Contracts MT

implied in fact

rsbly iplied by parties' conduct

Types of transactions raising consideration issues: Settlement of claims based on incorrect info

R §74 provides that promises to not bring or surrender a claim that turns out to be invalid is not enforceable unless: 1. Claim is doubtful b/c of uncertainty to facts or law OR 2. Surrendering party believes (at the time of settlement) that the claim may be valid 3. One of the 2 things above will almost always be true, so usually these promises are enforceable even if a claim turns out to be invalid

rules for restitution with Ks involving minors

Any K w a minor is voidable by minor. (Credit, cash, etc.) SPLIT is that jdx vary whether the credit sale calls for minor to pay restitution. Restatement says you don't get restitution. Other jdxs disagree and say restitution required. Cash sale - always restitution.

What is an offer under R § 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." i. I.e. it will be "justified" for the "other person" to believe an offer has been made if a reasonable person in the shoes of the offeree would believe that: 1. a bargain has been offered by the offeror 2. that the bargain was offered to him or her 3. and that if he or she says "yes," the bargain will be concluded.

what are specially manufacture goods under UCC?

"Specially manufactured goods" are goods "manufactured by the seller and not suitable for sale in the ordinary course of the seller's business."

III. Three types of fact situations where indefiniteness doctrine comes into play:

(1) where the parties to a contract have not agreed to a term, i.e., a term like delivery or price or delivery date is left out of their agreement for some reason 2) where the parties have agreed to a term, but the term itself is so ambiguous that it is impossible to ascertain its meaning, e.g. the parties agree to the purchase and sale of a "schemer" of televisions; and (3) where the parties have "agreed to agree" to negotiate a term sometime after contract formation, but then never reach an agreement on that point (4) The parties agree that the term will be decided by some third party, and the third party does not provide the term.

for UCC applicability, what are "Goods"?

-Goods' means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale." -

how can terms be left open?

-Nothing said as to the term - Parties agree to agree on term later -Parties agree term tbd by 3rd party and 3rd party doesn't provide term -When parties don't intend to be bound unless term is defined, no K

future goods- ucc

-goods which are not both existing and identified are future goods -good under UCC since product is moveable when the one selected for buyer has been picked.

identification -ucc

-when a specific good is identified as pertaining to that k, occurs when goods are shipped, marked, or otherwise designated by seller as to which goods the k refers (buyer can purchase insurance once good is identified)

e. Hierarchy of terms 1-303(e) (for indefiniteness)

1) Express terms, 2) course performance, 3) course dealing, 4) usage of trade, 5) gap fillers

when terms under 2-207 are different, what are the three theories on how to handle?

1. Different terms treated the same as additional terms (look at 2-207(2) exceptions) 2. Literalist approach: different terms drop out and can never become part of K w/o offeror specifically agreeing to them a. Different terms will not prevent a K from being formed under 2-207(1), but b/c "different" doesn't appear in 2-207(2), those different terms never are included b. Seller cannot reasonably expect different terms in acknowledgement to be controlling 3. Comment 6 approach: different terms will be "knocked out" of the deal, and either there will be no term on that issue or a gap filler or implied term of UCC will control a. Under literalist, terms of offer become operative, whereas w/ comment 6, neither party's terms become operative either there is no term at all or a UCC term/filler will be implied

Factors as to Whether Parties Intend to be Bound Only After Written Agreement

1. Express Reservation in "Preliminary" Agreement a. B and S sign an agreement that says, "This arrangement is not entered into . . . as a formal legal agreement . . ." It's an "honorable pledge" b. (a) Does B have a claim if S refuses to send goods? c. No. Under objective theory of K, neither party would be reasonable in believing an enforceable K had been formed. d. R § 21, ". . .[A] manifestation of intention that a promise shall not effect legal relations may prevent the formation of a K" 2. Partial Performance a. (b) If S ships goods and B accepts them, can S sue B? b. Yes. By sending and accepting goods, conduct shows there was mutual agreement at least for those goods. R § 19(2) c. Under R § 18, S "render[ed] a performance." 3. All Essential Terms Agreed Upon 4. Complexity and Magnitude of the Agreement

acceptance analysis

1. Make sure the offer is still open when it is purportedly accepted, i.e., determine whether the offer is revocable or irrevocable, and whether any act or event has occurred that will terminate the offeree's power or right to accept 2. Make sure the party who accepts the offer has a valid power of acceptance, meaning the offeror gave the party a power of acceptance when making the offer or that the accepting party has been assigned the right to accept under a valid option contract by a proper offeree; 3. Make sure the offer is accepted by a proper method or mode of acceptance, i.e., one that is either specified in the offer, or is reasonable under the circumstances; 4. Make sure the acceptance is timely, either in light of the time specified for acceptance in the offer, or a reasonable time if no time is mentioned, always keeping in mind the mailbox and delayed communication rules regarding the effectiveness various communications; and 5. Lastly, keep in mind that acceptances are judged under the objective theory of contracts, so that the intent of the accepting party is not controlling. Watch out for the special problems associated with specific issues such as cross-offers and general or reward offers

Effect of Performance or Reliance on uncertain terms

1. The terms of a K may be reasonably certain even though it empowers one or both parties to make a selection of terms in the course of performance i. HYPO: Vendor at amusement park calls out, "For $2, your choice - a snow cone or cotton candy." Customer gives the vendor $2 without saying anything. Does the contract fail for indefiniteness? 2. Part performance under an agreement i. HYPO: Mr. and Mrs. Moneybags contracts with a cleaning service to, "clean our home in Beverly Hills," once a week for $250. Mr. and Mrs. M. own two homes in Beverly Hills, although his main residence is on Maple Drive. Cleaning Crew shows up at the Moneybags' home on Olympic Blvd., is let in by Mrs. Moneybags, and allowed to clean the home. Mr. and Mrs. Moneybags now refuse to pay claiming there was no contract based on indefiniteness. What result? ii. Enforceable K, based on R § 34(2) - "part performance . . . may remove uncertainty and establish that a K enforceable as a bargain has been formed." Court can determine whether K has been breached and can fashion a remedy. 3. Action in reliance on an agreement may make a contractual remedy appropriate even though uncertainty isn't removed.

Agreements to Agree in Non-UCC Transactions

1. Traditionally, courts have been reluctant to enforce non-UCC contracts where the parties have "agreed to agree," but subsequently failed to do so. The Restatement, however, suggests that, at least for some terms, courts should take the UCC approach and imply a reasonable term to fill in when the parties fail to reach a post-contractual agreement after agreeing to do so. 2. HYPO: For example, assume that under a lease the parties provide a fixed rent for the first ten years, but then give the tenant the right to lease the premises for the subsequent ten years at a rent "to be agreed on after the initial ten year term." The tenant wants to continue to occupy the premises for years 11-20, but the parties are unable to reach agreement on a rental amount. If this were a UCC agreement, the court is empowered to supply a reasonable rental amount. However, because a lease is not governed by the UCC, the traditional (and still majority) rule is that a court will not enforce the lease for years 11-20 because there was an agreement to agree on a material term, without an agreement being reached.

analyzing offer problems

1. You'll likely be given several communications bw the parties (multiple conversations, phone calls, letters, emails, etc.) and you will have to figure out which of these communications constituted the offer. 2. Key is whether a rsbl person in the position of other party would believe the communication by the offeror signified an intention and commitment to be bound. 3. Remember rules distinguishing offers from other communications. 4. Remember that subjective intent of offeror is irrelevant.

What are the UCC's gap fillers?

1. the price of the goods the buyer must pay and the price the seller must accept 2. the mode of delivery 3. the place of delivery 4. the time of delivery and 5. the time and place for payment

effect of acceptance

A valid acceptance cuts off the offeror's right to terminate the offer, and also cuts off the offeree's right to reject the offer.

gap filler for the time of delivery

If no time for shipment or delivery is agreed upon, seller must tender the goods within "a rsbl time." What is rsbl depends on circumstances, e.g., how complicated the good is to make, past dealings, industry practice

CERTAINTY/ INDEFINITENESS Restatement § 33:

Even though a manifestation of willingness is intended to be understood as an offer, it cannot be accepted so as to form a K unless the terms are reasonably certain. II. The terms of a K are reasonably certain if they provide a basis for determining the existence of a breach, and for giving an appropriate remedy.

III. If an illegal K is wholly executory, neither party can enforce it Except:

Except: a. Ignorance of facts at time K made if party is justifiably ignorant of facts making K illegal, party may treat K as voidable after learning facts b. Statutes designed to protect a particular class party so protected has option to avoid

V. Types of consideration in bilateral Ks under bargain theory

each party's promise serves as consideration for the return promise if: a. Each promise was sought by and given in exchange for the other & b. The performance promised by each party would be valid consideration if carried out (i.e., promises are act, forbearance, or creation/modification/destruction of legal relationship)

Rejection or counter-offer by offeree (terminates acceptance)

o Immediately cut off power even if offer to be held open (except when otherwise is explicitly stated) o Counters implicitly reject offer and propose new one o Judged under objective theory o Rejection is effective upon receipt by offeror (see mailbox rule)

OBJECTIVE THEORY OF Ks (mutual assent)

I. For a K to be valid, the parties must manifest a mutual assent to be bound (both parties must be bound). i. We look at whether a reasonable person in position of the party who seeks to enforce the K would conclude that a K has been formed (i.e. whether a rsbl person would believe that both parties have objectively agreed to be bound to the same bargain - that they have agreed to be bound by a legal obligation, NOT whether a both parties subjectively believe they have a deal.) 1. E.g. taking a walk, agreeing to go on a date not a K bc rsbl person wouldn't believe both parties have agreed to be bound by a legal obligation

Power of acceptance under option K NOT terminated by:

I. Rejection II. Counter-offer III. Revocation IV. Death or incapacity of offeror

What terminates irrevocable offers?

