Contracts

9 USC § 4 file a motion to arbitration

Remedy for people: The court can make you arbitrate if the court is satisfied that you agreed to arbitrate

9. Illusory Promises

When someone makes an illusory promise, it creates no binding liability; that person does not need to follow through.

R2d § 17 Requirement of a Bargain (must have mutual assent to have a bargain) RULE IN GENERAL

(1) Except as stated in Subsection (2), the formation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration. (2) Whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under the rules stated in §§ 82-94. c. Meeting of the Minds mental reservation of a party to a bargain does not impair the obligation he purports to undertake. The phrase used here, therefore, is "manifestation of mutual assent," as in the definition of "agreement"

Rule 20 - Different meanings... Talked right past each other. Raffles v. Wichelhaus, Peerless- R2d 20 (1), Rupley v. Daggett, Oswald v. Allen

(1) There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and (talking right past each other) RAFFLES (MISUNDERSTANDING) Either both parties are (a) innocent or (b)guilty (2) If one is guilty and one is not then we go with the one that didn't act badly.

11. Contract Formation

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2. (1) Forum Selection and (2) Choice of Law STARTS HERE

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3. The Common Law vs Article 2 of the U.C.C. STARTS HERE

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5. Consideration and the Bargained For Exchange STARTS HERE

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Cases:

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r2d 19 What is essential in the manifestation of assent?

1. Assent has to be effectively communicated: Directly: 1. written or spoken word Indirectly: 1. through actions or conduct 2. Must intend to engage in the conduct or reason to know by his conduct the other party may infer that he assents (3) The conduct of a party may manifest assent even though he does not in fact assent. In such cases a resulting contract may be voidable because of fraud, duress, mistake, or other invalidating cause Morales v. Sun Constructors, Inc. Southwest Airlines v Broadfirst

East Providence Credit Union v. Geremia

Car insurance The bank says hey we will renew the insurance for you. She calls and says OK. She didn't purchase insurance in reliance on the bank renewing the policy. So ergo there was inducement and a contract for the bank to renew the policy. The court also said that this seems that to be a traditional bilateral contract. Offer, acceptance, consideration. They enforced this as a contract HOWEVER it was clearly PE. Court really felt that the promise induced reliance, but if you don't believe us we hold that because (P) was going to add interest to the insurance payments and (D) agreed to pay this interest in addition to the principle amount (P) would pay on their behalf, we will call this a bargained for exchange and thus we have a contract anyways!!!

Steinberg v. Chicago Medical School Black letter rule advertisements are NOT offers but an invitation to make an offer. 1. Offer | 2. Acceptance | 3. Consideration

3 Basic Ingredients of every contract: 1. Offer | 2. Acceptance | 3. Consideration Black letter rule advertisements are NOT offers but an invitation to make an offer 1. Here Offer was: Brochure containing terms under which an application will be appraised is considered Offer. Tender of the application and fee pursuant to the terms of the brochure, was an offer to apply. 2. Acceptance of the application and fee constituted acceptance of an offer to apply under the criteria defendant had established. 3. Applying is considered Consideration consideration requires a 1. bargained for exchange and 2. Mutual assent Meeting of the minds is required- 1. The exchange in this case was the $15 accepted by Chicago Medical School for evaluating an applicant to see if they met their standards to attend the school. The exchange of value for Steinberg was giving the $15 to Chicago Medical School to see if he would be accepted into the school where he wanted to attain an education for his career. 2. Mutual Assent - The parties to a contract must by show of words or conduct that they have agreed to enter into a contract. The usual method of mutual assent is by offer and acceptance. In this case the offer is that Chicago Medical School will evaluate the application according to the standards printed in their bulletin and the acceptance was that Steinberg would pay the application fee of $15

King v. Trustees of Boston University

Case deals with charitable subscriptions R2d$90 - if we are talking about a promise to the charity then we don't need reliance. But courts have disagreed with this. Corretta Scott King case - you need reliance. EXAM TALK ABOUT THE SPLIT OF AUTHORITY Now that promise must be supported either by : Consideration by the pledgee, that is the charitable organization, or by reliance on the part of the pledgee."

Methods of finding potentially illusory contracts enforceable include:

Courts now agree that a promise, express or implied, to use "reasonable efforts" or "best efforts" to merchandise products or pursue some other business objective creates an obligation that is substantial and legally enforceable against the promisor. (good faith is thus applied) (Mattei v. Hopper) (wood v. Lucy)

§ 76. Conditional Promise

76(1)- conditional promise is not consideration if the promissor knows at the time of making the promise it cant occur.... It turns on what 1 party knows... Subjective is looked at Comment a. A promise is conditional if there is an event that must occur before a duty of performance of the promise arises and the condition is that event. Example: In order to buy this house I need a mortgage. Therefore the "condition" is that I first obtain a mortgage. The performance of me buying your house can only occur once I have obtained a mortgage Comment d. Words of promise are not a promise if they make performance entirely optional with the promisor.

6. Arbitration Starts here 9 USC §§ 1-4

9 USC §§ 1-4 Where does congress the power to enact an arbitration clause? Article 1 sec 8 9USC 2 (fed arbitration act) Section 2 Written arbitration clause and involves interstate commerce then it is enforceable... This fed law trumps state law Subsequently, in Southland Corp., we held that the FAA "created a body of federal substantive law," which was "applicable in state and federal courts." !!!!!!!!!!!!!!!!!!!!!!!!!!

1. What is a contract? a promise or a set of promises for the breach of which the law gives a remedy

A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Contract law ensures that agreements are honored.

R2d §1: Contract in general

A contract is a promise. If it is breached the law will provide a remedy or will require the performance of the contract as a duty. "Contract" is a generic term. It includes varieties such as "voidable, unenforceable, formal, informal, express, implied, unilateral, bilateral."

R2d §4: How a Promise May Be Made

A promise can be oral, written, inferred from conduct. A promise can be express or implied. No difference in legal effect, but lies merely in the mode of manifesting agreement. A promise may be manifested in language or by implication from other circumstances.

