#16405 - Contracts Exam Attack Outline - Contracts

– – –Formation– – –

UCC or CL? Predominant purpose test Jannusch [food truck busi=good] | Princess [boat repair=serv.]

Mutual Assent Offer, Acceptance, Consideration

• Obj. Approach: bound by terms o’ what u sign, absent fraud, duress, or mutual mistake. Ray v. Eurice [duty2read specs] | Allen v. Bissinger [obj. theo. copy of report] R21

Offer: manifestation of willingness to enter into bargain R24

• Req’s: (1) create reason. expectations [or be conspicuous C&J Fert [apparent inside job exclude] R211] (2) certain essential terms: CL- price & subject Walker [lease $ exclude & undeterminable] R33; UCC- quantity U2-201 (3) communicated by words/conduct R4

  • Must provide sufficient notice of terms Hines [browsewrap] cf. DeFontes [shrinkwrap returnable]

• Indefiniteness:

  • UCC- some open terms ok Jannusch [no date ok, if intent to K, conduct, basis for remedy] cf. EC Styberg [too many missing: ID of parties, subject, consideration, $, #] U2-204(3)

  • CL-“must be sufficiently definite” Walker R33; “reasonably believe assent would make K” Brown Machine [response to quote request insufficient]

  • LOI: robust good faith in, can be K to make K, or binding if specific Quake R33

    • LOI not K if: usually written; few details in LoI; req’s formal to express all terms; high $; negs indicate intent to reduce to formal; negs abandoned early in process; disclaiming party provided few assurances; no reliance by party seeking enforcement

• Not O: price quote EC Styberg U2-204; advert, preliminary negotiation, invite to make O Lonergan [ad for land in news] R26

  • Ad exception: (a) for reward or (b) definite [esp. quant.], no room for further negotiate, contain present K’ual intent, & unlikely to be over-accepted Sateriale [Camel cash] R45 or (c) deliberately mislead into think O exists Izadi [bait&switch] R26

• Usually O: auction bid; construction bid Baird [offer revoked; use not acceptance]; purchase order Brown Machine U2-207

• Revocation: direct, communicated to offeree R42; indirect R43 Normile [notif. via realtor, sold to other]; publication R46

• Irrevocable: parties agreed & paid C for option; PE on option if no consid. Berryman [buyer relied on unpaid/recital option by collecting investors]; part perform of uni. K R45 Cook [bonus for commission sales]; firm offer U2-205; subcontractor bid accepted R87(2) Drennan [unless: obvious mistake, subcon says revocable, gencon inequitable conduct e.g. bid shopping, or merely estimate not bid]

Acceptance: R50 U2-206

• Modes of A: offeror is master of O- place, time, manner R60 U2-206(1)

  • If unspecified, reasonable A under circumstance U2-206(1)(a)

  • Uni. K: part/substantial perform [creates option, prom. estop.] Sateriale | Cook R45 R50(2) U2-206(2); ship goods U2-206(1)(b)

  • Bi. K: communicate, silence R69, begin perform, as O req’s R60

• MBR: Lonergan R63. Except reject/counter-O R40 or option K accept R63(b)

• Terminates power of A: revocation; rejection R38; counteroffer R39; lapse of reasonable/specified time R41; death or incapacity of offeror/offeree R48; destruction of subject matter or supervening illegality.

• Different/additional:

  • CL: Mirror Image Rule- must respond to terms of O R58, or else is counter-O R39 Normile; Last Shot Rule- counter-o can be accepted by perform Princess R59

  • UCC: U2-207 Gottleib [immaterial if no surprise/foreseen hardship] | DeFontes [conditional because rejectable by return insufficiently clear] | Brown Machine [quote request, quote, O=purchase order expressly limited to terms, A=acknowledge with indemnity valid acceptance b/c not conditional]

Consideration:

• Req’s: Bargained-for promise & performance induce other R71(2) Pennsy [Free AggRite induced detriment of collection; bargain over terms not req’d]

• Not req’d: benefit/detriment Hamer [old rule: 5k for abstaining insuff. b/c no benefit] R79(a); equivalence R79(b); mutuality R79(c)

• Not C: condition to gift Plowman [picking up check]; sham Dohrmann [middle name]

• Purported/nominal: Maybe Dougherty [“value received” recital insuff.; was gift] cf. Marshall [$10 maybe paid for retire pkg., though non-issue in this case; working was not detriment but benefit to company was sufficient]; option K R87(1)(a) cf. Berryman [nominal but non-issue since reliance]

• Past/moral: Trad-No Mills [pay for care of son]; Modern- Yes, if promise restitution Webb [benefit to self, cooling off, promise, acted upon] R86

• Preexisting legal duty: No R73, unless made to 3^rd party, pay old or discharged debt R82 R83, or original K unenforceable R85