I. Upon expiration of reasonable time (or time specifified) in an option K or merchant's firm offer (or reasonable time for implied Ks under R §45 or 81(2)) II. Supervening destruction or death of thing essential for performance (non-occurrence of implied condition) III. Supervening illegality (non-occurrence of implied condition) IV. Non-occurrence of express condition that is necessary for acceptance (usually specified in option K or merchant's firm offer) V. Death/incapacity of offeree VI. Under majority rule - rejection/counter by offeree followed by reasonable, foreseeable, and detrimental reliance by offeror

when offer will be deemed irrevocable

I. option K (R §25) a. defines the length of time the offeree has to accept creates an irrevocable offer (offeree has right to accept) b. needs own offer, acceptance, consideration (usually $) c. R §87(1) says option K is enforceable even if there is only "purported" or "recited" consideration d. Under R option K needs to be 1) fair; 2) in writing; 3) signed by offeror e. Option Ks give more damages than promissory estoppel II. merchant's firm offer (UCC 2-205) a. merchant's offer may become irrevocable even w/o consideration if: i. offeror is merchant UCC 2-204(1) ii. offer in a writing signed by merchant offeror iii. writing expressly states that offer is intended to be irrevocable or held open b. if requirements met, offer will remain open for reasonable time but not longer than 3 mos (or time stated) III. beginning of performance in response to unambiguous offer for unilateral K (R §45) note issues regarding beg. Perf. §62 a. offer becomes temporarily revocable for a reasonable period in order to allow offeree to complete performance he tendered (e.g., Brooklyn bridge example) b. problem when is beginning/tender perf? i. Tender = manifestation of willingness and ability to perform c. Problem offeror forced to leave offer open if offeree begins perf but offeree not required to complete i. Offerors choice to make offeree a unilateral K offer, so suffer consequences - could have sought a promise instead IV. equitable offer when offeree substantially and foreseeably relies on offer and when requirements of R §87(2) are met a. power to revoke is terminated to avoid injustice when: i. offeree takes action (or forebears) of substantial nature in response to offer ii. action is reasonable foreseeable given the nature of the offer

undue influence- restitution?

III. Victim entitled to restitution and must make restitution to the stronger party

offer made while intoxicated

K is voidable only if the offeree had reason to know of intoxication and even then only if a) offeror is so drunk he can't understand nature of the transaction or b) offeror is so intoxicated he's unable to act in a rsbl manner with re to the transaction. Hence, if the offeror understands the transaction somewhat, it'll be enforceable unless intoxication was induced by offeree, the consideration was inadequate, or the transaction was a departure from the "normal pattern of similar transactions," so that a rsbl offeree would realize offer wasn't intended to be acted upon.

express k

K results from words

acceptance

Manifestation by the offeree that he's willing to be bound to the agreement proposed by the terms of the offer [R § 50(1)]. Acceptance can be written, oral, or expressed by conduct. In most situations, acceptance is the last communication required for K formation.

No Gap Fillers Regarding what?

Subject Matter (what they bargained for) of the Contract or Quantity

acceptance objective theory of Ks

Test to Determine Whether Acceptance has Taken Place.- Whether or not an offeree has accepted an offer is judged under the objective theory of Ks. The test is whether, to a rsbl person in the position of the offeror, offeree has manifested a willingness to be bound by the terms of the offer. If so, a valid acceptance has been made. i. not whether the actual offeror believed an acceptance had been made, but whether a hypothetical person, standing in the shoes of the offeror, would believe the offeree has manifested a willingness to be bound. ii. Sometimes an offeree may accept offer w/o even knowing its contents or having the slightest idea that he has entered into a K. As long as the offeree at least knew that some sort of offer had been tendered (even if exact terms are unknown) and as long as a rsbl person in the offeror's position would've believed an acceptance had been tendered, acceptance is valid.

Types of transactions raising consideration issues: exclusive dealing Ks

one party promises to give the other the exclusive rights to sell his goods (usually limited by time or geography) UCC §2-306(2) i. Arguably illusory b/c the other party is not obligated to sell the goods, but the supplier is obligated to supply enforceable by implying a duty of good faith on the selling party - majority of courts say "reasonable effort" to market goods (UCC says "best effort")

void def.

party cannot enforce the K even if he wanted to, has no legal effect

voidable def.

party who has the option to disaffirm the K based on a defense to formation has a defense to his non-performance; party can choose to enforce K if he wants

Presumptions in contractual intent

There is a presumption that neither party to an agreement intends for a promise to be a legally enforceable duty when they live together as a family in a domestic situation, when they are related to each other in some fashion closer than second cousins, or in certain social situations such as when they agree to take a walk together or dating. a. However, that presumption is rebuttable by facts to the contrary, indicating that related, domiciliary, or socially acquainted parties intended their promises to be enforceable, or indicating that the receipt of benefit by the other carried with it an implied promise of payment.

Why won't courts enforce "indefinite" contracts?

Three reasons are generally given as to why a court will not enforce a contract when it cannot ascertain essential terms with sufficient certainty: (1) if a court does not know what a term to a contract is, the court cannot tell whether that term was breached; (2) if a court does not know what a term to a contract is, it cannot fashion an appropriate remedy for the breach of that term; and (3) courts have traditionally expressed a reluctance to rewrite a contract for the parties, which they would have to do in order to enforce an indefinite agreement. In other words: "courts interpret contracts, but do not write them."

The "Gravaman" Test

Under this test, the court asks what is the gravamen of the cause of action. That is, it determines whether the buyer is complaining about a problem with non-conforming goods, or whether the buyer is complaining about negligent service. If it is the former (the heater was defective), Article 2 would apply; if it is the latter (the valve was negligently tightened), the suit is decided under tort principles regardless of the "predominant purpose" of the transaction. The trend of modern decisions is towards adoption of the gravamen test, but the predominant purpose test is probably still the majority rule.

II. Duress by improper threat - void or voidable?

VOIDABLE BY V a. Improper threat when terms appear fair if what is threatened is R §176(1): i. a crime or tort ii. criminal prosecution iii. bad faith use of the civil process iv. breach of the duty of good faith and fair dealing with regard to the modification of an existing K b. Improper threat where terms appear unfair if R §176(2): i. Threatened act would harm recipient and not really benefit the party making the threat 1. E.g. Sam threatens Ben to reveal his extramarital affair unless Ben sells him his $15k sterero for $5k. since revealing the affair would harm Sam and not benefit Ben, threat is improper. 2. Prior dealing btw parties significantly increases the effectiveness of the threat 3. Threatened action is a use of power for illegitimate ends c. Where threat is by a 3rd party i. Voidable unless other contracting party K'd in good faith and w/o reason to know of the duress gives value or relies materially on the transaction d. Victim is entitled to restitution if avoids a K based on duress and must make restitution e. Duress must be caused by party seeking to enforce K. can't be caused by a third party or thing, like economic duress. (e.g. accepting a high interest loan bc you desperately need the money.)

usage of trade to cure indefiniteness

When appropriate, a properly proven usage of trade, course of dealing, or course of performance can be used to cure an indefinite contract. For example, a contract calls for Contractor to deliver "a load" of gravel to a building. If within the trade "a load" has a more specific meaning, e.g., 100 pounds, then understood usage of trade will make the contract enforceable.

I. Benefit/Detriment Theory

promise deemed supported by consideration whenever: a. Promisee either acts or promises to act in exchange for the promisor's promise & b. The promisee's act or promised act is either a legal detriment to the promisee (note, promisee) or a legal benefit to the promisor

bilateral K

Where the agreement is a promise in return for a promise; i. Where the agreement is a promise in return for a promise ii. Both parties make mutual promises to each other. 1. E.g. suppose Jill promises to pay Ed $1k if he will agree to paint her house next week. Here, Jill has made an offer to enter into a bilateral K for she seeks a promise of performance in return from Ed. If in response to Jill's offer, Ed promises to do the painting next Thursday, then Ed has accepted Jill's offer and a bilateral K has been formed.

Unilateral K

Where the agreement is a promise in return for an action. i. Eg. Jill and Ed agree that Jill will pay Ed $1k if Ed paints Jill's house. If Ed finishes the painting they have entered into a unilateral K bc only one party, Jill, has made a promise i.e. to pay; and that promise is made in exchange for an act by Ed, i.e., the painting, in order to accept. So Ed's performance in painting the house (as opposed to his promise to paint) acted as acceptance of Jill's offer. ii. Only one party makes a promise, in the form of an offer, which calls for the other to render some sort of performance as acceptance.

Offer Objective Theory of Contract:

Whether a reasonable person in the position of the offeree would believe that an "offer" had been made, i.e., would be justified in believing that a willingness to enter into a bargain has been manifested such that his or her assent has been invited, and will conclude that bargain. -i. I.e. it will be "justified" for the "other person" to believe an offer has been made if a reasonable person in the shoes of the offeree would believe that: 1. a bargain has been offered by the offeror 2. that the bargain was offered to him or her 3. and that if he or she says "yes," the bargain will be concluded.

Can voidable promises serve as valid consideration? EXAMPLE?

YES,. E.g., a promise voidable b/c the promisor is a minor can still act as valid consideration if the promisor wants to enforce K

Offer distinguished from statement of future intention

a statement that a party is thinking about making an offer, or may be willing to be bound in the future isn't an offer, it's only a statement of future intention or an invitation to make an offer. i. E.g. Ted tells Barbara, "I decided last night to sell my boat for $5k." Barbara say I accept. 1. No K bc a rsbl person in Barbara's situation would conclude Ted was merely stating his future intention to make an offer to sell the boat.

