introduction to us business law v. contracts -...
TRANSCRIPT
Introduction to US business law
V. Contracts FS 2018
Prof. Dr. Andreas Kellerhals
Overview
I. Repetition - Last week
II. What’s left from previous session III. Contracts - Basis
IV. Contract Formation V. Contract - Nature
VI. Consideration VII. Promissory Estoppel
VIII. Interpretation IX. Form
X. Carlill v. Carbolic Smoke Ball Company (1892) XI. Breach of Contract
XII. Uniform Commercial Code (UCC) XIII. Drafting US Contracts
2 March 28, 2018
I. Repetition – Last week
> Civil Procedure > Federal / State Courts
> Specialities civil procedure
> Extensive pretrial discovery > Heavy reliance on live testimony (jury)
> Aggressive pretrial motions
> Summary judgment
> Settlement
> Class actions
> Punitive damages
> Lawyers fees (no „loser pays“ rule)
3 March 28, 2018
II. What left from previous session
A. Jurisdiction (Section III of the last week presentation) B. US Civil Procedure (Section IV of the last week presentation)
C. Federal Rules of Civil Procedure (Section V of the last week presentation)
D. Stages of the Trial (Section VI of the last week presentation)
E. Litigation Process (Section VII of the last week presentation)
4 March 28, 2018
A. Jurisdiction (II)
> Personal jurisdiction > Power to bring parties before court and bind them to judgement
> In personam (state has jurisdiction over that person)
> Citizenship, tortious act
> In rem (court has power over defendant’s property)
> Quasi in rem (minimum contacts, domicil or consent)
5 March 28, 2018
A. Jurisdiction (III)
> Personal jurisdiction over international defendants > 1. territorial principle (persons or events in USA)
> Effects doctrine (if effects of of extraterritorial behavior affect commerce or harm citizens within USA)
> 2. nationality principle (citizens abroad have to follow US law - tax)
> 3. passive personality principle (US citizen victim abroad)
> 4. protective principle (national security)
> 5. universal prinicple (jus cogens - genocide)
> Forum shopping? – to try to bring case to the USA!
6 March 28, 2018
A. Jurisdiction (IV) Federal courts subject matter jurisdiction – 2 cases:
> Cases that arise under a federal law (called "federal question" cases). Federal district courts have subject matter jurisdiction if a case is based on (arises under) any federal law. Examples include:
> You sue a police officer for violating a federal civil rights statute that authorizes civil damages lawsuits by persons who are unlawfully arrested.
> A patent owner sues an individual for manufacturing an item that violates the patent (Federal law creates patent rights).
> An owner of a small business sues a large company for violating federal antitrust laws.
> Under a federal law aimed at eliminating discrimination by businesses, a civil rights organization sues a restaurant chain for maintaining a policy of discouraging patronage by members of ethnic minority groups.
7 March 28, 2018
A. Jurisdiction (V) Diversity of citizenship cases (1)
> Federal district courts also have subject matter jurisdiction if you are suing a citizen of a different state (or a foreign national), and you are asking for at least $75,000 in money damages.
> If a federal court has jurisdiction based on diversity of citizenship, the subject matter of the case doesn't matter. Examples of federal diversity jurisdiction include: > A citizen of New York injured in a traffic accident sues the New Jersey
citizen who was driving the car, and the complaint asks for damages in excess of $75,000 (The injured party could file the complaint in a federal court in either New York or New Jersey).
> A businessperson who is a citizen of Florida sues a citizen of Great Britain for breaching a contract and causing a loss of $100,000.
8 March 28, 2018
A. Jurisdiction (VI) Diversity of citizenship cases (2)
> Bluegrass Corp., a corporation whose headquarters are in Kentucky, sues a company headquartered in Washington for $300,000 for breach of contract based on the Washington company's supplying the wrong kind of grass seed (Bluegrass could file the complaint in a federal court in either Kentucky or Washington).
> A company headquartered in Tennessee sues a Texas Internet news service provider for $125,000 for publishing false information about the company's business operations (The company could file the complaint in a federal court in either Tennessee or Texas).