The doctrine of promissory estoppel can be applied when:

A promissee acting in reliance can obtain enforcement even though there is no consideration. Better to win on a breach because the potential remedy in PE might be less according to 90(1)(d) 1. A promise was made that the promisor should reasonably expect to induce reliance on the part of the promissee. 2. The promissee relied on the promise. 3. Injustice can only be avoided if the promise is enforced. (PCU v. Geremia) car insurance

9 USC § 2

A written provision for arbitration in such contract under section 1 shall be valid, irrevocable and enforceable. Savings clause in 2: to make arbitration agreements as enforceable as other contracts

Rule 24

An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it

9 USC § 1

Arbitrataion contracts cover all employees except for transportation employees. Commerce = "Interestatee commerce"

Pennsy Supply, Inc. v. American Ash 2-304 Relieving the offeror of a legal obligation is sufficient consideration to enforce a contract. Using the "Holmesian formula" for consideration: "The promise induced the detriment and the determined induced the promise"

Article 2-304 priced paid can be "other" (Pennsy). Contract for a sale of goods where the price is paid for with money or otherwise. "Consideration consists of a benefit to the promisor or a detriment to the promisee." Consideration must actually be bargained for as the exchange for the promise." Relieving the offeror of a legal obligation is sufficient consideration to enforce a contract. Using the "Holmesian formula" for consideration: "The promise induced the detriment and the determined induced the promise" HERE: American Ash promised to supply AggRite free of charged which persuaded Pennsy to assume the determent of collecting and taking title to the AggRite. It was this determent that Pennsy assumed that then persuaded American Ash to make the promise to provide free AggRite for the project.

26(b) What about advertisement?

BLACK LETTER LAW: not offers. Even if fairly detailed - Steinberg agreed not ordinarily an offer... Old time ads don't have anything to accept most were just advertising something... Todays even if more detailed - Still BLR most ads aren't offer.

Barnes v. Yahoo!, Inc

Barnes relied on the promise given by Yahoo! Therefore she had a valid promissory estoppel argument Case also talks about the same rules as Feinberg v. Pfeiffer Co She might been able to stop it and continued to try BUT Yahoo said they got this. Thus in this case they said her case should not have not been dismissed.

Common law definition of consideration:

Benefit / detriment

Forms of consideration can be met on either promising or performance. Bilateral and Unilateral

Bilateral contracts: Most agreements involve exchanges of promises. Unilaterial Contract: (lawnmower man) Less common consist solely of "performance". I pay you this and you do this. . I will pay you 5 if you mow my lawn Not before. If you mow my lawn you accept my offer. BUT you have to mow my lawn to accept the offer. The mowing of the lawn will be consideration for the promise to pay the 5.00.

Contracts default rule:. Hotchkiss v. National Bank of New York

By saying nothing the contracting parties adopted the legal rules as if they were included in the contract in the first place.

9 USC § 3

Do arbitration like you should and then come back we will stay the case

r2d 19 - Duty to Read does it matter if you don't read the contract? IS this still assent to it? Schillachi v. Flying Dutchman Motorcycle Club

Duty to read: If you don't read you can still be bound. Mutual assent does not require reading the agreement. Schillachi v. Flying Dutchman Motorcycle Club

consideration requires a bargained for exchange What is exchange?

Exchange (R2d 71) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.is said to be bargained for if it is sought by one party in exchange for his or her promise and is given by the other party in exchange for that promise. QUID PRO QUO - this for that.

1. Forum Selection Clause

Forum-selection clauses forcing individuals to agree to submit to jurisdiction in a particular place are enforceable so long as they pass the test for judicial fairness. Carnival Cruise Lines v. Shute:

U.C.C. § 2-105. Definitions: . . . "Goods" . . .

Goods are movable at the time of identification of the contract ( rather than after the contract is completed) and includes unborn animals, crops.. Neither securities nor the money for the price to be paid. ( BMC Industries, Inc. v. Barth Industries)

Izadi v. Machado (Gus) Ford

He said the offer was bring in the car and it will be worth at least 3000... Why should we treat this as an offer? The court: 20 (2) - One party knows... A reasonable person would understand this to be an offer... The dealer knew it would be treated this way... Why did we apply the rule: Because the ad set it up... Up top then the 3000 on the ranger area... Argument 1 Court said its an offer but they did say the BLR is the real rule... WE are going to depart because of we want to give it to the innocent party 20(2). Sites lefkowitz BUT WHY??? Court said confusing nature of the ad. Argument 2- punish the dealer 18c. Sham or jest-??????? Court said the misleading MUST HAVE made him BELIEVE!!! (NOW SUBJECTIVE) NOT REALLY SUBJECTIVE to be honest this was just a case... right? NEVERLESS BLR- AD is not an offer- you have to explain why its Lefkowitz if you want it to be one!!!

Specht v. Netscape Case deals with the concept of contracts formed in cyberspace.§ 19. Conduct As Manifestation Of Assent Clickwrap

Here online contracts are held to the same standards as written and the terms must be clear. The court said that a reasonably prudent person would not assent to contractual terms that are so inconspicuous that they could completely overlook them. Their intent to contract is judged objectively by the outward manifestation of consent and the transactional context in which the offeree verbalized /acted. Thus here there was no contract § 19. Conduct As Manifestation Of Assent - Clicking on a webpage's clickwrap button after receiving notice of the existence of license terms has been held by some courts to manifest an Internet user's assent to terms governing the use of downloadable intangible software.

Batsakis v. Demotsis Does Consideration need to be equal? R2d § 79(c)

Here she signed a contract to pay him 2500 but he gave her 25.00 for doing it... Rule: Mere inadequacy of consideration will not void a contract.79(c) Do we ever care about the imbalance??? Might matter: 79 (d) = shame or "nominal" consideration 79(e) Fraud Can use lack of capacity, mistake, misrepresentation, duress or undue influence justifying a denial of specific performance. Imbalance by itself is not enough... Has to have more... Free to take bad deals need additional arguement to avoid the contract

Other, Difference to Bratton

If a contract says we can change the terms- it might be illusionary- the court probably will say that to be consideration it would have to be in good faith! Bratton one deal they entered into with 1 promise in exchange for 2 promises. In woodfield it the contract and the arbitration clause were two separate deals. So b/c the arbitration clause contained an illusory promise on the dealership's part, there was no consideration. No consideration thus no contract...