Offer distinguished from Preliminary negotiation or invitation to make an offer

a statement that solicits the other party to make an offer isn't an offer itself, but rather a preliminary negotiation or invitation to make an offer. (Are you interested in...? or would you give...? are typically deemed invitations to make an offer bc a rsbl person wouldn't find a power of acceptance created in these statements. i. E.g. Bruce tells Gloria "would you consider selling your car for $10k? and Gloria responds "it's yours." No offer bc Gloria's the one to have made offer bc to a rsbl person in Gloria's position, Bruce has only entered into preliminary negotiations. ii. Eg. A woman goes to Von's grocery store and buys some apples. Who is the offeror? 1. Putting the apples out in the produce section is an "advertisement of goods by display . . ." R § 26, Cmt b. Thus Von's is only soliciting offers; not making one. 2. It is a "preliminary negotiation." Woman is the offeror; the store is the offeree. iii. Lonergan v. Scolnick - Seller placed an ad in the paper selling land. P wrote a letter to seller asking about the parcel and indicating interest. Seller sent a "form letter" in response and indicated P would need to act fast bc he expected to have a buyer soon. P sent form back and argued that constituted acceptance of seller's offer. 1. Held: the ad and form letter weren't an offer since they didn't indicate to a rsbl person in buyer's position that seller intened to be bound by P's acceptance. iv. E.g. Fred, a contractor, calls up Home Depot and asks how much HD is charging for a DeWitt 18 volt cordless drill. The Home Depot representative says, "We're selling it for $85." Fred says, "I accept." 1. No K, "Price lists" are preliminary negotiations/solicitations for offers v. Chicago Tribune publishes a booklet for General Advertising Rates. Essentially it was a few pages that said, e.g., "1/4 page ad for 1 week . . .$35.50" The first page of the booklet says Tribune would refuse ads that were "dishonest, indecent, or illegal." Labor union wants to run an ad seeking boycott of a department store b/c this store refuses to buy union-made clothing. Running such an ad is not illegal. Tribune nonetheless refuses to run ad. 1. No offer bc no "language of commitment" in booklet which would overcome the presumption and thereby make it an offer. The booklet is a solicitation for offers. R § 26, Cmt. b. 2. Besides, the booklet didn't say the paper would run all ads that weren't "dishonest, indecent, or illegal;" it just identified some reasons why it would not run ads.

A contract is (Restatement)

a. "A promise or a set of promises for the breach of which the law gives a remedy" or b. ". . . the performance of which the law in some way recognizes as a duty."

II. Difference between 1st and 2nd Restatements regarding §90:

a. 1st requires reliance by promisee be actual, reasonable, and of a definite and substantial character; 2nd only requires actual and reasonable b. 1st did not have limitation of remedy sentence (if elements met, promise enforced in its entirety); 2nd only enforces to the extent justice so requires c. 1st had no special provision (R §90(2)) that dealt with donations to charities or marriage settlements; 2nd states that those promises are binding even w/o reliance d. 1st restatement did not deal with 3rd parties

What's a K under UCC? When does it apply?

a. A Contract is: i. "the total legal obligation that results from the parties' agreement (§ 1-201 (b)(12)) ii. An agreement is the bargain of the parties... as found in their language or inferred from other circumstances. (§ 1-210 (b)(3)) 1. i.e. A K is a legal obligation (meaning the ct will enforce it if breached) consisting of all terms agreed to by the parties, plus terms that are implied by cts or by the Code itself. b. Applies only to "transaction in goods," so doesn't apply to contracts for the sale of land, to contracts for services, or to leases of goods.

mirror image rule

a. Acceptance has to be a "mirror image" of the offer if acceptance adds or changes a term, it is a counter b. Leads to unfairness when one party doesn't perform not technically a breach if there was no K (a slight change in term would mean no K) c. "Last shot" doctrine if terms of acceptance slightly differ from offer but offeree performs anyway, the implicit acceptance means a K was created based on terms last submitted

IV. Types of consideration in unilateral (promise in exchange for performance) Ks under Restatement's bargain theory:

a. An act other than a promise or; i. (E.g. Larry delivering couch after Sam promised to pay him for delivery) b. A forbearance or; i. (E.g. nephew refraining from smoking until 21, promise to refrain from doing something you have a right to do) c. The creation, modification, or destruction of a legal relationship i. (E.g. man paying bank $90k in exchange for cancelation of entire $100k mortgage (destruction) or man paying $5k for mortgage interest rate to be brought down (modification)

incapacity due to infancy

a. Any K entered into by a minor (under 18) is voidable by the minor b. Pettit v. Liston handling restitution when minor avoids K i. kid bought motorcycle and got into an accident, then avoided the K and wanted all $ back w/o taking damage into account

IX. Misrepresentation Analysis

a. Any time a party is induced to enter into a K by means of an untrue statement: i. Check to see if the misleading statement is one of "Fact" and not puffing, opinion, prediction of future events, etc., or whether it was one of the situations in which silence can be taken as an actionable misrepresentation of fact. b. If the misrepresentation is one of "Fact," determine if it was fraudulent or material c. If the misrepresentation is of a "fact" and was either fraudulent or material, determine whether the innocent party actually, foreseeably, and rsbly relied on the statement in entering into the K. d. If all these elements are met, the K is avoidable by the innocent party. e. Make sure also to check for fraud in the factum as well, in which case the K is void.

undue influence analysis

a. Any time you're presented with a "special relationship" bw two contracting parties, i.e. where one party is relying on the other for care or advice, undue influence is potentially implicated. If such a relationship exists, look for evidence of improper persuasion. If such improper persuasion exists, the K is voidable by the "weaker" party.

gap filler for the mode of delivery

a. As a general rule, a buyer is entitled to demand delivery of all goods called for in a single contract in one lot; similarly, the seller is entitled to deliver them in one lot b. where circumstances make it reasonable either to make or accept delivery in several lots and, in good faith, the other party would not be harmed by such action, delivery or acceptance in multiple lots is required. Eg limited storage to accept entire order at once.

SoF analysis

a. Ascertain whether the contract is subject to the Statute, i.e., is one of the 5 types of contracts covered in this Chapter; b. If it is a contract covered by the Statute, next check to see if the Statute is satisfied by a writing or "record", i.e., determine whether there is a writing containing the material terms of the transaction, signed by the "party to be charged," i.e., the party who fails to perform; and c. If it is a contract covered by the Statute, and if there is no sufficient writing signed by the appropriate party that satisfies the Statute, then check to see if one of the "exceptions" applies that make contracts enforceable even against a party who has not signed anything. i. These exceptions are: 1. For "transfer of an interest in land" contracts: the part performance or reliance (estoppel) exception; 2. For "agreements that by their very terms cannot be performed in a year" contracts: the full performance exception; 3. For "sales of good" contracts: the merchant's confirmatory memorandum exception; the specially manufactured goods exception; the admission exception; and the full/part performance or estoppel exception; and ii. If the Statute applies and is not satisfied, then it is voidable by the party with the contract defense, and his, her, or its non-performance is excused.

analyzing 2-207 problems

a. Check that the rules of Article 2 of the UCC govern. b. Do the parties have a K based on the exchange of their writings under § 2-207(1)? i. Ie does the purported acceptance from the offeree act as an effective acceptance of the offeror's offer, or is it a counter-offer as would be true under common law mirror image rule? c. If the offeree's form is an effective acceptance, then the terms of the K are dictated by the rules of § 2-207(2), and; d. If the offeree's form is not an effective acceptance, then the parties don't have a K based on their writings. In that case it's necessary to examine whether they have a K by conduct, and if they do, § 2-207(3) determines the terms of that K. e. Knockout rule applies and only terms put forward by BOTH parties stand. i. If at the end of knockout process, the K is left with no term re price, time of delivery, place of delivery, time of payment, or place of payment, warranty, etc., look to UCC's gap fillers of other default provisions of the UCC.

Misrepresentation Types

a. Innocent b. Negligent c. Fraudulent i. Conscious lies ii. Seller knows she doesn't know true facts iii. Reckless disregard for truth or falsity of the statement

III. Restitution upon disaffirmance of Ks entered into by minors

a. Credit sales: (SPLIT) i. Majority view (Restatement view): Minor is entitled to return of $, and recovery is not subject to offset for use or depreciation (minor doesn't need to pay restitution) R §14 cmt. c ii. Minority view: Minor is entitled to return of $ paid, subject to restitution (offset for use or depreciation, assuming fair dealing and no "overreaching" by other party) 1. If overreaching (i.e., fraud, unfairness, etc.) then no restitutionary offset b. Cash sales: i. Minor is still entitled to avoid the K, but upon disaffirmance, the non-minor is entitled to full restitutionary recovery c. Ks for necessities, even credit: i. Minor is liable for restitution for necessities (food, clothing, shelter) upon disaffirmance in many jdx d. K by misrepresentation of age: i. Minor liable for restitutionary recovery upon disaffirmance even in credit sale ii. Some states go further and hold a minor is bound under K if they affirmatively misrepresent their age

