CONTRACTS OUTLINE

Types of Contracts

1. Unilateral

-promise given in exchange for performance -offeree could walk away from the promise

2. Bilateral (mutuality of obligation)

-promise given for a promise (exchange of promises)

-a reciprocal relationship develops

-consideration needed on both sides

-K enforceable at the point where they exchange promises

White v. Benkowski (consideration case)

F-W's speak to B's about supplying water

-W's argue that they bought house in consideration for B's promise to supply water.

I- Whether an enforceable agreement w/consideration exists

H-P able to receive nominal damages, not compensatory damages

Punitive damages are generally NOT allowed for breach of K actions

Sullivan v. O'Connor (use of compensatory "expectancy" damages)

F-Surgeon performs plastic surgery and creates a worse nose for P.

I-What is the measure of damages to be applied where liability is found?

H- P allowed to recover out-of-pocket expenses; pain and suffering as applicable

-expectancy damages gave her $ for difference b/t beautiful nose and worsened nose.

-reliance damages would have given her $ for difference b/t original nose and worsened nose

-Liability in contractTheories of Obligation:

1. Consideration (Bargained for exchange)

-Predominant theory

Bargained for exchange (B/E) theory

-promisee's detriment suffered in exchange for promisor's benefit

-need to show that there was a legal detriment to the promisee and benefit to the promisor and each party induced the other

*Offer and acceptance reflects B/E

Bargain-agreement, manifestation of mutual assent

Legal Detriment

-a forbearance, which does not have to be greater than the benefit

-any relinquishment, yielding of a legal right

-an immediate act, future act, complete or partial abandonment, etc.

Use of an objective vs. subjective std.

Not likely to work when there is:

1. Gift Promises (gratuitous promise)

2. Promise not seeking an exchange (Wheeler v. White-PE)

3. Defective bargained-for-exchange (B/E) (Hoffman v. Red Owl Stores-PE)i.e. promise doesn't specifically state a duration of time

4. Incomplete B/E

i.e. there wasn't full performance by one party

*promise coming before the performance

5. Past Consideration

6. Pre-existing duty

Hamer v. Sidway

F-Uncle promises to pay nephew $5000 if he abstained from drinking, smoking, swearing and gambling until the age of 21. The executor refused to honor the promise, claiming that no consideration was given to the uncle in exchange for the promise

R-Forbearance of a right is sufficient legal detriment to satisfy the requirement of consideration.Dougherty v. Salt

F-P received a promissory note from his aunt for $3000. The note was on a printed form that contained the words "for the value received." No consideration was in fact given.

R-An inference of consideration that is drawn from the form of a note can be overcome by other evidence suggesting that no consideration was in fact given.

Hardesty v. Smith

F-D sells rights to an invention to P. After purchasing the rights, P believes the improvement was worthless and sues D.

R-"Loss, trouble or inconvenience on the part of seller without benefit to buyer is good consideration."

Maughs v. Porter (gift promise)

F-D held an auction and P gave $5 to participate. Her name was chosen but D refused to pay for its delivery.

R-Where a promisor derives a benefit from a promise to give a gift, and the promisee incurs a corresponding detriment, the promise is supported by consideration and enforceable.

Mattei v. Hopper

F-D was obligated to sell, but P was only had to buy if he was satisfied with the leases.

R-An agreement that contains a satisfaction clause is not ilusory (lacking consideration or mutuality of obligation) if performance of the condition can be judged by a reasonable person standard or if the party subject to the satisfaction clause acts in good faith.

De Los Santos v. Great Western Sugar Co. (mutuality of obligation)

R-Where a promisor agrees to purchase services from a promisee on a pre unit basis, but th agreement does not specify a quantity or an intent to have the promisee perform all of the promisor's needs, the promisor may terminate the agreement at anytime.

Construction Contracts:

Groves v. Wunder ----"Cost of performance rule" (owner's right for compensation)

F-P's contract to lease Groves' land permitted the removal of sand and gravel and required that the property be restored to a level grade. D deliberately did not restore the land's grade.

R-One who wrongfully and wilfully breaches a construction K is liable for the reasonable cost of completing the required work, rather than the value that completion would add to the land (as held in the lower court).

