b =easonably necessary that ser$ices should be rendered befor

it was possible to communicate w1 owner by reasonable mea(c "e had no reason to )now that owner didn%t want him to act(d "e intended to charge for such ser$ices(e Ghe things ha$e been accepted by the owner

c. Al$!) t&@.8. RESCUE 82redi! Bureau

• 4sed b1c hard to show meeting of the minds if lac) of mental capacity

• >ourts ha$e limited to professional ser$ices&intent to charge (not w1in family

• Ghe greater the urgency, the more li)ely that an unreEuested action is justified

• "ypo: @hat if doctor is a passerbyF


11/23

9. ONERS LIABILITY (2ommerce(8 /urnisher of ser$ices e+hausted remedies $s. party w1 whom they contracted (sub $. general(9 Owner%s benefit was conferred w1o paying consideration to anyone (owner $s. e$eryone

. FAMILY RELATIONS:

• * benefited from 2%s ser$ices in a way that was unfair (Wa!!s (not all courts follow

. PROMISSORY RESTITUTIONKMORAL OBLIGATION EPRESS PROMISE AFTER BENEFIT CONFERRED

a. Cla$-al V$!3 P/$! t& Pa0 Pat D!+t: ( /ills• M&/al &+l$%at$&" u+t$tut! '&/ -&"$)!/at$&" $' t(!/! $ a /!$al &' &/$%$"al &+l$%at$&":

(8 Ghere is a bargained for pree+isting legal obligation(9 Obligation became inoperati$e by positi$e law

( A subseEuent promise to pay that ma)es the obligation legally binding again

• #+amples of $alid obligations that became inoperati$e (p. 99

o Cebts barred by a IO! (§ >2

o Cebts incurred by minors who later promise to pay (§ >=

o Cebts discharged in ban)ruptcy (§ >

•

>an%t use moral obligation as substitute for consideration always b1c it%s too subjecti$e a test:8. Bnconsistent and unpredictable holdings based on jury and judge perspecti$e of morality9. !egislature not judges should dictate what is moral

b. Mat!/$al B!"!'$t Rul!KP/$! '&/ B!"!'$t R!-!$!) (§ >redit3ureau #nterprises1M, who sued.

C&u/t 4nder impliedinlaw contract, * had to pay for ser$ices because the ser$ices were of medical benefit to him, were pro$idedin good faith, and were not gratuitous

• Acted unofficiously with intent to charge& patient came to hospital and hospital as private

• Ier$ices necessary to pre$ent from suffering serious bodily harm& magistrate found probable cause later finding not

relevant to previous services

• 0ersons ser$icing had no reason to )now * would not consent to recei$ing them, if mentally competent; and S people a

to be helped (questioned since forced to sign)• Bmpossible for the other to gi$e consent, or, if too young or mentally impaired& he as unable to consent because he a


12/23

mentally incapable.

Rul! R!u$/$"% at$!"t t& a0 '&/ #!)$-al !/$-! 3($-( t(! at$!"t /!-!$!) $" a /$at! (&$tal )&! "&t $&lat! DP &/-&"t$tut$&"al /$%(t t& 7.

2ommerce Par!nership v. E6ui!y 2on!rac!in+ 2o.

Pla0!/ *: 0roperty owner 2: Iubcontractor

Fa-t L owned a building and contracted w1 general contractor for impro$ements. M was the stucco and surfacing sub for the projeand completed its wor). 6> did not pay 2 and later filed for ban)ruptcy. Bn answer, * asserted it had paid 6> in full.

C&u/t Bn a sub%s Euasi contract against an owner, sub must ha$e e+hausted all remedies against 6> and still remain unpaid andowner must not ha$e paid consideration for wor) (thus, unjust enrichment. "ere, #Euity did not pro$e that >ommerce hadnot made payment for benefits conferred.

Rul! (!/! a" &3"!/ (a %$!" -&"$)!/at$&" '&/ t(! u+ 3&/5 +0 a0$"% &ut t(! -&"t/a-t /$-! '&/ t(! 3&/56 a" u"a$)u+ -la$# t(at t(! &3"!/ (a +!!" u",utl0 !"/$-(!) 'a$l.