2-207 first step

a. Do parties have K based on writings under 2-207(1)? purpose = determine if purchase order and acknowledgement together constitute a binding offer and acceptance i. Determine whether acknowledgement is a "definite and seasonable expression of acceptance" 1. Definite expression of acceptance + offer has not lapsed (otherwise will be a counter and analyzed if K under 2-207(3)) ii. Is the seller's purported acceptance "expressly made conditional" on the buyer/offeror's "assent to any different or additional terms"? if so, it is a counter-offer (e.g. I'll take it, but only if you deliver to my house." In this case, you would look to see if acceptance under 207(3)'s conduct test. 1. 2-207(1) does not permit silence or inaction of buyer as acceptance (i.e., "Buyer's failure to object to additional terms of this acceptance will be deemed acceptance of such terms" still an acceptance - to be a counter-offer the seller must require an affirmative act by the buyer to indicate buyer's agreement to additional terms)

factors for determining if terms materially alter offer for 2-207

a. E.g., contradicting warranty clauses on buyer and seller forms does not become part of K b/c it materially alters the terms b. Test for materially alter: whether its incorporation without express awareness would result in surprise or hardship on other party c. clauses which add interest to overdue payments are not materially altering d. arbitration clauses almost always held to materially alter terms. e. "any objection to the quality of goods must be brought to sellers attention within 90 days after delivery" don't materially alter the transaction bc they're common enough they wouldn't unfairly surprise buyer (COMMENT 5) f. Other material terms (would result in surprise or hardship if incorporated without express awareness by the other party) i. Clause reserving to seller the power to cancel upon buyer's failure to make timely payment, clause requiring complaints be made in a time materially shorter than customary or rsbl. g. Other non-material terms (don't involve element of unrsbl surprise): i. Clause setting forth or enlarging slightly upon seller's exemption due to supervening causes beyond his control.

a k is void if

a. Entered into under duress by physical force b. One party is under fraudulent misrepresentation as to the very nature of the document itself (fraud in the factum) c. Calls for a performance that is illegal, or otherwise violates public policy

purpose of SoF

a. Evidentiary provide evidence parties truly K'd by providing written record b. Precautionary to avoid fraudulent assertion that a K was entered into when it actually wasn't c. Cautionary make unsophisticated parties aware they are entering into a K w/ legal ramifications

Factors as to Whether Parties Intend to be Bound Only After Written

a. Express Reservation in "Preliminary" Agreement b. Partial Performance c. All Essential Terms Agreed Upon d. Complexity and Magnitude of the Agreement

Types of transactions raising consideration issues: peppercorn theory

consideration of one party is worth substantially less than the other i. Generally $1 or a peppercorn can serve as consideration if promise was freely bargained for and freely given in exchange for the $1 or peppercorn ii. Inadequate consideration may be evidence of fraud, duress, or undue influence 1. E.g., if I sell my painting that's worth $10,000 for $100 iii. Inadequate consideration may be evidence of "sham" consideration 1. Consideration in order to circumvent the gift promise is unenforceable rule (e.g., I promise you a car on your 16th birthday when you're 14 and make you give me $1 consideration at 14 b/c I know that gift promises are unenforceable $1 wouldn't be adequate consideration and promise would be unenforceable)

indefiniteness analysis

a. First, check to see if just the offer itself is definite. If not, it can't be validly accepted. b. If presented w a completed K, check to see whether the contracting parties: i. 1. Have failed to agree to a term ii. 2. Have agreed to a term that's ambiguous; or iii. 3. Have "agreed to agree" to a term sometime after K formation. c. If you have any of these situations, next determine whether the term is essential for only the absence of a clear enough essential or material term will make a K unenforceable due to indefiniteness. d. If it is essential, next determine whether one of the modern doctrines designed to encourage enforceability of indefinite Ks can save the K: i. The "agree to agree" rules of modern contract law under the UCC ii. Gap Fillers or the general authority given in Restatement § 204 iii. Interpretation??? DID WE EVEN COVER THIS?? iv. Past Performance, Usage of Trade, or Course of Dealing v. Reference by the parties to a commercial or fair market standard in their agreement

Duress analysis

a. First, determine whether a K was entered into by threat of imminent physical harm, or by improper threat. If the former, the resulting agreement is void b. If one party enters into a K or K modification by means of improper threat, the question is whether the resulting deal is fair or not. c. If the terms are fair, determine whether any of the provisions of R §176(1) apply; if the resulting terms are unfair, determine whether any of the provisions of R § 176(2) apply. d. Finally, recall that economic duress not caused by the party not getting a favorable deal is not grounds for avoiding the K.

effect of misrepresentation

a. Fraud in the factum (misrepresentation of very nature of agreement) void i. E.g. insurance agent tells customer that the form customer is signing is only a release of medical records to the insurance co which needs to be executed just in case the customer eventually decides to go ahead and purchase life insurance. If fact, the document is the life insurance K itself, obligating customer to pay $800 per year in premiums. b. Fraud in the inducement (misrepresentation to enter the K) voidable i. Typically misrepresentations merely go to the inducement to enter into a k ii. E.g. a party falsely tells another that a freezer will chill foods down to -20 degrees when in

Transactions w/o consideration due to lack of bargained for exchange "because of" rather than "sought by and given in exchange for" the promise

a. Gifts or gift promises i. Under traditional common law, promise made as a gift is not consideration modified by Restatement so in a few situations, "gift promises" can act as considerations b. "past" consideration or moral obligation c. unsolicited actions i. actions must be sought by and taken because of an existing promise, not without regard to the promise comes up mostly in situations where a party accomplishes the acts but is unaware of the offer. (e.g. sam returns a wallet and later finds out an ad had been placed offering a reward for return of the wallet. In that case, no consideration bc sam's actions weren't sought by and taken bc of the existing promise)

gap filler for the price of the goods the buyer must pay and the price the seller must accept

a. If nothing is said as to price, or if the price is left to be agreed upon by the parties and they later fail to agree, the price for the goods will be "a reasonable price at time of delivery" i. Generally the market price for the goods

illegality analysis

a. Illegality issues are usually easy to spot on examinations because the facts must tell you that the contract may contravene a statute of the appropriate jurisdiction, or that fact is obvious, e.g., it is a "contract" for murder. The only other contract subject to the rule that might not, on its face, appear to violate a statute is a contract to release intentional tort or criminal liability. b. If you have an "illegal" contract, determine: i. Whether it is "void" or voidable at the option of the aggrieved party (§§ 17-3 et seq); or ii. Whether one of the "exceptions" applies that will allow restitutionary recovery for the aggrieved party.

IV. Generally parties are left as the court finds them when illegal Ks are performed, Except:

a. In Pari Delicto doctrine party to illegal K entitled to restitutionary recovery for value if: i. He was not guilty of serious moral turpitude & ii. Other party was more blameworthy in the transaction b. Locus Poenitentiae doctrine if party to illegal K seels to repudiate K before illegal purpose obtained, she is entitled to restitution if it doesn't involve serious moral turpitude

gap filler for the time and place for payment

a. In the absence of an agreement as to payment terms, payment is due at the time and place at which the buyer is to receive the goods

ILLEGALITY/ Ks AGAINST PUBLIC POLICY - common types

a. Ks for performance of criminal acts b. Gambling Ks (in states where it's illegal) c. Ks obtained by bribery d. Ks in which a party releases another from tort liability i. Release of liability for negl torts is ok if its entered into knowingly and in good faith. Release from gross negligence probably not okay. e. Ks for services provided by parties who should be but aren't licensed f. Ks where seller knows of buyer's illegal purpose

III. Elements to establish fraud in the inducement:

a. Misrepresentation of the existing fact was made by the other party b. Misrepresentation was either fraudulent or material c.. Misrepresentation was actually relied upon by the innocent party

mailbox rule

a. Offers effective upon receipt b. Acceptances effective on dispatch i. A properly dispatched acceptance will be effective even if it never gets to the offeror ii. Refers to the time when the offeree is unable to recall it (when it's been placed in usps box or email sent) iii. 2 criteria: 1. communication properly address and stamped (if letter) a. if not properly addressed, effective upon receipt, but if arrived within time properly addressed letter would have arrived then it's effective upon dispatch 2. communication used must be a permissible mode of acceptance a. if quicker form of acceptance used, then mailed acceptance only effective upon receipt (dispatch rule doesn't apply) b. if unauthorized form arrives in time that a proper form would have, then effective on dispatch c. if offer specifies acceptance can only be effective upon receipt by offeror, then general acceptance upon dispatch rule not followed. d. If offer is silent as to how and when it's to be accepted, any purported method of acceptance must be rsbl under the circumstances. i. Eg such as where the offeree know that the offeror has competing bids, indicate a quicker form of acceptance should be used, then a mailed acceptance will only be effective upon receipt. iv. Offeror loses power to revoke after properly dispatched acceptance v. Option K acceptance not effective until received by offeror R §63(b) 1. Not regarding acceptance of offer to enter into option K - regarding acceptance of the underlying offer. Assumes option K has already previously been entered into. c. Rejections effective upon receipt i. Rejection not effective until received, but need not be read to be "received" d. Revocations effective upon receipt i. Majority rule: revocation of revocable offer effective upon receipt ii. Minority rule: offeror's revocation effective upon dispatch (offeree can lose power to accept before she doesn't know it) e. First sending a rejection, then acceptance i. Acceptance is effective if it arrives first; rejection effective if arrives first f. First sending an acceptance, then rejection i. Acceptance effective on dispatch unless 1) rejection arrives first; or 2) offeror changes his position in reliance on the rejection (like selling goods to someone else)

5 situations in which a party's silence can act as misrepresentation

a. Party has taken affirmative action to conceal a fact w/ intent to make it unlikely that the other party will discover it b. Party learns of subsequent info before K is executed that makes disclosure necessary to prevent a previous assertion from being a misrepresentation c. Party knows that disclosure of fact is necessary to correct a mistake of the other as to a basic assumption non-disclosure would be breach of good faith and fair dealing d. Party knows that disclosure of a fact is necessary to correct a mistake of the other as to the effect of a writing e. Party entitled to know of a fact due to relation of trust and confidence

VIII. 5: K for sale of goods for $500 or more under UCC 2-201 (SOF)

a. Party need not satisfy or meet requirements of 2-201(1), (2), and (3) to satisfy SoF only needs to satisfy one section to lose SoF defense, i.e. it's enforceable. b. Merger doctrine used to help satisfy SoF here