• Promissory estoppel can replace C R90

– – – – – – – – –Liability– – – – – – – – –

Promissory Estoppel [no C – detriment reliance instead] R90 R139

• Req’s: (1) promise (2) reasonable, detrimental reliance [see R139] (3) injustice only avoided by enforcement Katz [pension after chase]

• Not req’d: “clear and definite promise,” just induced reasonable reliance Pop’s Cones [“95% there, don’t renew lease”]; all elements, if exceptional circumstances [nat’l house crisis] Aceves [forego bankruptcy, vague promise to renegotiate]; explicit promise, where promise implied by combo of words & acts in family context Harvey [helped build $200k home on property]; option consideration actually paid Berryman; written promise, if big detriment [SoF exception] Alaska Dem. [quit job move to Alaska] R139; action or forbearance if marriage settlement or charitable subscription [only some cts] King R90(2)

Restitution/Quasi K recover reasonable mkt value to avoid unjust enrich.

K implied in law (unjust enrich., quantum meruit) or fact (conduct):

• Req’s: (1) benefit conferred (2) recipient knows of B (3) B accepted or retained (4) inequitable/unjust to retain w/o paying Watts [marriage, damages for value of housekeeping]

  • Construction: subcon can recover from property owner if (1) exhausted remedies against gencon (2) subcon remains unpaid (3) owner gave no consideration to anyone else for subcon work Commerce Partnership

  • No consent/request: (1) inofficiously & intend to charge (2) prevent bodily harm or pain (3) no reason to believe would not consent (4) consent impossible or immaterial Credit Bureau [suicidal hospital] R(1^st)Restit.116

Promissory restitution: (1) material benefit (2) promise made (3) cooling-off period (4) promise carried out Webb R86

– – – – – – – – –Statute of Frauds– – – – – – – – –

Common Law

Applies to: (a) executor-administrator [for duty of estate], (b) suretyship [for duty of another], (c) marriage, (d) land, (e) more than 1 year R110(1)

• One-year: if any promise cannot be performed in year [e.g. work for 2 years, but not hire for life], all K promises under SoF until one party completes performance R130

Req’s: written, party charged signed, essential terms ($) R131

Exceptions:

• Linkage rule: multi. docs if (1) one signed by party enforced against, (2) contain essential terms, (3) both parties assent that docs refer to subject matter of transaction Crabtree [memo+payroll] R132

• Part performance: (mostly for land) “changed position”- acted in reliance on promise, injustice R129; conduct “unequivocally referable” to K - valuably improved, in possession Beaver [85k improve, check memo ‘for land’]

• Promise estoppel: promise reasonably induces very detrimental action; consider (a) other remedies inadequate, (b) definite and substantial act, (c) action or other evidence establish promise & terms, (d) reasonableness of act, (e) act foreseeable by promisor Alaska Dem. R139; one party reasonably relies on other to write Brookside [change basil K]

UCC:

U2-201(cmt.1): req’s evidence of K, charged party signed [broad], quantity

U2-201(1): sale of goods for $500 or more

• Omitted/incorrect term: writing not insufficient, but enforceable only to quantity of goods stated in writing

U2-201(2): Merchants confirmation rule

• Confirmation of K: merchant sent and received in writing, where recipient has reason to know contents, is sufficient unless written notice of objection given within 10 days after receipt.

2-201(3): exceptions

• (a) Specially-manufactured goods: substantial beginning of manufacture or commitments for procurement of custom, special order, antique, not suitable for sale to others

• (b) Judicial pleadings: party against whom enforcement is sought admits contract was made in court testimony or pleadings

• (c) Part perform: goods or payment accepted Buffaloe [A=checks held 3d] | Brookside [writing promise estop. waives SOF; accepted basil waived NOM]

– – –Meaning of Agreement– – –

Principles of Interpretation

UCC Factors: (1) plain meaning, look within 4 corners, (2) trade usage [unless carefully negated, not boilerplate U2-202(cmt.2)], (3) legal standards [e.g. USDA definition], (4) market context [prices], (5) preliminary negotiations Frigaliment [chicken] | Nanakuli [price protection trade usage/course implied if not inconsistent, even if create exception to express term if so prevalent that parties probably intended to incorporate] U1-303

CL:

• Known difference: if A knew or should have known of diff. meaning, and B did not and should not have known, go with B’s interpret. Joyner R201

• Rules: in light of all circumstances/purpose; writing as a whole; general meaning unless technical field; course of performance R202

• Preference: (a) makes agreement reasonable, lawful, effective; (b) express > performance > dealings (prior agreements) > trade usage; (c) specific & exact terms > general language; (d) added/separately negotiated terms > standard terms R203

• Reason. expect.: interprets inconspicuous non-negotiated terms of adhesion K (unequal...