N&t! 31c no prior dealing must be implied in law not implied in fact

Wa!!s v. Wa!!s

Pla0!/ 2: >ohabitant*: >ohabitant

Fa-t 4nmarried cohabitation, woman did housewor), brought property into relationship, contributed to income, they acted asmarried, helped w1 business; started own business with sisterinlaw; after ended she wants compensation for her ser$ices b1he didn%t share interests eEually. Ihe argues for implied in law or fact.

C&u/t One party (man was unjustly enriched. #$aluate unjust enrichment by using part test:8. 3enefit conferred on * by 29. nowledge of benefit by C. Acceptance by C under ineEuitable circumstances

>ourt is not swayed by argument that it was an illicit relationship, b1c both parties too) part.Rul! U"#a//$!) -&(a+$ta"t #a0 /a$! -la$# &' u",ut !"/$-(#!"t '&ll&3$"% t!/#$"at$&" &' t(!$/ /!lat$&"($ 3(!/! 1

a/t0 att!#t t& /!ta$" a" u"/!a&"a+l! a#&u"t &' t(! /&!/t0 a-u$/!) t(/&u%( t(! !''&/t &' +&t(.

/ills v. Wyman

Pla0!/ 2: >areta)er *: /ather of son

Fa-t 2 ta)es care of *%s grown son while on his death bed. After the fact, * promises in writing to reimburse 2 but he doesn%t.

C&u/t Ghere was no pree+isting obligation (son was not a minor or reEuest by father, and no consideration (he did not bargain forthe care of his son. "eld, * was morally obligated to pay, but b1c there was no consideration the promise was unenforceable"ere, no moral obligation that can substitute for consideration. Bn $ery few limited cases, a promise based on a pre$iousobligation can be binding: IO! has run, debt cancelled in ban)ruptcy, etc.

Rul! A #&/al &+l$%at$&" $ $"u''$-$!"t a -&"$)!/at$&" '&/ a /$!.

N&t! >lassical law

ay ha$e been different had son been younger; also later letter shows Cad had prescribed actions.We'' v. /co"in (8ND )

Pla0!/ 2: Bnjured rescuer *: 0edestrian

Fa-t 2 injured sa$ed life of * (decedent of c6owin from a falling bloc) at a lumber company. c6owin promised to gi$e him8< e$ery two wee)s for life. He pays until he dies and estate stopped paying.

C&u/t C%s promise is a moral obligation that can substitute for consideration, therefore it is enforceable. 2 acting in scope ofemployment, so not a gift, sa$ing life is a material benefit, so fits into =est. RD

Rul! A #&/al &+l$%at$&" $ a u''$-$!"t -&"$)!/at$&" t& u&/t a u+!u!"t /$! t& a0 3(!/! t(! /$&/ (a/!-!$!) a #at!/$al +!"!'$t.

N&t! >ompare to "arrington: Fa-t: A+e cuts off woman%s hand while she sa$es man%s life. Abused wife had him on the floor and was going to stri)e

him w1 a+e. "usband promises to pay for damages and then refuses to pay.

Rul!: "umanitarian act $oluntarily performed is not consideration to entitle her to reco$er.8. Bntent not that clear ($s. c6owin where he had already started paying

9. -o relationship between 9 parties ($s. employeeemployer in @ebb; can argue that for e$erything employee doeswhile on the job he e+pects to be paid


13/23

III. OBLIGATION IN THE ABSENCE OF COMPLETE AGREEMENT

A. LIMITING OFFERORS POER TO REVO7E: PREACCEPTANCE RELIANCE

Iituations where we%re on the way to a but don%t yet ha$e full agreement (e+: cases w1 prime subs

1. CLASSICAL THEORY 8 Baird

• §


14/23

Pla0!/ 2: 6eneral contractor *: Iub contractor

Fa-t Iub (* made a bid to be part of project to build a school under 2 (prime, prime uses sub%s bid to get job, immediately afte prime gets job, goes to sub who says bid was wrong and offers much higher bid (9+, prime has to find new sub, prime suesfor difference

C&u/t @here a sub submits a bid to prime who then relies on bid in ma)ing his own bid (and who reasonably belie$es bid is not amista)e, there is an option which is irre$ocable once prime relies (applying 0# analysis from §>?82.