XII. Enforcement of oral promises in Ks w/in SoF (other than land interests) by reliance and estoppel:

a. R and majority of states reliance exception exists for all Ks i. Upon reasonable and foreseeable reliance on an oral promise, promise is enforceable by relying party to the extent justice requires b. Minority is that the reliance exception only applies to land transactions

Ks that can't be completed wihtin year

a. SoF only applies when Ks own terms make performance w/in a year impossible i. Even if perf. is theoretically possible w/in a year, even factually unlikely, outside SoF b. Split of opinion as to whether Ks that are for fixed terms greater than a year but also give parties option to terminate within a year are part of SoF i. Majority holds that SoF applies writing is required; termination not viewed as completed perf. ii. Minority holds that SoF doesn't apply enforceable even if oral; termination viewed as alternative perf. (CA uses this) c. Full performance exception: complete performance by one party takes K outside the SoF i. Majority holds where one party has completely performed his obligations but other party can't complete perf w/in a year, K is outside SoF 1. E.g., K where party promises to deliver wood and other party promises to pay over 18 mos wood is delivered, now outside SoF ii. Part perf doesn't take K outside SoF d. Satisfying the SoF requires: i. Existence of a writing identifying subject matter and essential terms ii. Writing is signed by party against whom K is being enforced iii. Writing sufficiently evidences parties have intended to make a binding K e. Merger doctrine also applies

Offer Distinguished from Other Types of Communication

a. Statement of future intention b. Request for Price quote/ estimates c. Preliminary negotiation or invitation to make an offer: d. Statements made in jest, in anger, as an opinion, in a grumbling manner, or while intoxicated e. Ads/Catalogues f. Special considerations for some kind of catalogues

2-207 summary

a. The existence of a K will be found either under § 2-207(1) by the exchange of writing, or bc there is a K by conduct under § 2-207(3). These are the ONLY two ways Ks can be formed under § 2-207. b. However, the terms of any K formed under § 2-207 are determined either by § 2-207(2) (if there's a K based upon the exchange of writings under § 2-207(1)) or by § 2-207(3) (if there's a K only by conduct.)

who's entitled to accept the offer?

a. The offeree has power of acceptance. Generally, an offer may only be accepted by the person in whom it's rsbly apparent that the offeror intended to create the power of acceptance when offer was made. Offeror is the master of the offer.

I. Current requirements for a shrinkwrap license. A shrinkwrap license or sale (inducing phone orders) will generally be enforceable if:

a. There is a pre-sale notification that there will be additional terms in the actual license, which are in the box, or on the website i. Label on box that license is enclosed ii. Told on phone that additional terms/license will arrive iii. Even better to actual post at point of sale and on website b. Terms are conspicuous, understandable, and not unconscionable c. Reasonable return policy (30 days ok, 5 days probably not) whereby consumer can return good for full refund if terms are not acceptable i. Issues re: software b/c of digital nature and copying. 1. In e-commerce, either the purchaser or user must be aware of the provision, or have reasonable notice of it to bind that party. 2. Such notice can be by clicking "I Accept TOS" if TOS on hyperlink is reasonably available, or scrolling through terms before hitting "I accept."

undue influence elementes

a. There is a special relationship btw the victim and the other party & i. Special relationship = when victim is under domination of the other, OR when victim is justified in assuming the other party will not jeopardize the victim's welfare when victim is particularly susceptible to influence by the other ii. E.g., parent/child, lawyer/client, clergyman/parishioner, nurse/elderly, physician/patient, accountant/client b. There has been improper persuasion of the victim by the "stronger" party R §177 i. Test: whether the stronger party seriously impaired the free exercise of judgment by the victim ii. Common features (provide evidence) 1. Unfair exchange (economic disproportionality) 2. Unavailability of independent advice to victim before assenting 3. Lack of time for reflection before assenting 4. High degree of susceptibility to persuasion exhibited by victim 5. Discussion or consummation of transaction in unusual place or time 6. Insistent demand that transaction close quickly and emphasis on consequences of delay 7. Use of multiple persuaders 8. Confidential relationship

III. Major types of cases covered by the statute of Frauds

a. Transfer of interest in land b. Ks that can't be performed, by their terms, within a year c. In consideration of marriage d. Where 1 party agrees to act as a surety for another e. For the sale of goods $500 or more

UC Analysis

a. When confronted with a contract that is extremely favorable for one party, first check for evidence of incapacity (Chapter Eleven); duress (Chapter Thirteen); undue influence (Chapter Fourteen); or misrepresentation (Chapter Fifteen). If there are no facts to support any of those theories, then check to see if: i. There is an absence of meaningful choice on the part of the aggrieved party; and ii. The terms of the contract are sufficiently unfair to the aggrieved party. b. Recall the doctrine is flexible and that the court seeks to do equity. If unconscionability is found, the court may strike the entire contract; enforce the contract without the unconscionable term or terms; or even re-write the contract so that it operates fairly.

gap filler for the place of delivery

a. generally, if the place of delivery is not agreed upon by the parties, delivery is to occur at the seller's place of business or residence. However, for specific goods located somewhere else (e.g., a racehorse in a particular paddock), delivery is to take place at the location of the specified goods if the parties know of the place at the time of contracting. i.e. in the absence of a contrary agreement, the cost of delivery is always on the buyer and not assumed to be included in the sales price.

III. Types of promises made enforceable under promissory estoppel:

a. gift promises (by far the most common) b. oral promises to convey land i. also overcomes SoF defense in addition to no consideration defense c. charitable subscriptions i. pledge to charity enforceable even w/o proof of reliance d. offers that induce foreseeable reliance of a substantial nature become irrevocable §87(2) i. offeror should reasonable and foreseeably expect offeree to undertake substantial action in reliance on offer & ii. offer does induce that reliance 1. most common application is with an offer by sub-contractor a. promissory estoppel makes subcontractor's offer irrevocable until general contractor has a reasonable chance to accept (reasonable time = a day or 2 after general contractor has been awarded the project) e. actions taken in reliance on promises made in preliminary negotiations if reliance was foreseeable and reasonable i. makes parties owe a duty of good faith in negotiations also

Limitation on avoidability under "cognition" or "acts" test:

a. if other party does not reasonably know of incapacity and the terms are fair, the party w/mental incapacity cannot avoid the K power of avoidance terminates to the extent the K has been partially performed or circumstances changed so avoidance would be unjust R §15(2)

IV. Remedies when a promise is enforced under promissory estoppel:

a. limited as justice allows entitled to his reliance damages, not necessarily the full extent of the promise b. e.g., wealthy woman offers homeless man $300 to buy a coat man buys a coat for $200 but then wants the remaining $100 most likely he will only be entitled to $200

effectOfUc

a. once a ct determines UC is present, it's empowered to: i. refuse enforcement of entire K ii. enforce remainder of K w/o unconscionable clause iii. modify or limit application of any clause to avoid unjust result

ratificaiton of ks under cognition or acts test

a. w/in reasonable time after incapacity is terminated, individual must either avoid or ratify K

Restatement's take on ucc's 2-207

a. §61 allows acceptance to be valid if it has additional/different terms, unless acceptance made to depend on assent to changed or added terms (e.g. "subject to...") b. §59 a reply to an offer which purports to accept it but is really conditioned on offeror's assent to additional/different terms is a counter-offer (e.g. expressly conditioned on...) c. courts examine language and all other circumstances surrounding the negotiation to determine whether the purported acceptance was conditioned upon assent to other terms (e.g. "expressly made conditional..." d. BUT R doesn't address whether if "acceptance" is actually a counter-offer, does last shot doctrine or does a knockout rule similar to 2-207(3) apply?

modern k law definition of consideration

accepts both theories some courts combine tests: a. Consideration present when there has been a benefit and or detriment that was bargained for

Types of transactions raising consideration issues: termination at will clauses

arguably illusory b/c one party can change their mind and terminate i. Traditional rule: illusory and unenforceable ii. Modern rule: probably enforceable most cts hold that even under a termination at will clause, the party terminating must give rsbl notice to the other before terminating K, this notice requirement is a sufficient detriment to render promise enforceable iii. UCC §2-309(3) in order to validly terminate a K, an event must happen or there must be reasonable notice notice is an explicit requirement, so each party is bound to perform for at least the reasonable notice period 1. If the parties specifically agree that no notification is necessary, such a termination at will clause will likely be unenforceable.