Peevyhouse v. Garland Coal & Mining Co.----"Clearly disproportionate" standard

R-The measure of damages for breach of a construction obligation is ordinarily the reasonable cost of completing the work properly, unless the obligation is only incidental to the main purpose of the K, and the cost of performing is grossly disproportionate to any economic benefit it will yield. In the latter case, damages are limited to the diminution in value of the property as a result of the breach in order to avoid "unreasonable economic waste." (Possible measure of damages--1) based on market value or 2) cost of completion))

2. Promissory Estoppel (Justified Reliance)

-trying to enforce an agreement that wasn't fully a binding contract.

-promisee has to have reliance

-reliance must be justified

*May also be used to enforce a commitment to a preliminary agreement by showing a clear and unambiguous promise, a reasonable and forseeable reliance by the promisee, and an injury sustained by the promisee.

Requirements:

1. Need to show that there was a promise

2. A promise was relied on by another party

3. Must have been reasonably forseeable by D (P's burden of proof)

4. Must have substantial (vs. trivial) reliance

5.Have to show quantifiable injury

*behavior follows the promise

-may be gratuitous and creates reliance

Kirksey v. Kirksey

F-BIL promises SIL (P) a place to live if P abandons her land and tends to his land.

R-Acts that are required before the fulfillment of a promise are preconditions to accepting the promise, not valid consideration.

Seavey v. Drake (oral promise)

F-S, wishing to help his son (D) orally agreed to give him a strip of land, which executors refused to do by arguing that there was no consideration.

R-A parol K to convey land will be enforced in favor of the promisee if the failure or refusal to convey land would operate as a fraud upon him. The bar of the statute of frauds is removed upon the grounds that it is a fraud for the promisor to insist upon the lack of a written document after he has allowed partial performance of the K.

Wheeler v. White

R-Where a promisee acts to his detriment in reasonable reliance upon an otherwise unenforceable promise, he may be entitled to recover damages incurred by the reliance if necessary to avoid injustice.

Hoffman v. Red Owl Stores

R-A party will be liable for a promise made during preliminary negotiations if the promisor should reasonably expect to induce an action or a forbearance of a definite and sustantial nature by the promisee, the promise does induce such action or forbearance, and injustice would result if relief were not granted.

3. Unjust Enrichment (no promise)-trying to enforce a claim of D against P in which there was a bestowal of benefit to P

-K implied by law, type of quasi-contract,

-requires restitution

Elements:

1. See whether there has been an enrichment of D/impoverishment of P.

2. Ask whether enriched party has to return the benefit (through restitution) or keep it.

Rule: One can not gain more under unjust enrichment than normally would gain under K.

*there is no promise, but requires an act from A that enriches B

Blumgarden v. Coyer

F-P tries to recover $1 million for finder's fee b/c thought it would be an ultimate benefit to the company.

R-unjust enrichment for D to keep the benefits that P bestowed.

*Gifts-if delivered, promise is complete & compensation can NOT be given to the gift-maker

Sparks v. Gustafon

F-As a friend, P thought he would ultimately gain a benefit from working in D's building for

free.

R-One can NOT gain more under unjust enrichment than normally would gain under the K.

4. Moral Obligation

-could involve a gratuitous promise

*promise follows the performance not before

Need to ask:

1. Nature of the Benefit

2. Nature of the DetrimentHow substantial was the benefit? (not solely monetary) -Dimension

-Direction of the benefit

-Dimension

3. Promises-Gratuitous

a. Specificity

-Relationship

b. Performance-clearly

shows obligation

Other ways to compensate a victim

-create a trust

-write the person in a will

Mills v. Wyman

F-P provided board, nursing, and care to D's 25-yr-old-son who became ill while traveling. After the services had been rendered, D wrote to Mills, promising to pay for the and later refused to pay.

R-Moral obligation is NOT sufficient consideration to enforce a promise to pay for services already rendered. Past consideration is no consideration.

Webb v. McGowin

F-P was crippled during an heroic act to prevent harm to D. Consequently, D promised to pay P $15 every two weeks for the rest of his life, which he paid until his death. His estate refused to honor the promise.

R-Minority view-moral obligation is sufficient consideration to support a subsequent

promise when the promisor received a material benefit.

