Unilateral Contracts

Parol Evidence

"extrinsic" evidence (written or oral) of agreements or negotiations between the parties NOT included in the K

Types of consideration

1. Benefit-Detriment Test 2. Bargain-for-Exchange 3. Negotiation ?

UCC "Gap Fillers"

1. Course of Performance- How parties have already (so far) acted in the course of this dealing 2. Course of Dealing- How parties have acted in prior dealings 3. Trade Usage- How members of the particular industry typically act.

Function of Legal Formalities

1. Evidentiary Function: Provides evidence of the contracts (1) exidtence AND (2) a contract's terms. 2. Cautionary Function: Evidence an intention to be bound. Provides a check against hasty action 3. Channeling Function: Channels into court the types of cases the court wishes to hear; and channels away form the court types of cases the court doesn't want to hear.

Unilateral Contract

A unilateral contract is when the offeror exchanges a promise of future performance only in return for the offeree's actual rendering of performances rather than mere promise of future performance Performance = acceptance

Negotiation

Consideration consists of deliberation. Analysis turns on whether promises/performances are bargained for (negotiated)

Benefit-Detriment Test

Consideration may consist of either some right, interest, profit, or benefit accruing promisor, OR some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the Promisee.

Modern rule for Unilateral Contracts

Offer is not revocable once offeree renders substantial performance (Coldwell Banker approach) R§45

Bargain-For-Exchange

Reciprocal Inducement -- the promise must induce the detriment and the detriment must induce the promise

Traditional rule for Unilateral Contracts

The offer is revocable by the offeror until the offeree renders complete performance

Restatement §45

Where an offer invites and offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.

Merchant (defined)

a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction §2-104

Goods (defined)

all things which are movable at the time of identification §2-105

Examples of what is NOT Consideration

o Motive (Love& affection) o Nominal Consideration; Mere Recitation of Consideration; False Recital of consideration; disguised gifts o Testamentary Gifts o Past Performances o Illusory Promises o Preparation of Performance o Morality o anything un-bargained for, unsubstantial, un-exchanged, or any non-meaningful exchange between parties