9 March 28, 2018
A. Jurisdiction (VII) Differences among the states (1)
> Texas and Oklahoma have separate courts of last resort for criminal cases and other cases. In all other states, there is a single court of last resort.
> In Maryland and New York, the Court of Appeals is the highest state court, and in New York the Supreme Court, Civil Court, and Criminal Court collectively are lower.
> The courts of Louisiana and the Commonwealth of Puerto Rico are organized under a civil law model with significantly different procedures from those of the courts in all other states and the District of Columbia, which are organized on an American version of the common law system established originally in England.
> The courts of one state are generally not required to follow the decisions of the courts of another state, but in the common law legal system it is customary for the courts of one state to look to decisions of other states as persuasive statements of what the law should be in the state making the decision, where express statutory provisions do not control.
10 March 28, 2018
A. Jurisdiction (VIII) Differences among the states (2)
> Many states lack an intermediate appellate court. In these cases, litigants in general jurisdiction courts have the right to appeal their cases directly to the state supreme court.
> Many states have rules that permit certain cases such a death penalty cases and election cases directly to the state supreme court, even though most civil cases must be appealed first to an intermediate appellate court.
> In Utah, civil cases are appealed directly to the state supreme court, which then has the power to refer the case instead to an intermediate appellate court, rather than being appealed first to an intermediate appellate court and then to a state supreme court.
11 March 28, 2018
A. Jurisdiction (IX) State Court Jurisdiction (1)
> State courts very often have the power to hear cases involving events that took place in the state where the court sits or if defendants reside in or are served with a summons and complaint in that state.
> If a case involves none of the types of cases over which federal courts have exclusive jurisdiction (copyright violations, patent infringement, or federal tax claims), the state court in the state in which one lives will probably have jurisdiction to hear a case, whether you're seeking an adoption, guardianship, or divorce, suing a landlord or a tenant, have a consumer complaint against a contractor or repair shop, want to go to small claims court, need to probate a will, or are involved in one of the vast variety of other kinds of legal disputes.
> Example: Dobbs, a Michigan resident, buys a used car from Rick's Used Cars, a Michigan business. A few weeks later the car breaks down, and Dobbs learns that it needs a new engine. Dobbs sues Rick's Used Cars for fraud and breach of contract in Michigan state court, which has jurisdiction because Rick's is a Michigan business man.
12 March 28, 2018
A. Jurisdiction (X) State Court Jurisdiction (2)
> Example: Allnut lives in Arizona and is involved in a traffic accident in Arizona with Marlowe, a Texas resident. Allnut could file a lawsuit in Arizona state court, which would have jurisdiction because the accident took place there. (Every state has a "motorist" law that confers jurisdiction on its state courts to hear cases involving all traffic accidents occurring in that state.)
> Allnut could also file suit in Texas, where Marlowe resides, because state courts almost always have jurisdiction to hear cases filed against defendants who live in the state.
> (However, Allnut could not file the lawsuit in California or Florida in an effort to combine a vacation with legal business. Neither state is the site where traffic accident-related events occurred or the defendant lives.)
13 March 28, 2018
A. Jurisdiction (XI) State Court Jurisdiction (3)
> Example: Elaine, a New York citizen, sues Officer Kramer (also a New York citizen) for violating her civil rights by falsely arresting her. Elaine bases the suit on a federal statute, 42 United States Code Sec. 1983, and asks for damages of $10,000. A New York federal court has the power to hear Elaine's case. Because the case is based on (arises under) a federal statute, the New York federal court has jurisdiction even though Elaine and Officer Kramer are citizens of the same state and Elaine seeks less than $75,000.
> Alternatively, Elaine could file the lawsuit in New York state court, which would have power to hear the case because the arrest occurred in New York and both Elaine and Officer Kramer live there. The state court has "concurrent jurisdiction" with the federal court and enforces the federal law as it would a state law. Elaine can go "forum shopping" between New York federal and state court.