2-207 second step

b. If parties have K based on writings 2-207(1), then 2-207(2) governs terms: i. If either party is a non-merchant, the offeror's terms control ii. If even one party not a merchant, any additional terms contained in acceptance are merely proposals for addition to K which may or may not be accepted by offeror (see Klocek) if offeror wants to accept, must signify intent in objectively verifiable way iii. If both parties are merchants, offeree's terms control unless 2-207(2) exceptions apply rare that none of these will apply, so usually the offeror's terms control 1. Offer expressly limits acceptance to terms of offer 2. Additional terms in acceptance materially alter the offer 3. Notification of objection to the additional terms by offeror given w/in reasonable time after notice of them has been received

fraud in the inducement - 2nd element

b. Misrepresentation was either fraudulent or material i. Fraudulent if: 1. Deceiving party intended to induce innocent to enter into K & 2. Deceiving party acted with "scienter" a. Knowing that what he represented wasn't true b. Knowing he was being reckless in making representation bc he didn't have sufficient confidence in the truth of what was asserted; or c. Knowing he didn't have basis to make representation ii. Material if likely to make a difference to a rsbl person in deciding whether to go through with K

a k is voidable if

b. One party is w/o capacity to contract c. Entered into under mistake d. One party is under duress by improper threat e. One party unduly influenced the other f. It was entered into by means of fraud as to the inducement g. One or more terms is unconscionable

objective theory of ks test for who has power to accept?

b. The Objective Theory of Ks determines whether an individual is an authorized offeree and thereby eligible to accept an offer. If a hypothetical rsbl person in the purported offeree's shoes would believe the offer was being made to him, that person has the power to accept it. Subjective intention of the offeror as to whom the offer was intended isn't controlling. i. Power of acceptance not transferable. Exception: option K

third step for 2-207 analysis

c. If no K by 2-207(1) (e.g. if it's considered a counter-offer), an implied in-fact K may be formed by conduct under 2-207(3) knockout rule will govern terms. Even if offeree is deemed to have sent a counter offer, the parties can establish an implied in fact K by their conduct. If seller sends the goods called for in the offer, and buyer accepts them, they have made a K by conduct. NOTE: Resort to this section 2-207(3) can only be made when NO K is formed based on parties' exchanged writings under 2-207(1). 1. Knockout rule: all terms found in both parties' writings become part of K, but any term not found in both is "knocked out" and does not become part of K a. If at the end the K is left with no term regarding price, time of delivery, place of delivery, time of payment, place of payment, warranty, etc. terms supplied by UCC gap fillers or other default provisions

fraud in the inducement- 3rd element

c. Misrepresentation was actually relied upon by the innocent party i. Usually established by showing change in position which was motivated by misrepresentation, even if only in part ii. Such reliance was reasonable 1. Relying on misrepresentation is reasonable even if innocent party is at fault in not knowing or failure to discover that fault can't acts as a failure to act in good faith though

Types of transactions raising consideration issues: i. Purported, but unperformed,

consideration is not effective consideration: insufficient to make a promise enforceable i. Purported consideration is consideration that's intended to have taken place in exchange for a primes, but which in fact never occurred. ii. Exception: sufficient for option Ks so long as offer is in writing, signed, and proposed a fair exchange (if written option K recites that for $20 received, seller gives buyer an option to purchase her car for $5k within 30 days, seller is obligated to sell the car to buyer if he tenders the $5k within 30 days even if buyer never paid original $20.

2-207 basics

eliminates requirement that parties are not in an enforceable K by the exchange of forms just b/c terms differ from original offer (2-207 also determines the terms of the resulting K) a. existence of K will be found by exchange of writings 2-207(1) or by conduct 2-207(3) b. terms of K determined by 2-207(2) if based on exchange of writings and by 2-207(3) if by conduct c. 2-207 wouldn't apply when seeking an act for acceptance to accept you have to perform the act, you cannot propose other terms (e.g., can't accept by building a stone wall when the offer said to build a brick wall) (ONLY APPLIES TO BILATERAL Ks

Offer distinguished from Ads/Catalogues

general rule is that an ad or a description in a catalogue isn't an offer, but rather a solicitation to make an offer. It's the reader of the ad who makes the offer when he tries to buy item (Advertisements of goods by display, sign, handbill, newspaper, radio or television are not ordinarily intended or understood as offers to sell) i. But an ad or catalogue description will be a binding offer if it: 1. Specifies a particular quantity of goods to be offered at the invited price; and 2. Indicates to the offeree what specific steps need to be followed in order to accept that offer w/o further communication from seller (such as the goods are being sold on a first come first served basis).

c. Elements to avoid SoF defense through promissory estoppel:

i. Actual reliance on a promise ii. A definite and substantial change of position occasioned by the promise

Special considerations for some kind of catalogues when analyzing offer

i. E.g. law school catalogue which are much more detailed: even though non-negotiable terms of offer are dictated by school, the applicant is the one making the offer on the terms set forth in catalogue, which itself was merely a request for solicitation for offers. 1. E.g. Med School says it evaluates admission based on "scholarship, character, and motivation w/o regard to race, creed, or sex." 2. Rejected applicant sues, saying students chosen on basis their families can make large contributions, and not on "scholarship, character, and motivation. . ." a. Catalog not an offer to consider applications for a fee. So applicant is offeror. b. However, terms of applicant's offer were defined by catalogue, i.e. in essence it is an offer to apply for admission and attend school based on the terms of the catalogue. So judgment for applicant.

what if different/additional terms found in a confirmation rather than acceptance? how does ucc govern?

i. E.g., if parties made a K over the phone (oral K) and one party sends a written confirmation of oral K afterward, but confirmation contains different/additional terms, 2-207 analysis happens ii. Difference btw normal 2-207 analysis is no need to ask whether K based on writings under 2-207(1) "confirmation" confirms that a K exists already proceed directly to 2-207(2) iii. 2-207(2) analysis compares terms of confirmation against terms in oral K iv. If terms are "different, rather than just "additional", do analysis under the three approaches to different terms.

promissory estoppel elements

promise is binding if: a. Promisor should reasonably expect to induce action or forbearance of promisee b. Promise does induce foreseeable action or forbearance by promisee (actual and rsbl) c. Injustice can only be avoided by enforcement of the promise i. If these elements are met, promise can be enforced to the extent that "justice requires" ii. Promissory estoppel can enforce a promise that's gratuitous or not otherwise supported by consideration (not a substitute for consideration though)

Analyzing intent when either: (a) the parties themselves never discuss whether their agreement is to carry with it legal consequence; or (2) one party believes his or her agreement does not have legal consequence, and the other party does:

i. Figure out person seeking to enforce K. ii. Would a rsbl person in their position believe that both parties have objectively agreed to be bound to the same bargain - that they have agreed to be bound by a legal obligation? iii. Evaluate presumptions: There is a presumption that neither party to an agreement intends for a promise to be a legally enforceable duty when they live together as a family in a domestic situation, when they are related to each other in some fashion closer than second cousins, or in certain social situations such as when they agree to take a walk together or dating. 1. However, that presumption is rebuttable by facts to the contrary, indicating that related, domiciliary, or socially acquainted parties intended their promises to be enforceable, or indicating that the receipt of benefit by the other carried with it an implied promise of payment.

Types of transactions raising consideration issues:Modification of existing agreements - Pre-existing duty rule

i. General common law rule: "new" consideration required for enforceable modification 1. Pre-existing duty rule R §73 when one party already has K duty to do something, a subsequent promise to do that same thing won't be enforced unless it's supported by consideration, as if it's a new K. a. Assumes that the benefitted party is either: i. An extortionist ii. A profiteer iii. Dishonest compromiser b. Getting around the pre-existing duty rule modifications allowed if new consideration given. Must differ from what was required by the duty in a way which reflects more than the pretense of a bargain - simply a reaffirmation of the peppercorn and sham theories of consideration. ii. Exceptions to pre-existing duty rule - modifications enforceable w/o consideration if: 1. under UCC §2-209(1) (so enforceable anytime it involves a transaction of goods?) 2. fair in amount and the result of unanticipated changed circumstances R §89(a) 3. a statute allows it 4. justice requires the modification be enforced in light of one party's material change of position in reliance on modified terms iii. Pre-existing duty rule regarding public officials wealthy man cannot pay to get to the front of the line on a government approval b/c the official already had a preexisting duty to review h. Settlement of claims based on incorrect info R §74 provides that promises to not bring or

fraud in the inducement - 1st element

i. Misrepresentation = an assertion that is not in accord with the facts; must be regarding a fact rather than an opinion or prediction ii. Exceptions when a statement of opinion can serve as basis of misrep. claim: 1. When party misrepresents the fact of what her opinion was 2. When party stands in a relation of trust and confidence to the innocent party 3. When innocent party reasonably believes the other party has special skills, judgment, or objectively with regard to the subject matter 4. If the innocent party is particularly susceptible to a misrepresentation of the type involved iii. A prediction of future events beyond the control of the speaker can't serve as basis for a misrepresentation claim. iv. Whether an ordinary breach rises to the level of misrepresentation depends on the intention of the promisor at the time the promise was made. 1. If promisor knew that he had no intention of carrying out the promise at the time it was made, or was misrepresenting a fact at the time of contracting, then it's a misrepresentation issue and innocent party can avoid k. 2. If promisor intended to carry out the promise at the time it was made but later failed to perform for some reason, the resulting suit is for break of K only v. Puffing doesn't rise to the level of misrepresentation 1. E.g. "X brand of peanut butter is the best" or "this is a superior product."

cross-offers

i. Occasionally parties will exchange identical offers to each other in the mail. i.e. buyer will send an offer to the seller stating she's willing to buy particular goods on certain terms, and seller will also send an offer to buyer indicating a willingness to sell those same goods on those same terms. The exchange of cross-offers does not form a contract, for while both parties have manifested a willingness to be bound on her own suggested terms, neither has manifested a willingness to accept the other party's offer

acceptance issues in reward offers

i. Presumptively accepted only by 1st person to do required act 1. Except: when conditions make it unlikely that an unlimited group can accept, everybody has power to accept (e.g., only small # likely to meet all conditions) ii. Offeree must know of it to accept it (exception: if act is within officers duty then can't claim reward) iii. Revocation equal publicity rule 1. Offer can be retracted if given equal publicity, but can be prevented from being revoked if unilateral and performance has started iv. Notice of intent to accept not required (unless specifically stated)

I. Duress by physical compulsion - void or voidable?

void a. issue of how imminent the threat has to be must be some imminence to make K void, otherwise analyzed as improper threat (must cause rsbl person in the circumstances, to fear loss of life, or serious physical injury, or actual imprisonment for refusal to sign the documents) i. i.e. duress sufficient to render a K void consists of the actual application of physical force that's sufficient to , and does, cause the person unwillingly to execute the document; as well as the threat of application of immediate physical force sufficient to place a person in the position of signer in actual , rsbl, and imminent fear of death, serious personal injury, or actual imprisonment.