R2d § 79

If the requirement of consideration is met, there is no additional requirement of: (a) a gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promisee; or (b) equivalence in the values exchanged; or (c) Mere inadequacy of consideration will not void a contract Once consideration is met., no additional requirement of equivalence in the value exchanged. parties to transactions are free to fix their own values. The only exception is if the contract was formed fraudlently or one of the parties was misrepresented as far as what they were getting. Facts really have to show there was fraud to apply this.

Does the forum selection clause violate a fed statute?

If there is a statute on law it trumps the forum selection clause.

Mattei v. Hopper

Implied-in-law "good faith" terms Satisfaction clauses do not make a buyers promise illusory. If he acts in good faith on another's promise then that is consideration. satisfactory in this case was based on Mattei getting a loan from a bank in which the leases would be deemed "satisfactory to the to loan people to get his loan.(this normally would be an illusory promise because it is a conditional promise on finding the leases satisfactory) In this case, the satisfaction clause implies P's duty to exercise his best judgment in good faith is an adequate consideration to support the contract. HE had to exercise good faith... thus there was a contract! WOOD- good faith obligation implied

In Lucy V. Zehmer: 18(c)

In Lucy V. Zehmer: The P and the D (while out drinking) wrote a 12 word contract where the D sells his farm to the P signed by both. The P raised the money to buy it. The D arguing the whole thing was a joke refused to transfer the farm and the P sued for specific performance. Supreme court held for the P. It wasn't a joke it was more of a dare to raise the $ and he did. 18(c) c. Sham or jest. Where all the parties to what would otherwise be a bargain manifest an intention that the transaction is not to be taken seriously, there is no such manifestation of assent to the exchange as is required by this Section. If one party is deceived and has no reason to know of the joke the law takes the joker at his word.

Albertson's, Inc. v. Hansen valuable consideration Example of No Reciprocal Relationship thus no Consideration

In order to have a consideration as part of a contract, there must be "valuable consideration" whereby the offeree gives up something in exchange for what they are going to receive by the offeror Is there consideration here? Majority says no! DON'T HAVE TO PAY ANYTHING... IT's free... You got to go to the store.. Dissent: Your going to spend $$$ there... Is this enough?? Is there consideration or not??? No: Didn't pay anything for the chance. People might have spent money but didn't loose it for the chance. Give you a pen but walk to give it.... NOT consideration LOOKING FOR AN EXCHANGE Yes: Benefits to Albertson = goodwill Determent to customers = Time, thought etc...

Sanchez-Lopez v. Fedco Food Corp., Bottle exploded at the checkout...

It is my belief that by presenting himself to the cashier with his merchandise cart for the purpose of registering his purchases and paying for them, plaintiff evinced a definite intention to accept the offer of the seller. A bilateral contract of sale was thereupon effectively entered into at the time when he presented the merchandise to the checker.

If there is no forum section clause and the contract was made by people people in different states? How is this found? Klaxon rule: (and exception!)

Klaxon: The Klaxon rule says that the federal court applies the "choice of law" law of the state in which it sits. (Derived from Erie Doctrine) Then that state's forum selection clause tells us where to litigate. Here Illinois applies restatement 2d conflicts of law. This law in Palmer applied the significant contact rule 188 which said then that CA law was to govern based off the results. Klaxton rule exception!: If a case is transferred then special rule applies it transfers with the FL rules apply...

On a test question for charitable subscriptions

LOOK TO SEE IF THERE IS CONSIDERATION FIRST... NO? now the charity needs to do PE... Do you have to show reliance? 90 (2) NO ... King case YES The outcome will depend on what they apply... This is the answer to the test

Leonard v. PepsiCo, Inc., Ad was not an offer. 18c. Sham or jest - Klaxton exception!

Leonard v. PepsiCo, Inc., Ad was not an offer. What states choice of law rules apply? Klaxton rule exception!: If a case is transferred then special rule applies it transfers with the FL rules apply.... What does the Court end up doing about the choice of law rule? They said they cant follow the FL because we don't know where the last act of the contract was really made... SO then we will apply general contracts law principles to see if the contract was really formed. By doing this the commercial is not an offer- AD's aren't offers, IT referenced the catalog and in there its how to accept the offer - get the points send them in... THIS WAS CLEARLY A JOKE! no objective reasonable person could have concluded that the commercial was not. Looked at the commercial and how it was made. Not justified to say there was assent

Rule 18: manifestation of Mutual assent to an exchange requires a promise...

Manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance.

In r2d 17 it states that there has to be mutual assent (meeting of the minds) to have a bargain... What is that?

Mutual assent is a meetings of the minds: Objective based on usual rules/ law/assent not intent! We are looking for an outward manifestation of assent (clicking on the "I accept" button) (Steinberg) When we look at contract agreements we look at the agreement in an Objective manner rather than a Subjective manner. Hotchkiss (Schillachi / Morales) You are bound to a contract you signed, but failed to read. You are bound to a contract that you signed which was in a different lanaguage you don't understand. (R2d 19) (Southwest Airlines) You can assent even by just visiting a website based on the terms of agreement.

What about 21 comment C???

No legal obligation to family members...The letter he had from his uncle made this beyond than a case to be under 21 The uncle had some unusual manifestation of intention that was necessary to create a contract under the exclusion in 21

UCC 2-201 (enforcement of oral contracts)

No oral contract enforceability on sale of goods for more than $500.

1. Offer

Offer = an offer is something in which the offeror sets out the terms of the contract (by posting an add, brochure, etc.), with the intention that if the offer is accepted, the offeror will be bound by a contract.

Morales v. Sun Constructors, Inc. If the signor negligently failed to learn the contents... he will be bound even if he didn't speak the language. Objective view, he signed. § 19. Conduct As Manifestation Of Assent

One party is ignorant of the language in which the agreement is written. Had a translator Contracts require a manifestation of mutual assent to the exchange and a consideration. Acceptance is measured by the objective expression of assent NOT subjective intent What is essential is the manifestation of assent. § 19. Conduct As Manifestation Of Assent If they act or express to justify to the other party in inferring assent and this action in ways that a reasonable person in their position should have known it was leading the offeror to believe it has been accepted a contract is formed. Both parties must manifest mutual assent Without fraud or duress If the signor negligently failed to learn the contents... he will be bound

R2d § 75

Only what is bargained for in the agreement is part of consideration, anything not bargained for isn't part of the consideration.