14 March 28, 2018
A. Jurisdiction (XII) Dual Jurisdiction (1)
> When you can file in federal or state court > Many lawsuits that can be filed in federal district court can also be filed in state court.
> Federal courts have exclusive jurisdiction only in federal question cases, such as lawsuits involving copyright violations, patent infringement, or federal tax claims.
> This means that plaintiffs in all diversity jurisdiction cases and some federal question cases have a choice of suing in federal or state court. Lawyers call the process of deciding which court is best for a plaintiff's case "forum shopping."
15 March 28, 2018
A. Jurisdiction (XIII) Dual Jurisdiction (2)
> When you can file in federal or state court > For example, a plaintiff who has a choice of courts may consider factors as:
> Which courthouse is closer to the plaintiff's place of work and business? For example, a plaintiff may choose to file in a state court simply because the nearest federal court is 250 miles away.
> Which court has a longer statute of limitations? A plaintiff who has missed the filing deadline under state law would surely choose to file suit in federal district court if federal law provided a longer statute of limitations. (This is true only for federal question cases. Federal courts use a state's statute of limitations in a diversity jurisdiction case.)
> Differences in the judges. For instance, a plaintiff may think that local state court judges have a judicial philosophy that makes them more likely to sympathize with the plaintiff's claim.
> Differences in the jury panel. State and federal courts may have different boundaries for jury selection purposes, and a plaintiff may, for example, file suit in federal court because it selects jurors from a wider geographic area.
16 March 28, 2018
A. Jurisdiction (IX) Wegelin case > Facts
> In January 2013, Wegelin & Co. pleaded guilty to conspiracy in a New York court to assisting more than 100 American citizens to hide $1.2 billion from the Internal Revenue Service over a 10-year period.
> Although the bank's practice is legal under Swiss law, the bank agreed to pay $57.8 million in fines to US authorities
> Why submit to US court?
17 March 28, 2018
B. US Civil Procedure (I)
> All rules that courts follow in civil lawsuits (as opposed to criminal ones) > Plaintiff/claimant – adversary system
> Defendant
> „Sanchez v. Meier“
> Sanches plaintiff
> Remedies
> Preliminary Relief (temporary restraining orders, preliminary injunctions, and restrictions on the use of money and real property)
> Legal and Equitable Remedies (damages – money, restitution, transfer of property, injunction)
18 March 28, 2018
B. US Civil Procedure (II)
> Orginally based on common law > Rule: federal courts follow local state rules
> Due Process
> Goldberg v. Kelly > Hamdi v. Rumsfeld
> US Constitution, 5th Amendment and 14th Amendment
> But: State civil procedure law diverged
> Therefore, (1938) Federal Rules of Civil Procedure
> 35 states adopeted these rules, too
> harmonization
19 March 28, 2018
B. US Civil Procedure (III)
> Specialities > Extensive pretrial discovery
> Heavy reliance on live testimony (jury)
> Aggressive pretrial motions
> Summary judgement
> Settlement
> Class actions
> Punitive damages
> Lawyers fees (no „loser pays“ rule)
20 March 28, 2018
C. Federal Rules of Civil Procedure (I)
> FRCP are promulgated by the US Supreme Court and approved by Congress
> Purpose: > "to secure the just, speedy, and inexpensive determination of every action and
proceeding." Fed. R. Civ. P. 1.
> Different changes since 1938 > FRCP has 86 rules in 11 Titles plus Appendix of Forms (XII) and Supplemental Rules for
Admiralty of Maritime Claims and Asset Forfeiture (XIII).