Rul! 0# argument under §>?82 should be applied where there is an offer and preliminary preparations based on that offer.

N&t! Owner reEuired bid to include names and bids of all subs&strengthens 0# argument b1c shows that contractor relied onspecific estimate' sub specifically identified to owner

Berryman v. moch

Pla0!/ 2: Owner *: =eal estate agent

Fa-t * offered 2 (real estate agent option for land based on (ne$er paid consideration; * sells land to third party. 2 finds outabout re$ocation through ban); 2 tries to e+ercise option under 0# b1c reliance on offer.

C&u/t (8 @1o consideration, there is no option (9 @hen preacceptance reliance is not foreseeable, 0# may not be used for an option (* could not foresee that 2 wouldrely by getting other in$estors for land (§ >?82

Rul! A" a%/!!#!"t t(at la-5 -&"$)!/at$&" #a0 +! !"'&/-!a+l! +a!) &" PE 3(!" 81 t(! /$&/ /!a&"a+l0 !!-t!) t

/$! t& /!l0 &" t(! /$! a") 8 a 'a$lu/! t& !"'&/-! t(! /$! 3&ul) /!ult $" !/!tuat$&" &' '/au) &/ /!u$" &t(!/ $",ut$-!.

N&t! =eal estate agent who wrote up the option would )now that b1c purported consideration there was no enforceable .

Pop:s 2ones v. Resor!s In!erna!ional 3o!el, Inc.

Pla0!/ 2: /ranchisee

*: !essor Fa-t 2 (franchisee and * (franchisor negotiate to enter into a franchise. * assures 2 that they will get lease (fle+ible

interpretation of promise. * )nows 2%s lease is running out (e+pectation. 2 mo$es out of old location and closes business(reliance, and has no re$enue while waiting (injustice. Ghey are later told they are not going to get the lease.

C&u/t 0# for reliance damages.

Rul! § >?82 applies to franchises


15/23

B. IRREVOCABILITY BY STATUTE: THE FIRM OFFER

8. OTHER IRREVOCABLE OFFERS

• Offer re$ocable any time prior to acceptance §<

• Offer can be made irre$ocable by

8a >onsideration (must be specifically for option; nominal usually o) if all else loo)s fair §>?818+ 3y part performance §9=8- 4nder doctrine of 0# §>?828) B0 tatut! §22=H..

;. UCC APPROACH §22= CERTAIN TIMES HEN OFFER CAN NOT BE REVO7ED EVEN THOUGH NO CONSIDERATION

a. Pu/&!: Go gi$e effect to the deliberate intent of a merchant to ma)e a firm offer binding

+. El!#!"t

8. Offer (§29 must be by a merchant (219819. Offer must be to buy or sell goods (21=81

o -ot ser$ice contracts, real estate transactions, leases, employment contracts, marriage contrac

child support, co$enantsnottocompete, etc.o Go determine if contract in$ol$es the sales of goods % Princess )

• Cid dispute arise o$er goods or ser$icesF

• @hat is the predominant factor, thrust, or purposeF

• th >ir' (8 !anguage of , (9 nature of business of supplier, ( $alue of materials

. Offer must be in writing, 12189


16/23

C. ;UALIFIED ACCEPTANCE: THE BATTLE OF FORMS*

• U! t($ 3(!" 1 &/ #&/! '&/# u!) a") al! &' %&&)

• N!!) &''!/ a") a--!ta"-!

• Cictates how to deal with different or additional terms in written agreements or oral agreements followed by a

written manifestation of the agreement

• Itatutory and common law principles

1. CLASSICAL CL VIE ( Princessa. M$//&/ I#a%! Rul!:

• Acceptance must be precise mirror image of offer

• Bf includes different1additional terms, it is a rejection and counteroffer

• C=A@3A>: no e$en when parties want to be bound

b. Lat S(&t Rul!:

• !ast form that precedes manifestation of completion dictates terms; performance J acceptance

• C=A@3A>: often fa$ors the seller (0O and than confirming form by seller is last

• /oth $ith ' additional terms ma)es reply a >O (falls into last shot rule

2. BATTLE OF THE FORMS

a. U! &' F&/#

• 0reprinted, boilerplate forms e+changed bac) and forth (e+: 0Os, order ac)nowledgements

• ACV: >ertainty (fewer errors, con$enience and speed, sa$es money, limits authority of negotiators

• CBIACV: ay not represent the agreement, people don%t read them

+. (at $ t(! u/&! &' t(! §22?