IV. Incapacity due to mental infirmity a. Need to correctly characterize the infirm individual's status:

i. Someone who has an appointed guardian 1. Individual has no capacity to contract K voidable 2. Guardian able to avoid or affirm a K w/in reasonable time 3. Restitution required if: a. K for necessities b. Other party didn't/shouldn't have known about incapacity at time of K ii. Someone incapacitated under "cognition" test 1. "unable to understand in reasonable manner the nature and consequences of the transaction" court asks whether individual understood they were binding themselves to a transaction w/ a legal consequence iii. Someone incapacitated under "acts" / "volition" test 1. Unable to act in a reasonable manner in relation to the transaction and other party has reason to know of his condition (not that under this test, but not the cognition test, voidability only occurs when the other party has reason to know of the condition) iv. Someone temporarily incapacitated due to intoxication 1. R §16 only voidable if other party has reason to know that 1) individual unable to understand nature of K due to intoxication ("cognition" test) OR 2) individual unable to act in reasonable manner due to intoxication ("acts" test) 2. Majority Rule: K is voidable for reasonable time if individual was incapacitated under cognition test due to intoxication regardless of whether that intoxication is voluntary or other party knows of intoxication

past" consideration or moral obligation- Consideration, what's the traditional and modern rules?

i. traditional rule: have the same effect as gift promises insufficient to make promise enforceable if the promise was made in response to an act or forbearance previously undertaken, then promise couldn't have been made as part of a bargained for exchange ii. modern rule: "past" consideration and moral obligation can made some promises enforceable Restatement sets forth 2 situations: 1. where promise is made in recognition of a benefit previously conferred on promisor (must be received by promisor) R §86 enforceable unless: a. promisee intended the benefit to be a gift i. where a promise is made by a person in need of emergency services, there's a presumption that services rendered weren't intended as a gift. b. value of promisor's promise is disproportionate to the benefit he receives 2. where promise is made to pay a debt rendered unenforceable due to SoL or bankruptcy issues R §82, 83 enforceable if: a. debtor acknowledges he owes a debt which is only made unenforceable due to SoL OR promises not to assert SoL in collection suit i. most states adopt this §82 rule, but promises need to be in writing to be effective ii. only the new promise to pay is enforceable, not the original debt b. debtor expressly promises to pay all or part of a contractual debt that is discharged in bankruptcy

What is The "Predominant Purpose" Test

i. whether Article 2 applies to a sales/service hybrid transaction depends on which part of the transaction predominates. That is, the court must determine whether the principal purpose of the buyer in deciding to enter the transaction was really to acquire goods or to obtain services. If it is the former, then all parts of the transaction are governed by Article 2; if it is the latter, no part of the transaction is subject to Article 2.

Transfer of interest in land (sof)

licenses exception; some jdx except short term leases also) a. Option K regarding land sale must also be in writing (offer for an option K doesn't though) b. Executory promise to pay in exchange for land may be enforced even if oral outside the statute b/c only obligation is the buyer's promise to pay i. But a K where purchaser pays in return for seller's promise to transfer interest needs to be in writing b/c the only obligation is transferring interest in land c. Satisfying statute requires: i. Existence of a writing reasonably identifying all material terms ii. Writing is signed by party against whom K is being enforced iii. Writing sufficiently evidences the parties' intent to transfer that interest d. Merger doctrine intent can be found by taking multiple writings together i. Some courts require these to specifically refer to each other, but most just require that it's clear they relate to the same transaction e. Part performance exception reasonable reliance by the purchaser also makes a promise to transfer interest in land enforceable if oral i. Purchaser needs to establish: 1. Reliance on oral promise of seller to sell property and on seller's continuing assent 2. Reliance was foreseeable and reasonable & 3. Injustice can only be avoided by enforcing promised transfer

course of performance to cure indefiniteness

looks at how the parties have operated under the current contract to interpret a potentially ambiguous term

XI. 2-201(2)

merchant's confirmatory memorandum can satisfy SoF against one who receives it if: a. Transaction btw merchants b. Writing is sent w/in reasonable time after K was made and is sufficient against sender (to bind sender under 2-201(3)) c. Actually received by other party and that party has reason to know of its contents (Visa Rule) d. Writing satisfies requirements of 2-201(1) against the recipient (so look at writing requirements above) e. Not objected to in writing w/in 10 days after receipt i. If recipient does object within 10 days and disclaims knowledge of the K (e.g. our co has never dealt with you and we don't know what you're talking about), objecting party preserves its SoF defense. But if receiving party says something like, "you have misstated our deal. Our K was for one transducer at $9,500, not $10,000, it loses its SoF defense for in its objection it has sent a signed writing/record evidencing a sales transaction with a given quantity term so it's satisfied the statute against itself under §2-201. f. If above elements are met, a party who hasn't signed anything will still lose its defense under SoF, and K will be enforceable. Since the other party sent a confirmatory signed memo, they will have also lost the SoF defense.

fraud in the factum

misrepresentation of very nature of agreement) void i. E.g. insurance agent tells customer that the form customer is signing is only a release of medical records to the insurance co which needs to be executed just in case the customer eventually decides to go ahead and purchase life insurance. If fact, the document is the life insurance K itself, obligating customer to pay $800 per year in premiums.

fraud in the inducement

misrepresentation to enter the K) voidable i. Typically misrepresentations merely go to the inducement to enter into a k ii. E.g. a party falsely tells another that a freezer will chill foods down to -20 degrees when in fact it'll only chill them to 0 degrees.

implied in law - quasi ks

no offer, acceptance, or consideration but court holds there is a K in order to avoid injustice - K is implied as a matter of law (e.g., doctor helps unconscious pedestrian)

does indefiniteness apply to everything?

no, only the absence of a clear enough essential or material term will make a k unenforceable due to indefiniteness

IX. 2-201(1) (sof, $500 or more)

not enforceable unless party can establish: a. There is a writing b. Signed by party against whom enforcement of K is sought i. UCC signed if it includes any symbol adopted by party w/intent to accept writing (letterhead, e-mail, etc) c. Writing evidences a K for sale (as opposed to merely an offer, preliminary negotiation, etc) d. Writing contains subject matter and quantity term i. K cannot be enforced beyond the quantity shown in the writing SoF is satisfied even if quantity term is wrong, but still can't go beyond that ii. But if writing had incorrect term other than quantity, no prohibition that party can't argue higher price was what was agreed to iii. Under R §131, memo must also state essential terms and identity subject matter

Types of transactions raising consideration issues: illusory promises

promisor gives illusion of making a valid promise but doesn't bind himself to anything - not enforceable if illusory. I.e. it is a promise whereby the promisor hasn't put any limitation on his free will and leaves his future actions subject to his free will and whim. i. Traditional rule: Ks w/ personal satisfaction clauses not enforceable illusory b/c the promisor failed to make a definite commitment to be bound 1. E.g., Joe promised to accept and pay $500 for a portrait "if I like it when completed" (illusory) ii. Modern rule: implied duty of good faith and fair dealing renders K w/ personal satisfaction clauses enforceable 1. K law holds that any restriction on promisor's freedom of action will prevent illusory so, implied duty of good faith performance in every K allows courts to hold promisor has implicitly restricted his actions 2. "if I like it" is not illusory, whereas "if I feel like it" is illusory 3. UCC exception: under UCC §2-326(1)(a), parties can structure an enforceable agreement in which buyer can return good for no reason without imposition of good faith requirement "sale on approval" or "sale or return" contracts

XI. 2-201(3)

provides 3 exceptions to writing requirement: a. Specially manufactured goods oral K enforceable if seller has begun mfg or made commitments in reliance on order i. Means a good that cannot be sold to anyone other than the original buyer in ordinary course of business - custom product b. Admission if party admits that a K was made under oath, then oral K becomes enforceable c. Performance if party completely performs, remaining promises under the K are enforceable i. Part performance: only the part that has been performed can be enforced i.e. only w/respect to goods for which payment has been made/received and accepted

course of dealing to cure indefiniteness

refers to what the parties did in past, similar transactions. So if, under a contract, delivery is due "10 days after ordering," and under a prior similar contract between the parties with a similar term they had operated such that it was 10 business days and not 10 calendar days, likely that is how the 10 day delivery term would be interpreted under the current contract.

Types of transactions raising consideration issues: requirements and output Ks

requirements = buyer agrees to purchase all goods from one seller; output = seller agrees to sell all goods to one buyer i. Arguably illusory b/c one party not bound, but enforceable through good faith requirement 1. Usually have no implied floor but do have implied ceiling a. E.g., it is ok if a buyer really does not need any of the product if he is acting in good faith b. A minority of courts hold that not ordering any will be breach unless they have ordered none in past or allowing 0 is expressly in K 2. there is an implied ceiling on the amount that can be ordered cannot be disproportionately large even if good faith, b/c it would be unfair to hold supplier in breach if they couldn't meet that 3. if parties estimate amount, they will be held to an amount not disproportionate to estimate. a. BUT again, if in good faith its requirements or output goes to zero, most cts would allow it do so without penalty.