Here in Palmer according to the Klaxton rule: Illinois applies restatement 2d conflicts of law. R2d 188

R2D 188! Most states (Illinois in particular) use the "most significant contacts rule" under R2d §188(1) to determine which state has the most connection to the contract and thus which state's contract law should apply to the case. When parts of the contract took place in different states. (Palmer) Klaxon: A fed district court applies the state its sits in choice of law rules! Palmer v. Beverly Enterprises IN Batsakis v. Demotsis, They applied Texas law for a contract made under Greek law

8. Reliance and promissory estoppel

RESTATEMENT 90: is not labeled promissory estoppel (but is) One of the functions of the doctrine of consideration is to deny enforcement to a promise to make a gift. Such a promise is ordinarily enforced by virtue of the promisee's reliance only if his conduct is foreseeable and reasonable and involves a definite and substantial change of position which would not have occurred if the promise had not been made.

"lex loci contractus"

The outdated was the "lex loci contractus" = law of the place where the contract is made

GREAT!!!!! for understanding the above

The requirement laid down in § 17(1) is that there be a "consideration." Under § 71 "consideration" requires an element of exchange. This Section 72 states the general rule that exchange of performance for promise is an enforceable bargain; Sections 73 and 74 deny enforcement to certain bargains despite the presence of an element of exchange

Hotchkiss v. National Bank of New York Words of the contract are there legal meaning unless noted in the contract

The words of the contract are considered to be what the law imposes on the word regardless of the intent of the parties unless there were some mutual mistake, or something else of the sort. The burden is then on other people if they want "something special" to be put in the contract. JUST SAY IT IN THE CONTRACT TO BE CLEAR TO THE THIRD PARTY OBSERVER! Cat = dog is ok if it is said in the contract!

R2d § 9 Parties Required

There must be at least two parties to a contract, a promisor and a promisee, but there may be any greater number.

Vassilkovska v. Woodfield Nissan

They gave nothing true Illusory She also signed a separate arbitration agreement... along with the car agreement... 2 separate agreements. Since they are separate now we need consideration... WN was giving NOTHING when it comes to arbitration... She has too arbitrate and they don't. 77- (a) By making her partake in arbitration but avoiding arbitration itself made it an illusory promise. Thus no consideration.

UCC § 2-102 GOODS

This Article applies to transactions in goods, not security transactions nor does it impair or repeal any statute. NOR SERVICES THIS APPLIES TO EVERYONE!!! NOT JUST MERCHANTS!!!!!!!!!! EVERYONE!!! If it's a good this applies!!!!! IF NOT FOR GOODS COMMON LAW APPLIES!!!

Wood v. Lucy, Lady Duff-Gordon

This case is an example of the court imposing a duty of good faith on a party to perform an implied promise. The promise was an exclusive deal marketing her name (he gets 1/2) she gets the other half.... His consideration is that his implied return promise of going out and making reasonable efforts to market her name... (if he did nothing he would have breached) (good faith obligation implied)

BoneBrake Test / predominant factor test

To determine whether a hybrid contract (goods and services) are transactions in goods. Court determines ""whether their predominant factor, their thrust, their purpose, reasonably stated, is: Which is more involved? 1. The serivice with parts incidentally involved or (e.g., contract with artist for painting) 2. Sale, with labor incidentally involved (e.g., installation of a water heater in a bathroom)." Factors used to determine whether a hybrid-contract is for goods or services: 1. Looks at the words of the contract 2. Looks at the invoice/billing 3. removable goods

R2d § 8 Unenforceable Contracts

Unenforceable contract Is a valid contract if the parties perform their respective portions, but which the court won't enforce. b. Types of Unenforceable contracts - Some contracts are unenforceable because they arise out of illegal bargains, which are neither wholly void nor voidable. Others are unenforceable because of laws relating primarily to remedies, such as the Statute of Frauds (see Chapter 5) or Statute of Limitations.

Pennsy Supply, Inc. v. American Ash Example of Reciprocal Relationship and 2-304

Using the "Holmesian formula" for consideration: "The promise induced the detriment and the determined induced the promise" HERE: American Ash promised to supply AggRite free of charged which persuaded Pennsy to assume the determent of collecting and taking title to the AggRite. It was this determent that Pennsy assumed that then persuaded American Ash to make the promise to provide free AggRite for the project. Article 2-304 priced paid can be "other" (Pennsy). Contract for a sale of goods where the price is paid for with money or otherwise.

Lefkowitz v. Great Minneapolis Surplus Store Usually ads are not an offer! This is an exceptional case!

Usual rule ad is not an offer! Court said the TC disallowed the fur because the price wasn't explicit. (up to 100) The court said the stole was an offer and he accepted it... Why is it an offer? The ad said 139.50 value of the stole... Why get anything? Why depart? First come first served... we know who can accept.. THIS IS THE KEY PHARZE we know who is the person to accept The test of whether a binding obligation may originate in advertisements addressed to the general public is "whether the facts show that some performance was promised in positive terms in return for something requested." Where the offer is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract.

Objective Agreement to Assent Specht v. Netscape

When we look at contract agreements we look at the agreement in an Objective manner rather than a Subjective manner. A party's intent to contract is judged objectively by the outward manifestation of consent (what the offeree said, wrote, or did), and the transactional context in which the offeree verbalized /acted. If its obvious that there are rules them the person is on inquiry notice! (Specht) (MCDONALDS)

18c. Sham or jest-

Where all the parties to what would otherwise be a bargain manifest an intention that the transaction is not to be taken seriously, there is no such manifestation of assent to the exchange as is required by this Section In other cases, there may be doubt as to whether there is a joke, or one of the parties may take the joke seriously. If one party is deceived and has no reason to know of the joke the law takes the joker at his word Where the parties to a sham transaction intend to deceive third parties, considerations of public policy may sometimes preclude a defense of sham

Barker v. Allied Supermarket Follows UCC - not at cashier but contract! [UCC] 2-314(1)