• Co away w1 >! rules: mirror image and last shot rules

• Cetermine if and what the terms are

c. (!" (&ul) $t +! u!)F

• #+change of writings or

• Oral agreement w1 written confirmation as acceptance (not >O b1c already agreed; if ha$e not already agree

go bac)

d. A/! G&&) I"&l!) ($s. Princess !oo) at predominant purpose of &ser$ices w1 incidental goods or goods wser$ices attached to itF

• Iource of complaint

• 0redominant purpose

• th >ircuit test: !anguage of >ontract; -ature of 3usiness of Iupplier; Bntrinsic @orth of aterials

e. (at a/! t(! /&$$&"F(8 4e!erminin+ i# !here is a < 22?81

• Apply to e+change of writings O= an written confirmation of oral agreement

•Offer J loo) at =estatements b1c not defined in 4>>

• Acceptance J

a. DEFINITE (specific' includes all essential terms (price, payment terms, sm b. SEASONABLE (timelyc. NOT CONDITIONAL interpreted literally

• Bf 9 written confirmations following oral agreement both are acceptances

• #+: Order Ac)nowledgment

(9 4e!erminin+ 9erms o# ' 22?82

• 8 or no merchant J proposals

• 9 merchants (§2198 included unless any e+ception met A-C term not specifically assented to

a Offer limits acceptance to terms of offer ( Bro"n /achine b Addition materially alters the (alconer


17/23

c Ghere is a notification of objection to the terms either before or w1in reasonable time

( Look a! 2onduc! i# -o Wri!in+ !o 4e!ermine i# and 9erms' 22?8

• Only loo) at this if there is no

• >onduct by both parties which recogni7es is enough to establish e$en if writings don%t establis

• Germs of are those which writings agree (no more last shot rule, throw out differences, and use

4>> gap fillers for rest

f. (!" )&! a t!/# #at!/$all0 alt!/ t(! 7 F

• “aterial5 not welldefined

• 2ommen! =< !andard Provisions !ha! are ma!erial al!era!ions

o >lause negating a warranty where one would normally e+ist ( 4ale 3ornin+

o >lause reEuiring a le$el of guarantee not normally reEuired by the trade

o >lause gi$ing seller e+clusi$e authority to cancel should buyer not meet any in$oice

o >lause reEuiring that complaints are made in a typically short order

• 2ommen! >< !andard Provisions !ha! are -89 ma!erial al!era!ions

o >lause allowing slightly larger leeway when merchant encounters problems beyond his control

any pro$isions for that occurrenceo >lause fi+ing a reasonable time for complaints

o >lause fi+ing reasonable interest on o$erdue in$oices or fi+ing reasonable credit terms

o >lause reasonably limiting remedy per trade stds (conseEuential damages& 4ale 3ornin+

• =esults in Iurprise:

o Objecti$e )nowledge: >ustom in industry1trade usage and pre$ious dealing between parties

o Iubjecti$e )nowledge (e.g., did party read contractF

• =esults in "ardship

o ust ha$e legal right to do so before ( 4ale 3ornin+

o 4nbargained for burdens

o !imiting remedy is often seen as causing hardship

g. (at $ )&"! 3(!" t(! t!/# a/! )$''!/!"t "&t ,ut a))$t$&"alF ' -ot mentioned in 4>>, options:(8 Cifferent terms ne$er become part of agreement

• 99PQ doesn%t deal w1 different terms, so lea$e them out

• /irst shot rule&offeror%s terms will always control

(9 Great different terms as additional terms:

• Iee comment

• Cifferent terms will almost always be material and not mutually assented to

• Gherefore, they would not be included in contract

( noc) Out =ule:

• >onflicting terms cancel one another out

• 4>> pro$ides gap fillers if necessary

Princess 2ruises v. eneral Elec!ric

Pla0!/ 2: Ihip owner *: Ihip repairer

Fa-t 0rincess ga$e 6# a 0O for wor) to be done. 6# sent a Euotation w1 some different terms. 0rincess ga$e permission to proceed, did not object to confirmatory letter, and paid for ser$ices. After wor) done, 0rincess% boat was out of commissionfor a while and lost money.