Majority view-moral obligation is no consideration (Mills)

Harrington v. Taylor

F-P is injured with a mutilated hand, when trying to stop D from hitting husband with an axe.

R-A voluntary humanitarian act is NOT consideration for a promise made at a later date. Past consideration is no consideration.5. Obligation arising from tort

-tort arises from a contractual agreement

-contract forms the basis of the duty owed to D

-occurs when there is a malicious breach

-must violate some norm of behavior

-not necessarily done intentionally or deliberately

Maudlin v. Sheffer (service K)F-P (architect) pays D (engineer) to make plans that are made incorrectly. Breach occurs in the form of misfeasance vs. nonfeasance.

R-D breached his duty as an engineer.

Hargrave v. Oki Nursery, Inc. (K for goods)

F-Owner of vineyard purchases vines that were diseased.

R-Where a legal duty exists independent of contractual obligation, P may recover in tort.

Court ruled that P could maintain a tort fraud action.

Foley v. Interactive Data Corp. (at will employment)

F-P was fired from D and argued that based on the guidelines he should have only been discharged for good cause.

R1-The presumption of at will employment may be modified by express or implied terms in an employment agreement.

R2-Since the nature of an employment K is fundamentally contractual, relief for the breach of an implied covenant of good faith and fair dealing should be limited to K remedies.

6. Obligation arising solely from form

-promise that is enforceable under the seal or in writing w/out the need to show consideration.

7. Obligation arising from a Statutory Warranty

Three Types:

1. Express

-based on representations (sample or model or product, description of goods, or affirmation of fact or promise)

and

-whether warranty is part of "basis of the bargain."

-whether express warranty was breached.

Burden of seller to prove that statement was an opinion

Burden of buyer to re-but argument

Keith v. Buchanan

F-P purchases a vessel that he finds out is not "seaworthy"

R-court holds no fitness for a particular purpose

2. Implied warranty of merchantability

-arises if merchant is in the general business of selling such products

Webster v. Blue Ship Tea Room, Inc.

F-P was injured while eating fish chowder served at D's restaurant. A fish bone got caught in her throat, resulting in two surgeries.

R-Foreign substances which make the food unwholesome are likely to constitute a breach. However, foreign substances which are occasionally found within a particular cuisine do NOT constitute a breach, as the consumer should anticipate the potential presence of such substances.

3. Implied warranty of fitness for a particular purpose

-buyer must have particular purpose for wanting goods and

-seller must have known about specific purpose.

-buyer relied on seller's statements and

-seller has to be aware that buyer was buying in reliance.

Remedies at Law

-standard relief for breach of contract is monetary damages

Contract Formula: D = MVP - KP + ID + CD

(Cover Price)

1. Expectancy (Predominant remedial theory)---(Forward-looking) -putting P in the (expected) position he would have been in had the contract been performed

-should not exceed what was expected, which would be punitive damages.

{Formula = K price- cost of completion}

-permits non-breaching party to profit

-allows for the greatest recovery

-not useful in a losing contract

-generally includes loss profits and loss wages

Limits

a. forseeability

b. avoidability

c. mitigation

2. Reliance (backward-looking)

-a component of expectancy damages ("cost of work already performed")

-compensating injured P back to the original position.

-usually used when expectancy damages won't adequately compensate P.

Generally more preferable than restitution b/c:

1. raises the question of measuring benefit

2. reaches more broadly

3. in losing K, breaching party can recover the losses

*if there is a losing K, must argue any enrichment.

Two types:

a. Essential (P likely to be capped by K)

-refers to performance obligation

-involves preparation expenses for performance

-could include forgone opportunities

b. Incidental

-costs that arise as a result of the breach

-relates to efforts to mitigate damages

-D has burden to prove the loss

Nurse v. Barnes

F: D promised P use of the mill for six months and breaches the agreement by making the

mill unavailable.3. Restitution

-value rendered to D from P's performance

-it is not limited by K's price

-if performance has no value, there can be no restitution damages

-if P has fully performed, then courts generally do not allow recovery under restitution

Two main variables:

1. Was there an enforceable agreement w/ consideration?

-If so, was there a losing contract?

2. Whether P was the non-breaching party in the agreement

U.S. for Susi Contracting v. Zara Contracting (restitutionary measure)

F-subcontractor not allowed to finish job b/c unexpected problems due to soil

R-D received benefit from P's performance; recovery for expenditures made in performance

-Non-breaching party (P) conferred a benefit but LOSING K.