Where is the offer? The product was on the shelf! = offer Where is the acceptance? Taking possession of goods from a self-service display coupled with the intent to pay for them is sufficient to create a "contract for their sale" which gives rise to the implied warranty of merchantability. #3 ALL YOU HAVE TO DO is promise to deliver the goods to the counter. Where is the acceptance? What are the various ways the offer could be accepted? [UCC] 2-314(1) Thus, it is equally reasonable under the terms of this specific offer that acceptance could be accomplished in any of three ways: 1) by the act of delivering the goods to the checkout counter and paying for them; 2) by the promise to pay for the goods as evidenced by their physical delivery to the check-out counter; and 3) by the promise to deliver the goods to the check-out counter and to pay for them there as evidenced by taking physical possession of the goods by their removal from the shelf. When it comes to shoppers changing there minds and putting an item back, this doesn't mean there is no contract it just means the sale of goods under the UCC 106 is terminated. Court said there is a shopping agreement... When does this form? When you enter the store... What are the terms? If I take something off the shelf, I can still get out of the contract! Court wants to make the implied warranty to apply... SOOOO thus a shoppers contract... Had to make it work wanting the warranty provision apply... Exploding bottles we want people to pay not consistent with the contract rules. What was the consequence? Nothing really... no exploding bottles recently... PROBABLY LIMITED to these types of cases. Court was good in sanchez-lopez.... Shoppers agreement not really compelling. The consideration is soda for money.... Putting it the basket... UCC applies? YES a good! Section 2-106 including the following: (1) In this Article unless the context otherwise requires "contract" and "agreement" are limited to those relating to the present or future sale of goods. "Contract for sale" includes both a present sale of goods and a contract to sell goods at a future time. A "sale" consists in the passing of title from the seller to the buyer for a price (Section 2-401). A "present sale" means a sale which is accomplished by the making of the contract. (Emphasis added.)

r2d 19 (3) - What about silent mutual assent? Southwest Airlines v Broadfirst

You can assent even by just visiting a website based on the terms of agreement. Southwest Airlines v Broadfirst

James v. McDonald's Corp.,

You can be bound to an arbitration clause if its not signed? YES! USC 9 2 says in writing! They were written in the restaurant! If its obvious that there are rules them the person is on inquiry notice! (Specht) (MCDONALDS) . Ms. James failed to show that the cost of arbitration was prohibitive: "[A] party seeking to invalidate an arbitration agreement on the ground that arbitration would be prohibitively expensive bears the burden of showing the likelihood of incurring such costs." Green Tree. This is an important step that must be taken before an unconscionability determination can be made: Looks at the ability to pay the arbitration fees and cost, the cost difference between litigation and arbitration ad whether the cost is so substantial as to deter bringing claims

R2d § 80 Multiple Exchanges

You can have 1 promise for a set of promises as long as the consideration for the promise is consideration for all the promises

Bratton v. Bratton, Can you have one promise in exchange for multiple promises?

You can have a situation where one party makes one promise in exchange for two promises. Bratton promised to give wife 1/2 of joint property and 1/2 of his income in exchange she gives him 1/2 of joint property If several things are to be performed under a contract and the consideration is apportioned to each of the items, the contract is ordinarily regarded as severable. However, a contract is not severable or devisable when its purpose, terms and nature contemplate that its parts and consideration shall be interdependent and common to each other++++ 2 for one IN THIS CASE!!!!

R2d § 73

You can't require performance of a contract if it wasn't freely bargained for. For example if you make someone sign a contract under duress forcing them to perform something then that can't be considered "consideration" and so the contract isn't valid. Mistake, misrepresentation, duress, undue influence, or public policy may invalidate the transaction even though there is consideration

R2d § 72

any performance which is bargained for is consideration. (d). Unconscionable and illegal bargains. The rule stated in this Section does not require that consideration have an economic value equivalent to that of the promise. Nor does the Section require that the consideration or the promise be lawful.

§ 64. Acceptance By Telephone Or Teletype

c. Place of Contracting The contract is created at the place where the acceptor speaks or otherwise completes his manifestation of assent. Thus you will find the answer to (1) under the most signification contracts rule when the contract was formed over the phone by following 64.

Local Motion v. Niescher, Latent ambiguity

counter argument CASE!!! Just a mistake case the court messed up. Licensing and distribution agreements- The licensing they agreed to cancel... Now arguing about the terms in the distribution agreement. Nieshcer wants to enforce it... Court said no contract, no meeting of the minds (mutual assent) it was worded wrong... On party says the renewal agreement is a onetime deal... Niesher said no I renew it all! There is an ambiguous term - Well then lets throw it out... Is this a misunderstanding case? No latent ambiguity- you should have know this would be an issue. It shouldn't be agreed that you can renew all you want... THIS CASE IS INCONSITANT AND DOESN'T MAKE SINCE! Ct should determine the construction to be placed on the ambiguous language. Not throw the whole contract out like they did in this case b/c of the ambiguous term..

Restatements 2d Section 17

except where special rules apply, the formation of a contract requires "a bargain" to which the contracting parties give assent and "a consideration", which can take the form of either a return promise or an actual performance..

"Expectation Damage" Rule used as a standard

injured party may recover from the party in breach a dollar sum sufficient to put him in as good a position as he would have occupied had the contract been performed in full. Minus any payments.

R2d § 86

§ 86. Promise For Benefit Received (1) A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice. (DIRECTLY RECEIVED!!!!!!!)

CASES:

...

Mills v. Wyman

A gives emergency care to B's adult son while the son is sick and without funds far from home. B subsequently promises to reimburse A for his expenses. The promise is not binding under 86. It is about the directness of the benefit under 86 (1 benefit DIRECTLY received) son was not a direct benefit.

consideration requires a bargained for exchange What is bargained for? R2D 17

Bargain (R2d 17) To constitute consideration, a performance or a return promise must be bargained for. A bargain is formed when there is a manifestation of mutual assent to the exchange and a consideration.

r2d 19 - What if the person of the contract signs it but doesn't understand the language in it? Morales v. Sun Constructors, Inc.

Doesn't matter! If you cant read the language it its still binding! Morales v. Sun Constructors, Inc.

Hamer v. Sidway

He gave legal things up for $5,000 from his uncle We don't' care whether consideration benefitted the promisee. Refraining from doing something that you are entitled to do under law is a detriment the promisee takes in order to create an enforceable contract. Consideration as a benefit / detriment can be a benefit to the promissee or a determent to the promisor Additional no contract is formed unless he performs if he doesn't no contract is breached

Buckeye Check Cashing, Inc. v. Cardegna,

Here the case is about the validity of the contract as a whole and not specifically to the arbitration clause, must go to the arbitrator. USSC won't address Mental Capacity 4. Courts can decide whether an agreement between the alleged obligator and obligee was ever concluded. IIf you didn't agree to the arbitration agreement, it doesn't bind you then. i.e. someone grabbed your hand and signed for you.