21 March 28, 2018
C. Federal Rules of Civil Procedure (II)
> Title I – Scope of Rules; Form of Action
> Title II – Commencing an action; service of process, pleadings, motions, and orders > Title III – Pleadings and motions
> Title IV - Parties > Title V – Disclosures and Discovery
> Title VI – Trials > Title VII – Judgement
> Title VIII – Provisional and Final Remedies > Title IX – Special Proceedings
> Title X – District courts and Clerks: Conducting Business; Issuing Orders
22 March 28, 2018
D. Stages of the Trial (I)
1. Pleading 2. Pre-Trial
3. Trial
4. Post-Trial
23 March 28, 2018
D. Stages of the Trial (II) Pleading (I)
> Parties begin process by exchanging information > Plaintiff: filing complaint
> Not detailed
> Copy to the defendant (serve)
> Time frame to respond (~20 days)
> No answer: default judgement
24 March 28, 2018
D. Stages of the Trial (III) Pleading (II)
> Defendant > Either file answer (either admits or denies alleged complaints)
> or to move to dismiss (challenge jurisdiction)
> Motion to dismiss
> Now all objections must be presented
> Possible counterclaim
25 March 28, 2018
D. Stages of the Trial (IV) Pre-trial discovery (I)
> Peculiar American speciality > Essential for plaintiff to gain access to evidence
> 3 forms
> Interrogatories
> questions to other side under oath
> To produce documents
> Expl. Studies by tobacco companies
> Questions to third parties and depositions
> Testimonies (before court or not)
26 March 28, 2018
D. Stages of the Trial (V) Pre-trial discovery (II)
> Pre-trial conference > Discussions with parties lawyers
> First impression by judge
> Final attempt at settlement
> Default judgement (failure to plead)
27 March 28, 2018
D. Stages of the Trial (VI) Trial (I)
> Right to a trial by jury > Either party
> 7th Amendment – constitutional right
> Selection of jury members (voters)
> Jury is finder of facts - all evidence before jury – must weight credibility
> Closing argument
> Tricky: jury also determines proper amount of damages (limites by Supreme Court)
28 March 28, 2018
D. Stages of the Trial (VII) Trial (II)
> Opening arguments > Both sides present case in summary
> Plaintiff produces evidence
> Witness get cross-examined
> Defences produces evidence
> Judge instructs the jury on the applicable law
> Jury withdrews, deliberate in private, verdict in court must be unanimous
29 March 28, 2018
D. Stages of the Trial (VIII) Trial (III)
> Mock Jury-Trial > Judge has ultimate decision on admission of evidence
> What is the judge doing at all?
30 March 28, 2018
D. Stages of the Trial (IX) Post-Trial
> Right to appeal to the Court of Appeal > Generally only issues of law
> Written submissions and oral argument before three-judge panel
> US Supreme Court
> Only right to writ of certiorari
31 March 28, 2018
E. Litigation process (I)
> Civil action > File the complaint with initial allegations > Where to file it? > Preliminary injunctions?
> Defendant‘s response > Motions > Pretrial conference
> Court decides on „standing“ > Plaintiff has some legally protected, tangible interest in the outcome of
litigation
32 March 28, 2018
E. Litigation process (II)
> Pretrial discovery > Depositions, interrogatories, requests to produce documents or things for
any item within a party‘s control
> If no settlement – trial
> Does plaintiff want a jury? ( if without - «bench» trial)
> Selection of the jury
> 9 - 12
33 March 28, 2018
E. Litigation process (III)
> Trial > Opening statements
> Plaintiff presents evidence
> Testimony, witnesses, experts, etc.
> Defendant presents evidence
> Instructions to the jury
> Judgment
> Appeal
34 March 28, 2018
The way up to the US Supreme Court!
http://www.youtube.com/watch?v=ZS2Up5TeirM
III. Contracts - Basis (I)
> Common law (England) > Basically till today
> Individual states have own contract law
> Statutes > Too many different regulations by the end of 19th century
> Harmonization movement
> National Conference of Commissioners on Uniform State Laws (NCCUSL)
> 1942 Uniform Commercial Code – model law (UCC)
> Esp. Sales contract (UCC Art. 2)
> 1988 – CISG – UN convention on sales of goods applicable among states
> Freedom of contract
37 March 28, 2018
III. Contracts - Basis (II)
> New York Contract Law UCC
38 March 28, 2018
IV. Contract Formation (I)
> Issue: how does an agreement become an enforceable obligation in contract law?