Hadley v. Baxendale

F-A mill operator, forced to shut down after a shaft broke, hired a common-carrier to deliver the broken shaft to an engineer for repairs. The carrier negligently delayed delivery, forcing the mill to shut down longer than expected.

R-The amount of damages that is awarded for a breach is limited to those which were fairly and reasonably contemplated by the parties at the time of contracting. Special circumstances MUST be communicated by P to D beforehand.Avoidability

1. Failure to stop acting

-non-breaching party and effecting failure to mitigate damages

2. Failure to act in mitigation

-non-breaching party should be treated as if he has acted

Parker v. 20th Century Fox Film Corp. (personal services K)

F-P (Shirley MacClaine) refuses proposal of 2nd film she claims to be inferior.

R-A wrongfully discharged employee is entitled to recover the agreed upon compensation less than any amount the employer proves the employee has earned or with reasonable effort might have earned from other employment. The employer MUST show that the other employment was comparable, or substantially similar, to that of which the employee has been deprived.Other theories for recovery:

1. Reliance-should could have accepted other "opportunities forgone."

2. Expectancy-need to consider whether the 2nd film was actually inferior.

Chicago Coliseum Club v. Dempsey (performance K)

F-D (a world-class boxer) contracted to fight and P's were obligated to spend a lot of money to promote the fight. D repudiates the K a month before the fight.

R-When such a K is breached, lost anticipated profits are only recoverable if they can be proved with certainty, which is NOT the case where profits would be affectuated by multiple factors. Attorney's fees and other costs incurred in negotiating and preparing the K are NOT recoverable, although expenses made in preparation for performance are.

-use of reliance measure.

Equitable Remedies

-Two main forms of equitable relief are injunctions and specific performance

Specific Performance -is usually granted where a contract involves a unique good, such as land.

-courts generally do NOT want this in personal service K's (i.e. building K's) b/c do not want

to deal with any extensive supervisory role.

-i.e. where a promisor has promised to convey a piece of land and w/out justification refuses

to make the conveyence and court will order the conveyence.

Need to consider:

a) the difficulty of proving monetary damages,

b) the availability of satisfactory substitute goods, andc) the likelihood P will be able to collect a monetary judgment from D.

Injunctions

A court may prohibit the breaching party from rendering the contracted-for performance to anyone but the nonbreaching part.

Need to consider:

a) a noncompetition clause is in the contract

b) the contract if for unique services

c) the employee's livelihood is not threatenedSpecial damages

Special (or Consequential) Damages:

-don't normally flow from a breach

-D must show forseeability

-D must be put on notice

-P has burden of proof (P must show that D should have known)

*buyer (gets goods) has consequential damages, but seller (gets money) does NOT

Liquidating Damage Clause (for public policy reasons)

Elements:

1. Need a reasonable effort made by the parties to estimate damages at the time of contract NOT at time of breach.

2. Damages had to be difficult if not impossible to predictWhen made by one party:

-really intended as a penalty

-effort to limit liability and deter breachGrouse v. Group Health Plan (at will employment)

F-P resigned from his job b/c he received an employment offer from D's. The offer was later revoked.

R-Under the doctrine of PE, a promise that the promisor should reasonably expect to induce action or forbearance on the part of the promisee, and which does induce such action, is binding if non-enforcement would result in injustice.

ALTERNATE DISPUTE RESOLUTION

-started out as a set of binding processes

Negotiation

-binding arbitration (by judges)

-not an example of ADR

Styles of negotiation

1. Aggressive

-seeks interests primarily for one's client

2. Cooperative/conciliatory

-seeks best interests for both parties

Three top skills for lawyers:

-fact finding

-ability to find relevant issues and apply

-communicating (oral and written)

Requirements contract

-buyer agrees with seller that buyer will buy all of his requirements for his goods from the seller at an agreed upon price.

Output contract

-seller agrees to sell all of his output of a particular product to buyer.

-imposes exclusivity on the seller

*Output and requirement contracts are VALID despite an absence of definite terms, so long as both parties act in good faith.