§2-104 | Defines what a "merchant" is.

Merchants are everyone...

Basic Ingredients of every contract: (Steinberg)

Offer Acceptance Consideration

12. Offer starts here!

The Offeror is the master of the offer... He can state what the terms of acceptance can be.... He gets to define the offer...

R2d §7 Voidable contract

Voidable Contract A voidable contract is where one party have the power to break the contract without any legal ramifications because they choose not be bound in a legal relationship with the counter party.

In forum selection clauses it states that they are enforceable as long they pass the test for judicial fairness... WHATS THAT?

What is not fair?: (1)"were not freely bargained for" (2) "create additional expense for one party", or (3) "deny one party a remedy". (4) Contract of adhesion Carnival Cruise Lines v. Shute:

§ 77. Illusory and Alternative Promises

§ 77. Illusory and Alternative Promises 77(a.) Illusory promises. Words of promise which by their terms make performance entirely optional with the "promisor" do not constitute a promise. Here the apparent assurance of performance is illusory, it is not consideration for a return promise.UNLESS: a. The alternative promise would have been consideration for the first promise. (woodfield WAS NOT this)

R2d § 71 (rule + comments a, b, and d)

(1) To constitute consideration, a performance or a return promise must be bargained for. (objective: It is enough that one party induces someone and that someone based on that inducing responses in accordance with the inducement.) (2) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. Quid Pro Quo (looking for exchange) Reciprocal relationship (3) The performance may consist of (a) an act other than a promise, or (b) a forbearance, or (c) the creation, modification, or destruction of a legal relation. (4) The performance or return promise may be given to the promisor or to some other person. It may be given by the promisee or by some other person.

§ 19. Conduct As Manifestation Of Assent

(1) assent may be made wholly or partly by written or spoken words or by other acts or by failure to act. (2) conduct is not assent unless he intends to engage in the conduct and knows that the other may infer from such conduct that he assents (3) The conduct of a party may manifest assent even though he does not in fact assent. In such cases a resulting contract may be voidable because of fraud, duress, mistake, or other invalidating cause.

How do you decide what state has the most signification contacts in the "Most Significant Contacts Rule"? 188(2)

(2) A. Elements needed to determine which state's law applies: i. The place of contracting ii. Negotiation (Which state the contract was being negotiated in) iii. Performance (Which state was the contract ultimately supposed to be performed in?) iv. Location of the subject matter of the contract (where is the base of operations of which this contract is referencing?) AND v. The domicile, residence, place of incorporation, and business of the parties. (Where was (P) domiciled / residing?, Where is the company incorporated?, Where is the principal place where the business this contract set forth be practiced?) The outdated method was the "lex loci contractus" = law of the place where the contract is made Palmer v. Beverly Enterprises

Cases: BMC Industries. v. Barth Industries. Used BONE BREAK TEST / predominant factor Said ucc should have applied remanded.

(P) contracted (D) to design, manufacture, and install automated equipment to speed up production line for unfinished eyeglass lenses. Whether the indefiniteness of the contract showed that it was predominantly for services rather than goods, therefore making the UCC inapplicable. If the contract is a hybrid contract for goods and services, and the predominant nature is for the furnishing of a product rather than services, then it must be ruled in favor of goods Used BONE BREAK TEST / "predominant factor Contracts for the sale and installation of equipment are frequently (but not always) held to be transactions in goods. (here is was sale and installation of equipment) This would have been decided different if the contract said "engineering time" Construction con-tracts, however, such as those for construction of a swimming pool or house, are usually held to be transactions in services.

Schillachi v. Flying Dutchman Motorcycle Club had a duty to read the contract. When is a release for liability contract valid and enforceable?

(P) got into an accident while racing in an organized event sponsored by (3 different D's). (P) had a duty to read the contract. His failure to do so is gross negligence on his part and CT can't help with that. had a duty to read the contract. When is a release for liability contract valid and enforceable? 1. doesn't concern public policy 2. Between private parties and their private affairs 3. The contract isn't a contract of adhesion. If it meets these criteria, the exculpatory clause also has to meet the same following standards. exculpatory clause - contract provision that relieves one party of liability if damages are caused during the execution of the contract. EXCEPTION: If he said someone and they lied to tell him what was in it. Then it would not be valid. It was misrepresented. You cant say sign this and lie about what's in it. SHOW MISREPRESENTATION. Limit: Radically unexpected then should be some limit on not reading. Ex: sign over home if you go on my site.

R2d§17: Contract requires a "bargain" and a "consideration" except where "special rules" apply. What substitutes for consideration?

1. Promissory estoppel/ induced reliance 2.Moral Obligation

Carnival v. Shute Forum selection clause was on a routine contract, thus no equal bargaining power. Thus forum selection clause was no good.

1. Shute's purchase tickets for cruise. 2. In the contract on the ticket it said all disputes will be litigated in Florida. Shut's wife injured on the ship and bring suit in USDC for Western Dist. Of Washington claiming injuries caused by negligence on Carnival's part The Court says that the ticket contract was a routine commercial passage contract. It was not negotiated, and the parties did not have equal bargaining power. This was stated to be a contract of adhesion. So carnivals forum selection clause was not good. This case was an admiralty case where fed courts had original jurisdiction

Basis for enforcement of Promises:

1. consideration 2. 90 - reliance - promissory estoppel 3. 86 - moral obligation

What is a contract of adhesion?

1. contracts of adhesion, form contracts offered on a take-or-leave basis by a party with stronger bargaining power to a party with weaker power.

2. Acceptance

Acceptance = The other party agrees to be bound by all of the the terms of the offer set forth by offeror.