C&u/t 4nder common law, an offer w1 different terms is considered a >O (mirror image rule. Germs of >O apply b1c that was thelast form (last shot rule.

Rul! (!" /!)$"a"t u/&! &' #a/$t$#! &/ la")+a!) 7 $ t(! /!")!/$"% &' !/$-! /at(!/ t(a" t(! 'u/"$($"% &'

%&&)6 t(! UCC $ $"al$-a+l! a") -&u/t #ut )/a3 &" CL )&-t/$"!.

Bro"n /achine v. 3ercules ' (written e+change of form

Pla0!/ 2: Ieller *: 3uyer

Fa-t 0 (seller sends proposal to C (buyer for sale of machine, C sends 0O (offer w1no indemnity pro$ision limits acceptance


18/23

to terms of offer, 0 sends Order Ac)nowledgment (acceptance w1indemnity clause, C buys machine, someone gets hurt, sue0, 0 demands indemnity, C says no

C&u/t Bndemnification clause not part of b1c C limited acceptance to terms in offer and indemnity would materially alter . 31cC%s assent to one unrelated term does not mean he assented to all additional terms.

Rul! R!l0 t(at )&! "&t #a5! a--!ta"-! -&")$t$&"al &" t(! &t(!/ a!"t $ a--!ta"-! /at(!/ t(a" a CO.

4ale 3ornin+ v. alconer >, C%s boilerplate terms limiting liability on conseEuential damages is not part of b1c they constitute a material

alteration that was not mutually assented to' would cause hardship.

• Iurprise&no, b1c it is customary in industry for sellers to include such limitations on conseEuential damages

• "ardship&yes, b1c would shift burden of liability to 0 and should therefore be part of negotiation

Rul! (!/! +&t( a/t$! t& a 7 a/! #!/-(a"t6 a))$t$&"al &/ )$''!/!"t t!/# a))!) +0 &"! &' t(! a/t$! +!-! a/t &' t(

7 u"l! t(!0 #at!/$all0 alt!/ 8u//$! OR (a/)($ t(! /$&/ a%/!!#!"t.


19/23

D. ELECTRONIC CONTRACTING

• Applying >! principles of formation and 4>> principles to a modern, technologically ad$anced world

• Bn these cases, customer doesn%t see terms until after paid and accepted deli$ery

• @hy not ta)e objecti$e theory (=ay $. #uriceF

o -o signing of ' #urice brothers signed and initialed papers

o Iimple and efficient law

•

Giming is important ( formation 99P< $s. alteration 99PQo Bf original terms, mere acceptance is o)

o Bf additional terms would ha$e had to e+pressly agree

Bf paying is , additional terms are effort to change , not ongoing negotiations

odifications of contract are enforceable only if -#@ consideration

• “S(/$"53/a5 ' terms of the contract or license are intended to become effecti$e as soon as the buyer uses the produ

or merely unwraps it

• “Cl$-5 T(/&u%(5 ' reEuiring a buyer to clic) through a series of terms to complete the transaction

o !oo) at format of clause

o Bf say no, then not bound to any terms e$en though they )new they were entering a ???

3ill v. a!e"ay

Pla0!/ 2: >onsumer *: >omputer $endor

Fa-t M purchased a computer from L o$er the phone. L sent computer to M, along with documents listing terms of agreement. !itchance that 2 )new of these terms b1c ne$er discussed on phone. 2 could ha$e a$oided by sending bac) computer.

C&u/t 31c K 99PQ applies only when 9 form, not applicable. Ieller made an offer by mailing the computer and consumer accepteit by )eeping the computer. formed after the customer recei$ed the goods in the mail and had a chance to inspect the itemand the terms. >onsumer could ha$e found out terms before: (8 as) $endor to send copy before deciding whether to buy, (9consult website of $endor, ( inspect documents after product deli$ery&"ills??