"MEETING OF THE MINDS"

-when both parties intend to contract and their actions reflect this intention

-both parties have subjective intent and objective behavior

----Mutual Assent is needed to enforce a contractEmbry v. Hargardine McKittrick Dry Goods Co.

F-P (a fired employee) claimed that D had promised to renew his K and D denied ever having made such a promise.

R-One's state of mind is immaterial if that party outwardly manifests assent to the K.

-there was no meeting of the minds (and no mutual assent) since they had different versions of

the same story.

Lucy v. Zehmer

F-D signed an memo agreeing to sell his family farm to P and D claimed that it was a joke (and used incapacity defense from being drunk at the time).

R-The intention of a party to a K is judged by his words and acts (objective std), but by his unexpressed state of mind (subjective std).

Raffles v. Wichelhaus

F-D contracted to buy cotton that was on a ship named "Peerless." Unknown to both parties there were two ships named "Peerless."

R-When parties to a contract are unaware that they have different understandings of a material ambiguity, the agreement is unenforceable b/c there was no "meeting of the minds" or mutual mistake.

-Ambiguity would not have mattered if parties had the same subjective intent (based on their

actions).

-If one party knows that the ambiguity exists, then the K will be formed based on the

knowledge of "unknowing" party.

OFFER

Def-a manifestation of willingness to enter into a bargain which invites another person's assent to the bargain. Generally revocable before its accepted

Offeror-person who makes the promise ("master of the offer")

Offeree-person to whom the promise is made

Seller-invites offers

Buyer-makes offers

(Courteen Seed-Held not an offer but an invitation b/c was asking for a price)

Three main traits:

1. Commitment or promise by the offeror to enter into a contract

2. Certain and specific terms

3. Communication to the Offeree, who needs to be specific (when there are multiple offerees, they must be put on notice)

Need to ask:

1. Is there an offer?

2. Who is the offer to?

3. If it's an offer, is it irrevocable?

4. " ", what was it bargaining for?

5. " ", was it revoked before the acceptance?

6. Was it reasonable for the dealer/rep. to believe that he was a member of the offeree class? (Duty to mitigate on rep.)

Decision to wait = rejection

*if an offer is not found, consider if a promise can be determined based on whether P was within the class of offerees.

"For immediate acceptance"

-not an offer but an invitation to make offers

Price Quotations:

A price quotation is NOT an offer to sell unless:

a) The quoter specifies the quantity he is willing to sell, not merely the per-unit cost, and

b) The quote is made to a specific person, not the general public

Auctions:

An auctioneer solicits bids; he does not make offers

*Advertisements are not offers, and would NOT be binding contracts

Lefkowitz v. Great Minneapolis Surplus Store, Inc.

F- D's advertised in a newspaper that it would sell one lapin stole for $1 on "first come, first served" basis. It refused to sell to P, who arrived first, claiming that the sale was for women.

R-A newspaper advertisement that is clear, definite, explicit, and leaves nothing open for negotiation is considered to be an offer. While the offer may be modified, new and arbitrary conditions not in print may NOT be imposed after the acceptance. (UCC 2-204-recognizes offers even when some issues are left out for future negotiations).

ACCEPTANCE

Def-a manifestation of assent to the terms of an offer in the manner required by the offer

-determined after there is an offer

-Issued by someone who is within the intended group of offerees

-Specific and clear and reflects a commitment

-MUST be a mirror reflection of an offer (any change in terms would be a COUNTER-OFFER)

-under certain circumstances, silence can be interpreted as an acceptance

-when both parties support analytical (linguistic and transactional) terms in a contract

Ardente v. Horan (Conditional acceptance)

F-D's accepted P's bid for their home. In signing the K, P added a condition that some of the furniture be left in the home.

R-A contract is NOT formed by a conditional acceptance unless the original offeror assents to the additional conditions.

-Generally, adding conditions to an acceptance creates a counter-offer

Allied Steel R-Beginning performance with the knowledge, consent, and agreement of the offeror is a valid means of accepting an offer. "Acceptance should be executed on acknowledgement copy" is merely a suggestion.

Mailbox rule (majority rule):

-does NOT apply to offers, but to acceptances

-an acceptance takes effect when it's mailed

-if there is a delay, then the burden is on the offeror

*offeror can negate the mailbox rule by explicitly requesting another form of acceptance from the offeree.Adams-suggests that it's better to be the offeree

Minority rule:

Some courts rule that if an offeror actually receives the rejection first, no contract can be created.