ILLEGALITY/ Ks AGAINST PUBLIC POLICY- effect

subject to exceptions, these are void

II. Restatement's Bargain Theory R §71

to constitute consideration, performance or return promise must be "bargained for" a. Sought by promisor in exchange for his or her promise & b. Given by the promisee in exchange for that promise i. Applies with a 3rd party also as long as the promisee's performance or promised performance was bargained for and given in exchange for the promisor's promise, consideration valid even if goes to/comes from a 3rd party

active concealment

treat like a lie, action intended to prevent someone from learning a fact a. Ask if it's fraudulent or material b. There is a duty to correct a statement true when made but found to be untrue before acceptance c. Duty to correct the mistake of another as to a basic assumption d. Duty to correct another as to the effect of a writing

ratification of k entered into by a minor

upon reaching 18, minor can ratify the K and make it binding a. No new consideration needed b. Can occur in 3 ways R §85: (this is the same for all) i. Express ratification indicated by words, written or oral ii. Implied-in-fact ratification manifests willing to be bound by action (e.g. if once he turns 18, person continues making payments for a car sales K he entered into as minor) iii. Ratification by silence if K not disaffirmed w/in reasonable time after reaching 18, ratification implied 1. Generally, the more benefits minor has received, the less amount of time to disaffirm the more benefits that are still executory, the greater the amount of time

SoF effect

when it applies and is not satisfied, gives a party a defense to a breach of K lawsuit a. If a K is "within" the SOF, then the SOF must be "satisfied" for the K to be enforceable. b. If SoF applies and is met, evidentiary gate is lifted and evidence about K is admissible c. If SoF applies and is not met, evidentiary gate is closed and party seeking to allege a breach won't get to admit any evidence of K

Offer distinguished from Request for Price quote/estimate

when someone asks for, or gives, a price quotation, no offer is usually found, for there's no manifestation of intention to be bound. (this is a presumption which can be overcome) i. E.g. Sam calls Home Depot and says "could you please give me a price quote for three boxes of nails?" 1. Not an offer to purchase the nails bc be isn't manifesting an intention to be bound no matter what the price turns out to be. ii. Similarly, if a seller provides the price for widgets at his store as $45/dozen, that's also not an offer but rather a solicitation for an offer from a perspective buyer. iii. Also, ESTIMATES are generally not offers. Without more, they are just price quotes. No promise to do the work for that price. After work is completed, buyer will owe seller fair market value of time and materials even if in excess of estimation.

Types of transactions raising consideration issues: expressly conditional promises

will be enforceable if condition is at all outside the control of promisor (if in unfettered discretion of promisor, then illusory and not enforceable)

are gap fillers effective when parties make agreements to agree

yes

Certainty of Terms (R§33)

• (1) manifestation of willingness cannot be accepted to form a K unless terms are reasonably certain • (2) terms are reasonably certain if provide a basis for determining a breach and for giving a remedy • (3) the fact that terms are left open/uncertain may show manifestation of intent not intended to be understood as an offer/acceptance

Course of performance/dealing/usage of trade:

• Can be used to cure an indefinite K when appropriate • Only applies when conduct is different than K • Course of performance conduct suggests its ok • Course of dealing conduct from prior K suggests its ok • Usage of trade industry-wide known term • Express terms > course performance > course dealing > usage of trade • If you let it go on for a while then want it to stop, have to give reasonable amount of time to fix • If seller relies on new set course of performance, its permanent • Buyer takes risk by being good guy

The Restatement Approach to the Indefiniteness Doctrine.

• Does not provide express gap fillers, but §204 gives a court broad powers to "save" a K from indefiniteness by inserting a reasonable term under the circumstances • Even broader than UCC - enables court to insert term outside of specified gap filler areas in UCC • §204 and comments to §33 suggest some reasonable terms would include UCC gap fillers • Traditionally (still the majority) courts reluctant to enforce non-UCC Ks where parties have agreed to agree Restatement suggests UCC approach to imply a reasonable term o court is reluctant to impose a reasonableness requirement in light of parties express intent to agree o growing support to allow reasonable term in non-UCC Ks

acceptance by silence

• General rule: silence not valid form of acceptance • Exceptions to general rule: o Silent acceptance of services offeree silently takes benefit of services, offeror has reason to expect payment, and offeree has opportunity to reject service o Silent acceptance at direction of offeror where offeror has given offeree reason to understand that assent can be manifested by silence/inaction, offeree can accept by remaining silent Key here is that the offeree intends to accept o Silent acceptance b/c of previous conduct previous dealings make silence by acceptance reasonable (would only notify offeror if no intent to accept) o Silent acceptance of property by acting inconsistently w/owners interest

software covered by UCC?

• Generally thought that physical software is covered by Article 2, but not downloads b/c that's information

modern approach to indefinitness

• Grants a court the authority to insert terms into the agreement by 1) interpreting language to give definite effect to ambiguous term; or 2) imply a reasonable term • Both the UCC and Restatement find a K will fail for indefiniteness if the court cannot find a reasonably certain basis to determine existence of a breach or to fashion an appropriate remedy

UCC BASICS OF INDEFINITENESS. a. UCC § 2-204(3):

• If the offer itself is indefinite, it cannot be accepted apply indefiniteness analysis with completed K • Even if terms are left open a K for sale doesn't fail for indefiniteness if parties have intended to make a K and basis for giving appropriate remedy • Indefiniteness doctrine presupposes the parties had a K, but one or more terms may be so indefinite that a court cannot enforce K -uses gap fillers

other communications rather than rejection or counter

• Neutral comments • Preliminary negotiations (or inquiries) • Requests for modifications • "grumbling" acceptances • intention to take offer under further advisement

Power vs. Right of Acceptance:

• Power offeree has power to conclude K by accepting assuming consideration is present • Right option K or merchant firm offer • Right begins performance in response to an ambiguous offer to enter into unilateral K (Brooklyn bridge example) • Right offeree who foreseeably and substantially relies on offer (in some circumstances)

notice of acceptance

• R §54(1): offer invites acceptance by performance, no notification necessary unless requested • R §54(2): if offeree accepts by rendering performance has reason to know that offeror has no adequate means of learning about performance w/ reasonable promptness and certainty, offeror is discharged unless: a. Offeree gives reasonable notice b. Offeror learns of performance w/in reasonable time c. Offeror indicates notice isn't required • Under UCC 2-206(2), offeree must always give offeror notice of acceptance w/in reasonable time, except: o If nature of performance is such that the offeror would know of acceptance o When offeror states that such notice is unnecessary o If past dealings indicate notice isn't required • Diff btw R and UCC if no notice under UCC when required, no K; if no notice under R when required, K is unenforceable

What terminates power of acceptance under revocable offers?

• Rejection or counter-offer by offeree o Immediately cut off power even if offer to be held open (except when otherwise is explicitly stated) o Counters implicitly reject offer and propose new one o Judged under objective theory o Rejection is effective upon receipt by offeror (see mailbox rule) • Lapse of time if no mention, then reasonable time o Reasonable time in direct negotiations when negotiation has concluded (face-to-face, phone) o Reasonable time in letters acceptance mailed by midnight on date offer is received, or if received late in the day then by the following morning, but depends on circumstances - may extend to time of transmission o The more volatile the prie, the shorter the time of acceptance o Delayed transmission if offeree has reason to know of delay then delay doesn't extend time of acceptance • Express or implied revocation by offeror o Can be freely revoked up until moment of acceptance, even if the offeror has promised to keep it open o Must be transmitted from offeror to offeree, except: Indirect revocation offeror took definite act inconsistent with intent to enter into K & offeree finds out from reliable/trustworthy source Equal publicity rule o Revocation typically only effective upon receipt • Death or incapacity of offeror o Death power to accept is terminated upon death o Incapacity power to accept is terminated even if offeree has no notice of incapacity and accepts in good faith (traditional/R rule); power to accept not terminated if offeree had no reason to know and accepted in good faith (modern rule) • Death or incapacity of offeree o Power to accept terminated if offeree dies or becomes incapacitated before acceptance • Non-occurrence of an implied condition destruction of the thing essential to K's performance o If the thing necessary for performance is destroyed before acceptance, power to accept terminated • Non-occurrence of implied condition supervening illegality o If transaction rendered illegal before acceptance, power to accept is terminated • Non-occurrence of express condition of acceptance in terms o Offeror may make right to accept conditional upon a condition/occurrence of an event

why is UCC preferable?

• UCC has warranty of purchasability and others that would apply to any transaction - create a strict liability claim • UCC has very long SoL (usually 6 yrs), tort is usually 1-2

permissible methods of acceptance

• Unambiguous unilateral offer only accepted by performing the acts (or beginning to perform), offer becomes irrevocable for reasonable period to allow completion • Ambiguous/indifferent offers acceptance by performance, promising to perform, or beginning performance (reasonable) o Beginning of perf will also imply a promise by offeree to complete perf enforceable bilateral K • Beginning performance will not be acceptable acceptance for bilateral need a promise

types of offers

• Unilateral seeking actual performance as acceptance o Cannot revoke once beginning performance • Bilateral seeking a promise of performance as acceptance • Ambiguous unclear - acceptance by performance or promise o UCC 2-206: can be accepted in any way "reasonable in the circumstances" • General/Reward gives large number of people ability to accept, poses acceptance issues. Almost always unilateral in nature.

common law approach to indefiniteness

• Very strict - will not enforce a K without the below terms • To find a K sufficiently definite, thus enforceable, parties have to manifest agreement about: a. Subject Matter b. Quantity c. Price d. Delivery terms (when) e. Payment Terms f. Delivery Terms (where) g. Delivery Terms (single lot or in multiple lots)

past performance to cure indefiniteness

• e.g., grocery store and farm make K for delivery of 10 bushels of apples per week for the next year may fail for indefiniteness b/c no type of apple specified, but if farm delivers Fuji apples each week for 3 months and the store accepts, then this past performance has likely cured indefiniteness as to subject matter

offer

• manifestation by offeror of willingness to enter into a bargain with offeree (R §24) • raises reasonable expectation in offeree that nothing more than acceptance is needed to create a K

offeror as the master of offer

• power to specify how, when, and where offer is to be accepted • power to say who can accept

acceptance must be made:

•By someone with power to accept •At time when power of acceptance hasn't been terminated •In manner permitted by the offer •UCC invites acceptance in any manner reasonable under circumstances 2-206 -Order to buy goods for prompt shipment invites acceptance either by prompt shipment or promise to ship •Same medium of acceptance used by the offeror is reasonable R §65