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34 Cards in this Set
- Front
- Back
- 3rd side (hint)
Bobby hears that Andy and Sylvia have broken up, so he asks Sylvia for a date. Needing someone to talk to, Sylvia says yes. Wanting to make a great impression, Bobby spends $600 for new suit, and other expenses. Two hours before she is supposed to met Bobby, Sylvia reconciles with Andy. She calls Bobby and tells him she can't go out with him. Bobby threatens to sue for breach of contract. Does he have a case?
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A contract is an agreement that the law will enforce. This is a social agreement, and is not subject to any laws.
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Married couple executed 16 page contract defining several aspects of how their marriage would work. Suppose that the husband has been violating the tailgaiting rule. Can wife get an injunction. If contract has a typical "events of defaults and remedies" section, can the husband give the wife a notice of default, opportunity to cure the default, and then exercise remedies, which include fines and household chores on her?
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Although this may look like an enforceable contract on the surface because of the legality of marriage, this is not an enforceable contract because the nature of their arrangment is primarily social.
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Waitress sued over practical joke where she was told she would get a Toyota Car if she sold the most products in a rewards contest. She won and manager tried to give her a Toy Yoda. She sues. What result?
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Issue: Whether an offer based on a jest is enforceable?
Rule: Objective Theory of Contracts. Analysis: 1) Waitress would most likely be rewarded on her claim b/c she could reasonably expect that the manager was offering her a Toyota Car. 2) However, she is working for the company, and should do her job to the best of her ability every time she works. It would be different if she was not an employee because she would have to put in the extra effort to win the prize. Conclusion: Most likely she is awarded the car. |
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UNIDROIT 4.2
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(1) The statements and other conduct of a party shall be interpreted according to that party's intention if the other party knew or could not have been unaware of that intention.
2) If the preceding paragraph is not applicabe, such statements and other conduct shall be interpreted according to the meaning that a reasonable person of the same kind as the other party would give to it in the same circumstances. |
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Is UNIDROIT 4.2 consistent with the "objective theory of a contract"?
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UNIDROIT looks first at the intention that is knowable to the other party. If that can't be ascertained, then it moves on to the objective theory of contracts.
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Issues: OTC
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Consider an American Importer that contracts with a German company to supply it with commercial quantities of chickens, which it intended to resell to restuarant supply companies for resale to customers. The contract s governed by US law and simply provides for the supply of chicken at various rates for various sizes of birds. When the chickens arrive in the US, bad chickens. Claims German company breached contract. The German company protests that it has supplied just what the contract called for chickens. How will this dispute be resolved under OTC?
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Issues:
1. Is quality of chickens implied in the offer? |
Rule: Objective theory of contracts.
Analysis: With OTC you look toward the offer and the circumstances surrounding the offer. If a reasonable person could conclude that prior business dealings implied that these would be good chickens, then that could be implied in the offer. However, if no such relationship exists, and the quality is not a manifested term of the offer, it is unlikely the American company will be able to recover. C: More than likely the American company will not be able to recover. |
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Unidroit 2.1.2
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Definition of an offer:
A proposal for concluding a contract constitutes an offer if it is sufficiently definite and indicates the intention of the offeror to be bound in case of acceptance. |
As opposed to Res. 24, no definite in that.
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Lefkowicz vs. Lonegran
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What was it that allowed the advertisement in Lefkowitz to be an offer when the advertisement in Lonegran was not an offer.
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Most likely the specificity of the ad in Lefkowitz made it sufficiently definite to constitute an offer. The ad in Lonegran was more likely soliciting offers, because it was not specific, it had no words expressing fixed intention, etc.
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Manifested Intention in words
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Must convey a fixed purpose that an objective third person could assent to concluding the offer.
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Courteen Seed Co. v Abraham
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When you have only one thing to sell and you send out a communication to a number of people, that's a powerful fact in favor of finding the communication is not an offer. Why wasn't that the case in Southworth v. Oliver?
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The circumstances leading up to the offer were strong evidence that the intention of Oliver was to contract with Southworth. The fact that Southworth had multiple items for sale in his quote and his quote was sent to multiple people did not diminish the definitiveness of the offer.
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Southworth v. Oliver
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Guide to judging whether something is an offer:
1. OTC 2. Language 3. Who the offer is addressed to. 4. Definiteness of the proposal. |
"It is recognized that although a price quotation, standing alone, is not an offer, there may be circumstances under which a price quotation, when considered together with facts and circumstances, may constitute an offer which, if accepted, will result in a binding contract.
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Restatement 27
See: Continental Labs v. Scott |
Existence of Contract where written memorial contemplated.
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Manifestations of asseent that are themselves sufficient to conclude a contract will not be prevented from operating so by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show the agreements are preliminary negotiations.
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Restatement 28
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UCC 2-238
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Deals with auctions
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Restatement 29
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To whom the offer is addressed
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(1) The manifested intention of the offeror determines the person or persons in whom is created the power of acceptance.
(2) An offer may create a power of acceptance in one or more of a specified group or class of persons, acting separately or together, or in anyone or everyone who makes a specified promise or renders a specified performance. |
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Restatement 30
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Form of Acceptance Invited
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(1) An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing specified act, or may empower the offeree to make a selection of terms in his acceptance.