"Overtaking of communications" problem:

-when there is subsequent phone call or email that revokes the offer)

General Rule:

OFFER is effective when received

ACCEPTANCE is effective when sent

Caldwell v. ClineR-Since an offer becomes effective when received, the acceptance period also begins when the offer is received, NOT when it is sent.

Adams v. Lindsell

R-An acceptance sent by mail becomes effective as of the moment it leaves the offeree's control i.e. when it is mailed.

DURATION OF OFFERS:METHODS OF TERMINATING OFFERS:

1. Rejection or counter-offer

2. Lapse of Time (Akers-acceptance made after meeting was held void)

3. Revocation by the offeror (Dickinson-created a situation of irrevocability)

4. Death or incapacity of either parties (Davis v. Jacoby-death revoked the offer)

5. Non-occurrence of any condition of acceptance

Drennan v. Star Paving Co.

F: Drennan, a contractor, used a bid from Star Paving, a sub-contractor, to calculate the costs of a larger bid submitted to a third party. After D was awarded the job, S informed it that its "sub-bid" was erroneously low and refused to work at that price. Although D had not formally accepted the offer, it had relied on the price, as is customary in the construction industry. D sued to recover the difference b/t S's original price and the amt. paid to another subcontractor to do the work.

I: May a party be required to perform by the terms of an offer that was never actually accepted?

R: If an offeror should reasonably expect that his offer will induce reliance by the offeree to take an action or forbearance of a substantial and definite character, the offer is enforceable even if the reliance occurs prior to a formal acceptance of the offer.AGREEMENTS TO AGREE

-when parties have preliminary negotiations in writing

-NOT a real agreement that is enforceable

-need to look at objective manifestations of intent of the parties based on behavior

ArcadianR-A preliminary agreement is binding if the language of the agreement manifests an intent to be bound. Other indications of intent are:

-the context of negotiations

-the existence of open terms

-partial performance

-the necessity of putting the agreement in final form.

Need to ask:

1. Whether the preliminary negotiations of an agreement are binding

2. Whether the parties intended to be bound

3. Is the issue a matter of law vs. fact to be bound immediately?

4. How much weight should be given to the preliminary instrument?

5. "

" in light of the surrouding circumstances?

6. Prior history of dealings between the parties?

7. Are there any relevant presumptions that might be attached?

(Presumptions-freedom from K or binding to K)

Martin

F-5 year lease that had a provision which did not set out specific cost of rental amount

R-agreement to agree about future rental price as NOT an enforceable agreement

-ex. of freedom of K.

C/L Approach:

1. "Mirror Image" Rule-offeror as the master of the offer, who sets out the terms

-offeree must accept the same terms.

-any acceptance that alters terms, is a counter-offer

i.e. a) offer

b) c-offerc)c-offerd) goods shipped & buyer accepts and pays

2. "Last shot" Rule

-last communication prior to the shipment of the goods becomes enforceable

"BATTLE OF THE FORMS"

-form pad (or mass-produced) transactions that are not face to face

-includes small and large transactions, which do not include an offer and acceptance

-focuses on purchase orders, invoices, etc.

UCC 2-207-Additional Terms in Acceptance or Confirmation (p. 513)

-statute as binding

-construe language by giving the plain meaning of the statute

-look at the legislative history, regulations, other similar statutes, judicial interpretations, etc. to help find other meanings.

-aimed at offeree b/c of the focus on acceptance

(i..e. if an offer is silent on arbitration, and offeree adds the term, it would be an additional term)

(1)-assumes that an offer is outstanding

"seasonable"-taken within reasonable time

"definite"-conveys commitment

-not focusing on the "mirror-image" since additional (or different) terms from those offers could be included.

Need to ask:

1. Is there a K formed between the parties based on an exchange of writings?

2. K terms?

(2)

1. Is there a K formed?

2. If yes, what are the additional terms?

1. Is there a K formed based on the conduct of the parties?

2. K terms?

General Rule:

-UNLESS both parties are merchants, additional terms will be viewed as proposals to K and do NOT become part of the K.