Rul! T!/# !"t $" a +& 3 a /&)u-t t(at tat! t(!0 %&!/" t(! al! u"l! t(! /&)u-t $ /!tu/"!) 3$" )a0 a/! +$")$

&" a +u0!/ 3(& )&! "&t /!tu/" t(! /&)u-t.

N&t! 4>> should apply b1c oral agreement and written confirmation o) (>omment 8. Bf correct, K99PQ would not apply to anyconsumer transactions' clearly not trying to remo$e consumers from statute.4phold bias of last shot rule b1c sellers ha$e forms and buyers do not ha$e form.

locek v. a!e"a y

Pla0!/ 2: >onsumer *: >omputer $endor

Fa-t 2 purchased a computer from * which included Itd. Germs and >onditions w1 computer&terms stated if )ept beyond < dayarbitration clause and other terms would ta)e effect. 2 sued *.

C&u/t "eld that K 99PQ applied and that the consumer was the offeror. 3 is usually the offeror unless price Euotation is e+tremelydetailed. was formed o$er the phone when the computer was purchased. *s reply was not e+pressly conditional so it is anacceptance. -ew terms do not apply because only 8 merchant and no e+press assent.

Rul! T!/# ($!) 3 -ut!/ )&"t +!-! a/t &' 7 3(!/! !")&/ )&! "&t !/!l0 #a5! $t a--!ta"-! -&")$t$&"a

&" t(! +u0!/ a!"t t& a))$t$&"al6 ($!)6 t!/# a") 3(!/! t(! +u0!/ )&! "&t !/!l0 a%/!! t& t(! t!/#.

N&t! ey is new judge, facts are not necessarily distinguishing


20/23

E. POSTPONED BARGAINING: THE AGREEMENT TO AGREE*

• (!" a/t$! $"t!") t& +! +&u") +ut (a!"t a%/!!) &" all t(! t!/# 0!t 8'utu/! a%/!!#!"t '&/ 1 &/ #&/! t!/# &

'&/#al a%/!!#!"t -&"t!#lat!)

• F$/t #ut l&&5 '&/ &''!/a--!ta"-!

1. CLASSICAL VIE 8Walker

• -o contract comes into e+istence until all its material terms ha$e been settled

• @illiston%s $iew: Bf parties really wanted a , they would ha$e negotiated it for themsel$es

2. MODERN VIE 8?uake

a. UCC (goods: 4phold where parties intended to be bound; once agree to agree must negotiate in good faith

F&/#at$&" $" G!"!/al §229' A6=###-G GO A6=##( #$en though 8 or more terms are left open a for sales does not fail for indefiniteness if parties

intended to ma)e a and there is a reasonably certain basis for gi$ing an appropriate remedy.

O!" P/$-! T!/# §2=

(8 Bf parties $"t!") t& +! +&u"), contract e+ists e$en w1o settled price. 0rice will be fi+ed at reasonable price at time of deli$ery if:

a.-othing is said as to price b.0rice is left to be agreed upon and parties fail to agreec.0rice is to be fi+ed by rd person or mar)et and isn%t fi+ed

(9 0rice to be set by either party indicates that he is to set it in good faith( @hen price is to be settled in a manner other than agreement of the parties and 8 party causes it not to

be set, the other party can get out of or set the price himself in good faith( Bf parties )&"t $"t!") t& +! +&u") 3& '$!) /$-!, there is no . 0arties must undo any portion

they%$e performed (i.e., they cannot come to a resolution

+. RESTATEMENTS

E$t!"-! &' 7 (!/! /$tt!" M!#&/$al C&"t!#lat!) §2? ' /O=A! >O-G#0!AGBO-Bf there are manifestations of assent sufficient to create a contract, the simple indication that the partieswere going to put things in writing won%t )eep the agreement from being binding unless circumstancesshow that the agreements were only preliminary negotiations (§2