(2) Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances. |
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Restatement 32
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Invitation of Promise or Performance
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In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offeror requests of by rendering a performance, as the offeree chooses.
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Restatement 36
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Methods of Termination of Power of Acceptance
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(1) An offeree's power of acceptance may be terminated by
(a) Rejection or counteroffer (b) Lapse of time (c) Revocation of the offeror (d) Death or incapacity of the offeror. n (2) In addition, an offeree's power of acceptance is terminated by the non occurence of any condition of acceptance under the terms of the offer. |
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Restatement 24
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Offer defined
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An offer is
(1) the manifestation (2) of willingness to enter into a bargain (3) So made as to justify another that (a) his assent to that bargain is invited (b) and will conclude it Note b. Proposal of a Conditional Gift- is not an offer b/c it lacks the element of exchange...It is not enough that there be a promise performable on certain contingency. |
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Restatement 25
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Option Contracts
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An option contract is
(1) a promise which meets the requirements for the formation of a contract, and (2) limits the promisor's power to revoke the offer. |
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Restatement 26
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Preliminary Negotiations
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A manifestation of willingness to enter in a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
Note: Usually seen in advertisements, price quotes, invitations of bids or other offers. Some ask "make me an offer" |
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MGM v. Scheider
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Industry standards can change the reasonable persons expectations for terms of the offer.
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"Enough has been shown as to the custom and practice of the industry..."
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Scarlett sends a letter to Rhett in which she says: "If you submit a written offer to buy Tara for 250,000 or more, I will accept your offer. Rhett submits a written offer to buy Tara for 275,000. Scarlett says, "Rhett, I've changed my mind." Do they have a contract.
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Both unlateral and bilateral
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Rhett performs by sending a letter.
Rhett offers by submitting a written offer to buy Tara. Contract formed under bilateral agreement that promises land for the performance of sending the letter of assent. |
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A rural landlord wants to convince his tenant to locate more cattle on the land that the tenant rents b/c the rent is measured in terms of cows on the land and goes up as the size of the heard increases. He says to the tenant, "I will see that there will be plenty of water because it never failed here before." The tenant relied upon the statement and acquired more catte. The water failed and the tenant sued. Had the landlord made an offer to see there will be enough water, and if so what were the terms of the offer.
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Reasoning from the court in the actual case Anderson v. Backlund.
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This rather characterized the talk more as visiting or advice than a contract, and we are forced to the conclusion that the parties did not make a contract. There is a lack of mutual assent to the same proposition, and the language is entirely too indefinite and general as to the usual elements of a contract. The minds of the parties never met upon the essential terms. HN1Contracts must be certain in terms and not so indefinite and illusory as to make it impossible to say just what is promised.
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Factor #1 in determining offer:
Language |
Some Courts rely heavily on the language used showed a clear intent to be bound. Lucy, Lefkowitz and Courteen Seed.
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Sometimes the circumstances under which the communication was made outweigh the language. See Southworth
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Factor #2 in determining offer:
Specificity and Detail |
Size of agreement can determine the amount of specificity. Large- more detail. Small- less detail.
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Factor #3 in offer:
Customs in Business Practices |
Provide Gapfillers
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Customs in Scheider and Continental
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Factor #4
Multiple Acceptance Problem |
Limited # of items--> likely soliciting offers. Form letters- likely not an offer.
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Factor #5
Context |
Southworth and Courteen Seed
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In terms of negotiating leverage, better to be an offeror or an offeree?
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Offeror- Master of his offer
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Restatement 50
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Acceptance of Offer Defined; Acceptance by Performance: Accepted by Promise
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1. Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.
(2) Acceptance by performance requires that at least part of what the offer request be performed or rendered and includes acceptance by performance which operates as a return promise. (3) Acceptance by a promise requires that the offeree complete every act essential to the making of the promise. |
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Restatement 45
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Option Contract Created by Part Performance or Tender
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(1) Where an offer invites an 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 the beginning of it.
(2) The offeror's duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer. Note e. Offeree is not bound to finish performing option contract, but the offeror is bound to honor the time period it takes to complete the performance. |
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Important Restatment 45 note f.
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The distinction between preparing for performance and beginning the performance in such cases may turn on three factors...
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1. The extent to which the offeree's conduct is clearly referable to the offer
2. The definite and substantial character of the conduct 3. The extent to which it is of actual or prospective benefit to the offeror rather than the offeree, as well as the terms of communications, prior course of dealings, and relevant usages of trade. |
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Restatement 82 (2)
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An option contract is made irrevocable by statute.
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Cool
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Restatement 54
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Acceptance by Performance: Neccessity of Notification to Offeror
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(1) Where an offer invites an offeree to accept by rendering a performance, no notification is neccessary to make such an acceptance effective unless the offer requests such a notification.
(2) If an offeree who accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty, the contractual duty of the offerer is discharged unless: (a) the offeree exercises reasonable diligence to notify the offeror of acceptance (b) the offeror learns of the performance within a reasonable time, or (c) the offer indicates that notification of acceptance is not required. |