-if BOTH parties are merchants, additional terms could become part of the K.

Relaxing Mirror-Image Rule:

1. Horditory approach:

-different terms are only meant to be suggestive or as proposals to the offer.

-terms could still be viewed as an acceptance

2. Additional terms as implicit in the offer

Gap-Filler Provisions (Defenses to the enforcement of a K)

1. Quantity

2. Description of the Goods

3. Parties involved

4. Price

5. Delivery date, time and place

6. Payment

7. Warranty

POLICING AGREEMENTS & PROMISES

-assumes that a bargain has been found b/t the parties

-focuses on misbehavior in a contract which imbalances the relationship

Assent-Oriented

vs.

Content-oriented-bargaining misbehavior

-focus on substantive terms

-assent as artificial

1. DURESS

-party can't be formed to give assent

-objective test to subjective test

-behaved with "ordinary" firmness

Dunham-obj. std as not applicable

2. UNDUE INFLUENCE

-target as susceptible and excessive pressure put on them

-usually based o n some special relationship

3. UNCONSCIONABILITY

Doctrine used to avoid oppression and unfair surprise, but NOT to disturb the allocation of risk in contract formation.

-when the content of the bargain as unreasonable & public policy can be enforced

Types:

a) Procedural

-unfairness in the bargaining process

-courts usually require it before refusing to enforce a K.

b) Substantive

-unfairness in the bargaining outcome

-is criticized for interfering with the private right to K at arm's length.

4. MISREPRESENTATION

-opinion will not trigger an express warranty

1. What is an opinion vs. fact? (if it is a misrepresentation, the K can be rescinded)

2. Was it a fradulent or unwilling misrepresentation?

-burden on the buyer to disprove the claim

-need to understand the degree of reliance or representation

i.e. But for that misrepresentation, P would not had entered into the K.

Application of Public Policy:

-claim often rooted in tort

-defense in a contract (McCutchteon-P's fall down stairs in D's building)

-consistent to exculpate oneself from some negligence, although not for gross negligence.

Karpinski v. Ingrasci

F-An oral surgeon hired another oral surgeon and made him agree not to practice dentistry or oral surgery in five counties if he quit P's employment. D quit and opened his own business.

R-An agreement of a professional not to compete w/his employer is enforceable even if it is for an unlimited period of time if the geographical area is limited and reasonable. However, a prohibition of a type of work which is not competition can be struck from the covenant.

-Courts will NOT enforce an "overbroad clause."

5. MUTUAL MISTAKE

A.The mistake under which both parties are acting must have a material effect on the agreed exchange based on:

1. Proof that one would not have entered the contract but for the mistake is not sufficient.

2. It must be unfair to require the performance

3. Availability of other remedies may lead a court to decide that the mistake's effect is not material.

B. The mistake must involve a basic assumption

C. The adversely affected party must not "bear the risk of the mistake."

MISC. TERMS

Misfeasance

vs.Non-feasance

-performing mistakenly

-not performing at all

Statute of Frauds

-contracts that must be in writing in order to be enforceable.

-need to prove the existence of an agreement (P has the burden of proof)

Illusory promise

-promise in form, but not in substance.

-there is a pre-existing duty on the performance being forbeared

Option promise

-promise of irrevocability

-offer is irrevocable once performance begins

Option contract (Restatement Sec. 87 (1))

An offer is binding if:

a) is in writing, signed and recited consideration

b) is made irrevocable by statute

Worms v. Burgess-example of an option K, and offer was effective upon receipt

UCC 2-205-Firm Offers

A signed writing by a merchant to buy or sell goods that has firm terms and assures that the offer will be held open is enforceable even without consideration

-when an offer that is signed and written is irrevocable

Standard Form Contracts (Adhesion contracts)

Advantages:

1. Save time and reduce uncertainty

2. Allow parties to control risks

-"take it or leave it"

-one party as an individual consumer

-form developed by one party

"Meeting of the Minds"

-when both parties intend to contract and their actions reflect this intention

-both parties have subjective intent and objective behavior

----Mutual Assent is needed to enforce a contract

3/4 Rule (both parties have subj. intent and obj. behavior)-based on subjective intention and objective behavior

-P has burden to prove that 3/4 existed

-D has burden to prove objective behavior would have not shown seriousness

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