> UCC distincts between
> Agreement (parties bargain in fact)
> Not enforceable
> Contract (resulting legal obligation)
39 March 28, 2018
IV. Contract Formation (II)
> Through offer and acceptance! > Offeror/offeree
> No fixed form required (writting, informal, conditional)
> Excp: „firm offer“ = binding > Just „meeting of the minds“
> Expressis acceptance
> Specht v. Netscape, 306 F.3d 17 (2d Cir.2002) simply clicking download button does not indicate agreement to the terms of a contract if those terms were not consipicuous
> Or by any reasonable means
> Expl. Acting accordingly > Informal approach except formality is required by law!
40 March 28, 2018
V. Contract - Nature (I)
> Agreement of two parties > to create obligation to do or refrain from doing something
> Initiated by the offer (offeror)
> Acceptance by the offeree > Legally binding only if either
> Contract is formalized (speciality contracts) or
> Supported by consideration (simple or informal contracts)
41 March 28, 2018
V. Contract - Nature (II)
> Simple contracts are either > Unilateral or
> Posting a reward (bring back dog)
> Dog against money > Bilateral
> Selling goods
42 March 28, 2018
V. Contract - Nature (III)
> Sealed contract > Formalization consists of > Contract signed > Sealed (wax, sign) > And delivered > (wittnessed)
> States know certain types of contracts that must be in writting > Promise to pay debt for somebody else > Promise to marry > Agreements involving real estate > Insurance contracts > Sale of goods over US$ 500
43 March 28, 2018
V. Contract - Nature (IV)
> For an agreement to become a legally binding contract is needed: > Offer
> Acceptance
> Consideration Contract Components > Performance
> By a reasonable person
> Sufficient clear
> Essential points
> Able person (> 21, mostly 18) – otherwise impeachable, not void
44 March 28, 2018
VI. Consideration (I)
> Complex concept > Major difference common law/civil law
> ~ mutually bargained-for exchange between the parties
> Idea of «do ut des»
> Each side has to receive something in exchange for what they give
> Agreement without consideration = illusory, not binding
> Some states today accept written contracts as consideration
45 March 28, 2018
VI. Consideration (II)
> A binding agreement generally requires „consideration“ > An exchange/or promise to exchange of something of value
> Consideration separates purely gratuitous promises
> Consideration = bargain for and given in exchange for performance or performance or a promise of performance by the offeree.
> Usually price for goods
46 March 28, 2018
VI. Consideration (III)
> Each party of a contract must provide something of value that induces the other to enter the agreement
> Value exchanged not equivalent > Expl. Car for not smoking for 5 years > Sufficient consideration? > Courts typically focuses more on offeree > Offeree has to suffer a „legal detriment“ = gives a legal right > f.e. not promise to give love > Case Kirksey v. Kirksey, Ala. Sup 131 (1845) an old case holding that it was not
sufficient consideration to promise to visit a person, in return for getting house
47 March 28, 2018
VI. Consideration (IV)
Expl. (Bonfield) > Prof. Banks promises to give you an A on your exam > Prof. Banks promises to you an A if you always attend the class > If you get a D although attending the class can you sue Prof. Banks? > Only in second expl. is consideration > More serious commitment > Each side has undertaken to act in exchange
48 March 28, 2018
VI. Consideration (V)
> Consideration can be anything of value > Each party has to agree to exchange if contract is to be valid > If only one party offers consideration, agreement is not a legally binding
contract > „something must be given or promised in exchange or return for the promise“ > Also mutual promises
> Without consideration, a agreement is not a legally enforceable contract
49 March 28, 2018
VI. Consideration (VI)
> Consideration can be executory or > Promise to do in future
> Executed
> Exchange not
> Consideration can not be „past“
> Anything of value (item, service)
> „Quid pro quo“
50 March 28, 2018
VI. Consideration (VII)
> Consideration does not need to be adequate > To be „good“, consideration must be of some value, even minimal value
> Courts will not measure, that is up to the parties
> Consideration can be in any form
> Even a peppercorn would be sufficient
51 March 28, 2018
VI. Consideration (VIII) Chappell & Co v. Nestle (1)
> House of Lords (1960) > Copyright case > Nestle advertised: for some money and 3 chocolate wrappers they would send
a copy of a record „Rockin Shoes“ > Owner of copyright entitled to 6.25% of selling price > He argued value has to be calculated on money plus value of wrappers > Nestle said: wrappers have no value
52 March 28, 2018
VI. Consideration (IX) Chappell & Co v. Nestle (2)
> House of Lords held that wrappers were part of consideration > Consideration has two parts:
> Buying chocolate bars
> Paying money
> Both are of value to Nestle
> Some dissenters
> (AC 87 House of Lords - 1960)
53 March 28, 2018
VI. Consideration (X)
> But: Consideration must be sufficient > Not for a past event
> F.e. not for a meal already eaten
> Case: Eastwood v. Kenyon
> Guardian raised loan to educate young girl to improve her marriage prospects
> After marriage, husband promised to pay off loan
> Guardian could not enforce because past.