Southwest Airlines v Broadfirst

Case is in fed court. What states law is it going to apply to the state based issues? The Court applies the choice of law rules of the forum state Texas. Has the most signification relation and the parties agreed. "browsewrap" agreement: a situation where a notice on a website conditions use of the site upon compliance with certain terms or conditions, which may be included on the same page as the notice or accessible via a hyperlink. Does not require the user to click to agree assent is given just by using the site. MUST HAVE ACTUAL OR CONSTRUCTIVE KNOWLEDGE OF IT. In Specht they didn't. Contract can be formed by proceeding into the interior web pages after knowledge (or, in some cases, presumptive knowledge) of the conditions accepted when doing so."). Assent has to be effectively communicated. § 19. Conduct As Manifestation Of Assent Assent may be manifested directly, as by the written or spoken word, or indirectly, through one's actions or conduct. § 19. Conduct As Manifestation Of Assent"To manifest tacit assent to a contract through conduct, one must '[intend] to engage in the conduct and know [] or have reason to know that the other party may infer from his conduct that he assents.'" The evidence shows that BF knew this with the first cease and desist letter from SW 12/20/205. Continuing to use the site thus manifests acceptance to SW "offer" to use the site under their terms. Thus a binding contract.

Palmer v. Beverly Enterprises What choice of law is in question because the contract was made by the people in different states... Used Klaxon rule that courts apply choice of law in the state it sits. IL here applied 188 which is the most significant contacts rule. Here CA law applied. "lex loci contractus" = law of the place where the contract is made is outdated law.

Complaint was for $ 150,000 for breach of an employment contract. Count II was for $ 300,000 (including punitive damages) for fraud and alleged that defendant misrepresented that it would purchase plaintiff's Illinois home after he commenced working for defendant in California. What is the correct forum for the hearing of the breach of the contract? The Klaxon rule says that the federal court applies the "choice of law" law of the state in which it sits. In this case it was Illinois which resolves conflicts of law via the Restatements 2d of conflicts: §188: Illinois uses the "most significant contacts rule" under R2d §188(1) to determine which state's contract law Illinois should apply to the case. Elements needed to determine which state's law applies: 1. The place of contracting 2. Negotiation 3. Performance 4. Location of the subject matter of the contract 5. The domicile, residence, place of incorporation, and business of the parties. So based on this California law applies. The outdated method was the "lex loci contractus" = law of the place where the contract is made

3. Consideration

Consideration = Price bargained and paid for a promise or something given in exchange for the promise. ("[T]he formation of a contract requires 'a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.'' Acceptance is measured not by the parties' subjective intent, but rather by their outward expressions of assent. (Steinberg, Definition from dissent in Bratton as well)

4. Mutual assent starts here OVER VIEW

Consideration = Price bargained and paid for a promise or something given in exchange for the promise. (Steinberg, Definition from dissent in Bratton as well) What is a Bargain? (R2d 17) To constitute consideration, a performance or a return promise must be bargained for. A bargain is formed when there is a manifestation of mutual assent to the exchange and a consideration. What is an Exchange? (R2d 71) A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.is said to be bargained for if it is sought by one party in exchange for his or her promise and is given by the other party in exchange for that promise. QUID PRO QUO - this for that. In r2d 17 it states that there has to be mutual assent (meeting of the minds) to have a bargain... What is that? Mutual assent is a meetings of the minds: A contract has nothing to do with the [personal, or individual, intent of the parties. We are looking for an outward manifestation of assent (clicking on the "I accept" button)

Consideration in a nutshell

Consideration is what distinguishes enforceable promises from those promises which are merely gratuitous. Courts will not enforce gifts or gratuitous promises but they will enforce promises that are supported by consideration. CL: Consideration is defined as any act or forbearance which is a benefit to the promisor or determent to the promise. Consideration must arise in a bargained for exchange. This means the promise must induce the determent and the determent must induce the promise. The act or forbearance must have been bargained for and given in exchange for that very promise for legal consideration to be present. Therefore promises made in recognition of a benefit previously received fail to bargain for exchange test and considered to be merely gratuitous promises.

10. Moral Obligation and Past Consideration Starts here

The general position, that moral obligation is a sufficient consideration for an express promise, is to be limited in its application, to cases where at some time or other a good or valuable consideration has existed. Direct Material Benefit!

COLFAX- Latent ambiguity

Other half of 20... Sometimes when the parties talk past each other there is a contract... Both innocent... What if party is blameworthy? The restatement say speak up we will enforce the contract to the innocent person... The person being bad wont get their way. COLFAX- Latent ambiguity this case is about that problem... color press- Court said - unusual class of case - you were talking about the same thing. Posner said - Ambiguity should be obvious to people. Any reasonable reader could read "4c 60" is Patent defect, NOT Latent defect. Its obvious on its face.. The parties said lets throw the dice- lets hope it goes our way... Court said case is not raffles... They were arguing about the arbitration... Court said at least there was a an agreement to arbitrate... Contrast with wwn - had 2 separate contracts... Doesn't apply here... Even if it did fall in ruffles "latent defect" what they argued about wasn't the arbitration agreement so arbitration agreement is enforceable. Spect- wouldn't be bond to arbitrate - Like Colfax? If Colfax is right does that spect wrong? Nothing about contract was visable in Spect- whole contract had issues- Nothing there- They didn't know to click the link...Colfax- parties agreed to arbitrate... They at least agreed on that.

Newton Tractor Sales, Inc. v. Kubota Tractor Corp

PE is a recognized cause of action in IL SEPARATE TO BREACH OF CONTRACT!!!! IT is still also used as a Defense claim

Raffles v. Wichelhaus, Patent ambiguity PEERLESS!! 20(1)

Peerless- R2d 20 (1) The parties talked right past each other... We do have to ask them what they are thinking? (a bit subjective then) If then intend the same ship then a contract OLD COURT RULE 1864: Finding that there had been no "consensus ad idem" - No agreement on the same thing.

7. Promises to make a gift Starts here

Promise to make a gift in the future is typically not enforceable. However, there are certain situations in which this is enforceable.  1. On the grounds that the promisor and the promisee have struck a bargain. 2. The promisee is relying the fulfillment of the promise, and if the promise isn't enforced then the promisee will suffer some type of injustice.