21/23

o 0roposed appears relati$ely simple

o "as all important details

o >ontemplated “formal5 ) is a standardform document, which contains the necessary details

o 0arties ha$e proceeded to perform

• NEGOTIATE IN GOOD FAITH ' #+pressly commit to this or their actions suggest

o 0arties acted li)e the was $ery li)ely to be settled

o 0romise not to negotiate w1 other people

o 3ad faith: Celiberately use distress of other party

=aise new objections regarding settled terms =emain obstinate w1 ulterior moti$e of )illing the deal for more lucrati$e option

• OTHER

o /ormal writing needed to fully e+press co$enantsF

o @here in negotiation process agreement was abandoned

o =easons for abandonment

o #+tent of assurances gi$en by party that now disclaims contract

• PRICE: D!t!/#$"$"% -!/ta$"t0 &' '&/#ula 8Walker:

o Goo $ague (“comparati$e business conditions5 or is it sufficient so that we could come up w1 a numberF

4nclear whether comparati$e $alues were local or nationalo \ac)son $ 0epper ' certain formula

o Cid parties intend to decide or ha$e court imply amountFo Area of possible agreement (limited area for rent in Walker

Walker v. ei!h

Pla0!/ 2: !essee*: !essor

Fa-t 2 rented property for 8PP1 month for a 8Pyear term w1 an option to e+tend for an additional 8P yr term w1 same terms andconditions e+cept “rental will be fi+ed in such amount as shall actually be agreed upon by the lessor and lessee w1 the monthrental fi+ed on the comparati$e basis of rental $alues as of the date of the renewal.5 0arties couldn%t agree on rent, lower coustepped in and fi+ed rent.

C&u/t Option pro$ision too uncertain to be unenforceable&rent is most material part of a lease and no definite and objecti$estandard to compute price1rent. Also, parties did not just o$erloo), they could not agree. Agreement to agree is not necessarisufficient to ma)e .' court did not want to inter$ene

Rul! (!" a #at!/$al t!/# $ u")!-$)!) a") t(!/! $ "& -!/ta$" 3a0 t& )!-$)! $t6 t(! 7 $ u"!"'&/-!a+l!.

N&t! /ormalist $iew; others courts would resol$e this dispute and pic) a rent

?uake 2ons!ruc!ion v. 5merican 5irlines

Pla0!/ 2: >ontractor *: Owner

Fa-t Q bid on project for *; 2 was told $erbally that it won the and recei$ed a letter stating it was awarded and formal contraccoming. !etter had a start date and included cancellation pro$ision; * terminated 2; 2 said letter of intent was binding

C&u/t !etters of intent are only enforceable if parties intend them to be binding, if ambiguous the jury should decide intent as mattof law. !etter of intent might be good faith attempt to enter into negotiations; apply UCC 229 and §2?

Rul! N!!) #&/! $"'&/#at$&" &" $"t!"t t& )!-$)!.

N&t! Ichoon Iays: ust consider the breadth of a construction contract S it%s huge and no one would reasonably consider a lettercontain all applicable pro$isions.


22/23

IV. THE STATUTE OF FRAUDSA. BAC7GROUND• >ompliance with IO/ is necessary not sufficient' need offer, acceptance and consideration

o falls w1in statute is not in writing' not enforceable

o does not fall w1in statute' no reEuirement for to be in writing

• -ot one IO/; descripti$e term that co$ers any statute reEuiring writing for legal efficacy

• Bf an agreement does not meet IO/, may still use 0# or restitution

• ADV: #asier to enforce; pre$ent perjury; eliminate memory problems; minimi7e casual • DISADV: ay not enforce honest claim

B. THREE PART ANALYSIS

1. Is "i!hin or covered 'y a 8@ %Is !here a s!a!u!e !ha! re6uires !his 'ar+ain 'e reduced !o "ri!in+@)

;. I# !he is covered 'y a 8, is !here a su##icien! memorandum !o comply "A !he s!a!u!ory "ri!in+ re6uiremen!@

• Bs writing sufficient to meet the basic standard of summari7ing or reflecting the parties% bargainF

• Bmportant part: Coes the writing reflect the nonperforming party%s agreement or assentF

. I# i! is covered 'y 8 and "ri!in+ is no! su##icien!, is !here an e$cep!ion !o !he 8 %Is !here an escape ha!ch

some"here in !ha! s!a!u!e "hich permi! cour! !o avoid an inCus!ice 'ased upon !he 8@)