54 March 28, 2018
VI. Consideration (XI)
> Illusory consideration > Must be some kind of connection between a promise and consideration
> No consideration is to „refrain from a conduct wich was never intended to persue“
55 March 28, 2018
VI. Consideration (XII)
> Certainty > Consideration is good where it can be expressed in economic terms
> Court held: promise to stop complaining about something has no economic value
> Promise to perform an existing duty to the other party is not good
> But ok to third party
56 March 28, 2018
VI. Consideration (XIII) Lack of consideration
> http://study.com/academy/lesson/lack-of-consideration-in-contract-law.html
57 March 28, 2018
VII. Promissory Estoppel
> Reasonable reliance on otherwise (non enforceable) promise > A promise on which someone reasonably can rely
> To avoid „unjust enrichment“
> Fairness
> Paying for goods that someone did not order but is using
> Needs interpretation of contract
58 March 28, 2018
VIII. Interpretation
> When interpreting a contract, assess what the parties intended > Factors:
> Terms of contract
> Course of performance
> Course of dealing
> Trade usage
> Ambiguity: such terms will be interpreted in favor of the party who had less reason to know of the ambiguity
> All contracts are assumed to include a term requiring performance in good faith
59 March 28, 2018
IX. Form
> Generally no specific form needed > Some contracts need written form
> Promise to marry
> Bailment (Bürgschaft)
> Real estate (rights for longer than a year)
> Case Buffaloe v. Hart, 114 N.C. App. 52 (1994) regarding formality and part performance
60 March 28, 2018
X. Carlill v. Carbolic Smoke Ball Company (1892) (1) > http://www.youtube.com/watch?v=vYRcKQGadRo
61 March 28, 2018
X. Carlill v. Carbolic Smoke Ball Company (1892) (2) > English decision > Carbolic smoke ball
> In advertisment buyer would guaranteed that it works against influenza, if not reward £ 100
> Is this a contract?