Ricketts v. Scothorn

Promissory Estoppel (Defense) R2d90 No consideration. But if (P) takes some costly step by acting in good faith upon the promise, then (D) is estopped. There was no consideration in this case. No quid pro quo. Grandfather neither sought a return promise or a performance from his grandaughter. The promise was nonreciprocal. Ricketts claimed good faith reliance on the promise made by her grandfathers promise and took reasonable steps to stop working, based upon the foreseeability of the fulfillment of the promise.. As a result, the court granted her a promissory estoppel whereby the estate of grandfather was Estopped from not paying money to Ricketts on the grounds of equity and fairness from claiming "want of consideration"

Feinberg v. Pfeiffer Co., 90

Retirement money The promise set forth to her induced her to quit. She relied on it. promissory estoppel is now a recognized species of consideration." Promissory estoppel' is not a 'cause of action' in itself; rather it is a subset of a theory of recovery based on a breach of contract and serves as a substitute for consideration." The restatement says it is a contract! Restatement 90 (d) a promise binding in this section is a contract! You can thus call it a contract without consideration. Restatement says it's a contract, courts say its NOT a contract but its enforceable. But in the end it's the same out come. The remedy's are different for both thought... Breach of contract (with consideration you can possible get more $$$) If you are basing on PE (reliance) then you can be limited. 90 (1) The induced 'action or forbearance' is binding for the promise if injustice can only be advoided by doing so. Feinberg v. Pfeiffer Co., (Hoffman v. Red Owl)

Masline v. New York - Example of how Unilateral Contract works

Rule used here is: For there to be consideration for contracts of this kind the P must offer a new idea or if the idea is common then he must present a specific method of his own for the common idea. Information must be NEW: A statement to one of what he already knows is not as to him information, but merely a statement of a fact already known The agreement was conditional upon receiving information of value. The contract alleged is fundamentally defective for want of consideration. Unilateral Contract: Railroad made a promise. In order for there to be a contract, the performance needs to be done by masline This would then equal consideration. (restatement 17 bargained for exchange) No performance no consideration no contract. The offer to pay, after due deliberation, invites consideration in the form of a performance (or a promise to preform) and once the consideration has been supplied by the promissee there is a "contract" and the promisor is bound.

Samples v. Monroe- Nest egg for sex r2d 78

Rule: "A contract to do an immoral or illegal thing is void" "It is well settled that neither a court of law nor a court of equity will lend its aid to either party to a contract founded upon an illegal or immoral consideration. Here there was consideration but the contract cant be enforced because it is void!

Webb v. McGowin

Saves mcgowin from a falling wood block... A moral obligation is a sufficient consideration and will support a subsequent promise to pay, where the promisor has received a DIRECT benefit, although there was no original duty or liability. What was the consideration for McGowins promise? McGowin received material benefit of having his life saved at the expense of having (P) becomes crippled constituting a valid consideration for his promise.

Rupley v. Daggett Patent ambiguity

Selling for 165 thought I was buying 65 20(1) Mutual misunderstanding, Talked right past each other neither party was blameworthy no contract Old rule: It is according to natural justice, where there is a mutual mistake I regard to the price of an article of property, there is no sale, and neither party is bound

Dougherty v. Salt A true gift case!!!!!!!

She gave a kid a note because he Was a nice boy. This is a gift promise... No promise or performance on the kids Part thus no consideration! The note was merely a voluntary but unenforceable executory promise. Can we use estoppel? No the was no reliance in this case! (ricketts) Thus no estoppel!

Ads aren't offers BUT what about things on a shelf? Lasky v. Economy Grocery Stores,

Shopping, went to grab tonic and it exploded in her cart.. Filed tort action... Claimed breach warranty- this depends on if a contract is there. Where's the offer and acceptance? Looking for the contract for sale... Where is the offer and where is the acceptance? Your taking it off the shelf this is the offer... She didn't make it to the Cashier... Where is the expectance? The court said: The acceptance is when you get to the cashier. You can just put it back if you want... Concludes: there is no breach of warranty, not contract for sale... NO!!!!

Schroeder v. Fink 71 and 79 V. Common law determent/benefit

Shorder v Fink now shows under different test might equal different outcome... Note of dead person, kid promised to pay. No legal obligation to pay. This PROMISE TO PAY FOR THE NOTE... They don't pay. He sues... NOTE traded for the money... NO CONSIDERATION... The paper has no value. This case is the example of the difference in the detriment/benefit and 71 Common law definition of consideration: Benefit / detriment - needs value $$ If no value it is: a nudum pactum: Would be an offer to sell something without a corresponding offer of value in exchange. Then its no consideration because its worth nothing Restatement 71 a bargained for mutual exchange: 79 Restatement says no value needed just to be bargained for. Rare case where when applying com law v. restatement test for consideration resuts in different outcomes. F: promise was to pay in exchange for deliverance of note, not in exchange for paying dad's debt. Com Law: R: No benefit / detriment for consideration. Why? A: This was a promise to give nothing. Can't have a consideration where you promise to give nothing. Restatements R: Yes. A: Bargained for exchange r2d 19 - doesn't have to have value as long as there is a bargain.

Prima Paint Corp. v. Flood & Conklin Mfg. Co

Sum Up: Both company's signed a contract to Arbitrate. PPC said that they were "fraudulent inducement" into the contract and thus filed a claim requesting a recession of the agreement due to F&C not being a viable/ solvent company thus frauduitly misrepresented itself. Prima Paint, Thus, "a court may consider a claim that a contracting party was fraudulently induced to include an arbitration provision in the agreement but not claims that the entire contract was the product of fraud." Made the "separability principle" in contracts with arbitration clauses. 1. Any contract that has an arbitration clause requiring any challenges to the enforceability of the contract first must be heard by an arbitrator, not a court. 2. The only exception is If the parties dispute that the arbitration clause, itself is invalid, then a court can hear the case and determine if the arbitration clause is valid.

Oswald v. Allen Patent ambiguity

Swiss coin- 2 very different coin collections... Language barrier... There is no contract. Court said this Is raffles...

Amirmotazedi v. Viacom, Inc.,- Real world

The P states that she was too drunk and lacked the mental capacity to sign the Arbitration Agreement. This case is a problem about the whole contract Because this mental capacity defense goes to the formation, or the "making" of the Arbitration Agreement, under § 4 of the FAA it must be decided by this Court. Consequently, Defendants' Motion to Compel Arbitration is denied.. Restatement: 16 (intoxicated) Says there is a voidable contract when intoxicated comment (a) Remember under buckeye if you argue that a contract wasn't formed then it goes to arbitration. However, its grey about mental capacity defense making a contract void. That's why (P) used this defense rather than claiming the contract was never formed.

R2d § 78 Unenforceable promises

The fact that a rule of law renders a promise voidable unenforceable does NOT prevent from being consideration.