1. 7 COVERED BY SOF

R!tat!#!"t § 11. Cla! &' 7 C&!/!), including: ' IGAG#I 0=#VAB! OV#= G"#I#8. s that cannot be performed w1in 8 year (time between ma)ing and end of performance

• Bf any concei$able way that can be performed in 8 yr then does not ha$e to be in writing

• "ypo: #mployment for life' -o; employee can die in ] year

• "ypo: N mo. academic starting in < mos.' Tes; impossible to complete w1in 8 year from today

9. Agreement in consideration of marriage (not marriage , bounty where marriage is consideration

• #+: om pays son%s girlfriend to marry him, prenuptial agreement

. s for the sale or lease of an interest in land

•

#+: rental agreement, real property• 3ut, lease only need to be in writing if year or longer

. Agreements not to be performed during lifetime of promisor

• #+: testamentary promise, wills, etc.


23/23

• ay be signed writing not made as memo of the §1

• Iignature may be any symbol made or adopted w1 an intention to authenticate the writing §19

'. D22

• ust show a has been made 221

• Ihow Euantity of good 221

• ust be signed 221 1218

• -eed not be written 12189an be a subseEuent writing&does not need to ha$e been made at time made (oral agreement followed by

memorandum o)

• Bf writing is lost, o) if credible e$idence that establishes there was writing at the time

• S$%"atu/! '/ "&"!"'&/-$"% a/t0

. ECEPTIONS

• F&/#al R!u$/!#!"t Statut! &' F/au) UCC 221

(9 3etween merchants, writing in confirmation of is binding where recei$ing party )nows or has reason )now contents 4-!#II party objects within 8P days.

o Agency issue may arise (e.g., handing to R year old is probably not O

o A$oid problems of only being able to enforce writings against the sender

( doesn%t ha$e to meet reEuirements of (8 to be enforceable B/a. 6oods are customi7ed, not resellable, ma)er has either begun manufacture or made

commitments before notice of repudiation is recei$ed b. Bf party admits in court that the was madec. @here payment has been made and accepted O= goods ha$e been deli$ered and accepted

Bu##aloe v. 3ar!

Pla0!/ 2: 3uyer *: Ieller

Fa-t * selling mo$able barns to (o$er K99P8 b1c * hadn%t signed the chec). 3ut, 2 met 99P9((c b1c the payment had been made anaccepted. Accepting payment under this rule, receipt not deli$ery??? Ihows meeting of the minds??

Rul! A 7 $ ta5!" &ut &' t(! SOF $' t(!/! $ u''$-$!"t !$)!"-! &' a/t !/'&/#a"-!.

N&t! r. "art is liable as an agent&a spouse is an agent unless there is reason to show that they do not agree (i.e., di$orce papers"ad 2 decided he didn%t want to buy, the chec) would be sufficient as a memo up to the amount in writing b1c $s. him

Baak In!erna!ional v. /as! Indus!ries, Inc.

Pla0!/ 2: 3uyer *: Ieller

Fa-t 2 made oral agreement to buy te+tiles from *; * had 2 come to its office and send < 0O to *s other office; * confirms recein writing, didn%t object, but ne$er deli$ered te+tiles and ne$er signed fa+

C&u/t /alls under erchant #+ception: 0Os Eualify as confirmatory writing under 99P8(9, therefore * breached . @riting onlyneeds to reflect a real prior agreement that was made, does not need to e+plicitly say “confirming.5 Ga)en as a whole the 0ohere seem confirming: handwritten notes on form re: date and highly specific detail, form terms clearly not rele$ant

DISSENT: 0Os are mere offers, not e$idence of a Rul! PO $%"!) +0 t(! +u0!/6 !"t t& t(! !ll!/6 a") /!ta$"!) 3& &+,!-t$&" 'all 3$t($" t(! #!/-(a"t !-!t$&"6 at$'0$"% t(

tatut&/0 /!u$/!#!"t &' a 3/$t$"% !!" 3& !ll!/ $%"atu/!.

contracts 1 schooner_3.doc

Documents