> Court said (in inventive ways) YES, all essential elements are there, including offer, acceptance, consideration and intention to create legal relations
62 March 28, 2018
X. Carlill v. Carbolic Smoke Ball Company (1892) (3) Court of Appeal > Fully binding contract – all elements
> Advert unilateral offer to all
> Satisfying conditions for using ball = acceptance
> Purchasing and using ball = good consideration, benefit to Carbolic
> Claim of £1000 deposit showed serious intention to be legally bound
63 March 28, 2018
XI. Breach of Contract (1)
> Unjustifiable faulure to perform a contractual duty > Also only partially
> Defenses
> No valid contract
> Lack of capacity (drunk)
> Mistake (mutual/unilateral)
> Changed circumstances
> Fraud
> Duress/intoxication
> Public policy
64 March 28, 2018
XI. Breach of Contract (2)
> Remedies > General damages = Money damages
> Including consequential damages
> Sometimes punitive damages > Restitution (f.e. overship of house)
> Specific performance (duty to perform)
> Only when monetary damages do not adequately redress the injury
> Exception, specially for unique goods – f.e. selling antiques, realestate)
> Liquidated damages
> Damages specified in the contract by agreement
65 March 28, 2018
XII. Uniform Commercial Code (UCC) (1)
> First published in 1952 > Idea: to harmonize the law of the sale and other commercial transactions
> Secure interstate trade
> Created by American Law Institute (private organization) > Not binding, only recommendation
> Permanent editorial board
66 March 28, 2018
XII. Uniform Commercial Code (UCC) (2)
> In one or another form enacted in all 50 states > Even Louisiana mostly
> But some differences remain
67 March 28, 2018
XII. Uniform Commercial Code (UCC) (3) Art. 2 (1)
> Contract formation > Firm offers (offers that can not be revoked for a set time) are valid without
consideration and irrevocable for time stated (or up to 3 months)
> Failure to set price will not prevent formation of contract if parties original intent was to form a contract. A reasonable price will be set by the court
68 March 28, 2018
XII. Uniform Commercial Code (UCC) (4) Art. 2 (2)
> Sending non-conforming goods = counteroffer > Good faith requirement
> FOB – place of business
> Reclamations within 20 days
> Insolvency
> Battle of forms - when multiple forms with varying terms are exchanged
> Etc.
69 March 28, 2018
XII. Uniform Commercial Code (UCC) (5) Art. 2 (3) - § 2-204. Formation in General > (1) A contract for sale of goods may be made in any manner sufficient to show agreement, including
offer and acceptance, conduct by both parties which recognizes the existence of a contract, the interaction of electronic agents, and the interaction of an electronic agent and an individual.
> (2) An agreement sufficient to constitute a contract for sale may be found even if the moment of its making is undetermined.
> (3) Even if one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
> (4) Except as otherwise provided in Sections 2-211 through 2-213, the following rules apply: > (a) A contract may be formed by the interaction of electronic agents of the parties, even if no
individual was aware of or reviewed the electronic agents' actions or the resulting terms and agreements.
> (b) A contract may be formed by the interaction of an electronic agent and an individual acting on the individual's own behalf or for another person. A contract is formed if the individual takes actions that the individual is free to refuse to take or makes a statement, and the individual has reason to know that the actions or statement will:
> (i) cause the electronic agent to complete the transaction or performance; or > (ii) indicate acceptance of an offer, regardless of other expressions or actions by the individual to
which the electronic agent cannot react. 70 March 28, 2018
XII. Uniform Commercial Code (UCC) (6) Art. 2 (4) - § 2-205. Firm offers
> An offer by a merchant to buy or sell goods in a signed record that by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but in no event may the period of irrevocability exceed three months. Any such term of assurance in a form supplied by the offeree must be separately signed by the offeror.
71 March 28, 2018
XII. Uniform Commercial Code (UCC) (7) Art. 2 (5) - § 2-301. General Obligations of Parties
> The obligation of the seller is to transfer and deliver and that of the buyer is to accept and pay in accordance with the contract.
72 March 28, 2018
XII. Uniform Commercial Code (UCC) (8) Case: Payne v. Stalley (1995)
> Lawyer relied on official text of UCC and failed to check the Florida statute
> As result, he missed a filing deadline in an important case
> Court hold „we cannot rewrite Florida law to accomodate a Michigan attorney more familiar with UCC“
73 March 28, 2018
XII. Uniform Commercial Code (UCC) (9)
> Adopted in all 50 states
> in whole or in part
> Dealing with sale of goods (contract law) > Other sources
> Consumer protection law
> Judge-made law
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XIII. Drafting US Contracts (1)
> Fact: longer than continental European ones
> Why?
75 March 28, 2018
Please come!
> Wednesday, 16 May 2018 > 6 pm, 101
> Chief Judge Wood > 7th Circuit, Chicago
> „national judges, borderless problems“
76 March 28, 2018
Next time
> 4. April – no lecture! > 11. April – no lecture!
> 18. April
– Torts
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