Contracts - initial set

1. CL: real estate, personal services;
2. UCC Article 2:
1. Governs transactions that involve a sale of goods, things that are moveable at the time of transaction (always include growing crops);
2. Not applicable if goods to be severed by buyer and is sale of un-extracted oil, gas, minerals, timber or structures.
3. Mixed
1. determine predominant purpose of the contract;
2. apply that law to the entire contract, UNLESS
- K divides payment based on goods and services.

Valid K must have: mutual assent; consideration; no defenses to formation.

Offer is a manifestation of intent to be presently bound to a specific undertaking communicated to offeree creating power to acceptance in offeree, unless offer terminates.

Terms must be definite and certain enough to be capable of being enforced.
EXCEPT: sale of real estate must have price and land description.

A contract for the sale of goods may be made in any manner sufficient to show agreement.
1. Must contain quantity.
2. If no price, then offer if parties so intend (agreement can be shown by conduct);
3. CL mirror-image rule abondoned

...then no offer under CL or UCC

a. Offer can be vague;
b. Increased quantities so long as not "unreasonably disproportionate";
c. Parties must use best efforts to perform.

a. Must have duration of employment

An advertisement is not an offer, UNLESS:
1. Promise in nature of a reward;
2. Specific as to quantity and expressly indicate who can accept.

1. reasonable time;
2. stated time.

1. unambiguous statement by offeror to offeree of unwillingness or inability to contract;
2. unambiguous conduct by offeror indicating an unwillingness or inability to contract that offeree is aware of.

1. RULE: Revocation of offer sent through mail is not effective until received;
2. RULE: An offer cannot be revoked after it has been accepted.

1. Option contract;
2. UCC Firm Offer;
3. Detrimental Reliance;
4. Executory Unilateral K

a. Promise to keep offer open; and
b. Promise supported by payment or other consideration;
i. Can accept until lapse or revocation

a. Cannot be revoked for up to 3 months (max) if:
i. Offer to buy or sell goods;
ii. Signed, written promise to keep the offer open for stated period or reasonable period;
iii. Party is a merchant
1. merchant: engaged in business or profession or one who regularly deals in goods of the kind

a. Offer cannot be revoked if there has been detrimental reliance by the offeree that is reasonably foreseeable

a. Start of performance, not a mere preparation, makes unilateral contract irrevocable for reasonable time.
i. NB: if only preparation, check detrimental reliance!

a. Terminates offer; and becomes a new offer;
b. Watch out for:
i. Mere bargaining (Will you take $200?);
ii. If a statement (I'll pay $200) = counteroffer.

a. Terminate offer; and becomes new offer;
b. "I accept" if, provided that, so long as, but, on condition that.

Cl only Mirror Image Rule.
i. An acceptance adding new terms is treated as a counteroff

i. Seasonable expressions of acceptance creates contract.
ii. Questions to ask?
1. is there a contract? (seasonable issue)
2. is additional term a part of the contract?
a. If at least one party is NOT a merchant, then additional term is merely a proposal.
b. If both are merchants, then:
i. Additional term is part of the contract, UNLESS offeror rejects within a reasonable time OR it materially changes the original offer OR offer expressly limits acceptance to original terms.

i. If acceptance contains contradictory terms, the K consists only of the terms on which the offer and acceptance agree.
ii. Inconsistent terms replace with gap-fillers.

After oral agreement, written confirmation with additional terms treated same as alteration rule (non-merchant: proposal; merchant: reject or material change)

1. RULE: Death or incapacity of either party terminates offer.
2. Exceptions:
a. Option K
b. Part performance of offer to enter into unilateral K

1. Only a person who knows about the offer; or
2. the person to whom the offer was made;
3. Look out for assignment
a. Offer canNOT be assigned
b. Options can be assigned UNLESS the option otherwise provides [thus, txfr ability to accept underlying offer]

1. In response to offer, Offeree fully performs
a. Full performance is always acceptance, UNLESS failure to notify of performance
i. Failure to notify discharges contractual duty
ii. NB: watchout for geographic separation of parties

i. If acceptance contains contradictory terms, the K consists only of the terms on which the offer and acceptance agree.
ii. Inconsistent terms replace with gap-fillers.

After oral agreement, written confirmation with additional terms treated same as alteration rule (non-merchant: proposal; merchant: reject or material change)

1. RULE: Death or incapacity of either party terminates offer.
2. Exceptions:
a. Option K
b. Part performance of offer to enter into unilateral K

1. Only a person who knows about the offer; or
2. the person to whom the offer was made;
3. Look out for assignment
a. Offer canNOT be assigned
b. Options can be assigned UNLESS the option otherwise provides [thus, txfr ability to accept underlying offer]

1. In response to offer, Offeree fully performs
a. Full performance is always acceptance, UNLESS failure to notify of performance
i. Failure to notify discharges contractual duty
ii. NB: watchout for geographic separation of parties

2. If the offeree starts to perform
a. RULE: if the offer does not require a particular method of acceptance, then start of performance indicates acceptance.
i. NB: if states performance required to accept, then we have a unilateral K and full performance required for acceptance.

3. Offeree promises to perform
a. RULE: most offers can be accepted by promise to perform.

4. Offeror and offeree are at different places and there are conflicting communications ("mail box rule")
a. RULE: a communication is effective when received.
i. N/A to
1. offer stipulating "accepted when received"
2. option contracts
b. RULE: but an acceptance is effective when sent IF
i. Made in a manner and by a means invited; and
ii. Offeree has not already sent a rejection
1. Then, whichever arrives first is operative

UCC: acceptance may be in any reasonable manner and by an reasonable medium.
a. Buyer inspects and indicates good conform or that will keep in spite of nonconformance;
b. Buyer fails to reject within a reasonable time or fails to notify seller seasonably of rejection; or
c. Buyer does anything inconsistent with sellers ownership.
d. NB: seller of goods sends the wrong goods.
i. RULE: a buyers offer to buy seeking prompt shipment to ship or 2) by shipment of conforming or non-conforming goods.
ii. RULE: Shipping the "wrong" goods is simultaneously an acceptance and a breach.
iii. Exception: Accomodation
1. Shipping nonconforming goods with explanation of why different goods are sent and belief that they will be acceptable.
2. Creates NO contract; and NO resultant breach; merely creates counteroff

a. Def: bargained for legal detriment

2. If the offeree starts to perform
a. RULE: if the offer does not require a particular method of acceptance, then start of performance indicates acceptance.
i. NB: if states performance required to accept, then we have a unilateral K and full performance required for acceptance.

3. Offeree promises to perform
a. RULE: most offers can be accepted by promise to perform.

4. Offeror and offeree are at different places and there are conflicting communications ("mail box rule")
a. RULE: a communication is effective when received.
i. N/A to
1. offer stipulating "accepted when received"
2. option contracts
b. RULE: but an acceptance is effective when sent IF
i. Made in a manner and by a means invited; and
ii. Offeree has not already sent a rejection
1. Then, whichever arrives first is operative

UCC: acceptance may be in any reasonable manner and by an reasonable medium.
a. Buyer inspects and indicates good conform or that will keep in spite of nonconformance;
b. Buyer fails to reject within a reasonable time or fails to notify seller seasonably of rejection; or
c. Buyer does anything inconsistent with sellers ownership.
d. NB: seller of goods sends the wrong goods.
i. RULE: a buyers offer to buy seeking prompt shipment to ship or 2) by shipment of conforming or non-conforming goods.
ii. RULE: Shipping the "wrong" goods is simultaneously an acceptance and a breach.
iii. Exception: Accomodation
1. Shipping nonconforming goods with explanation of why different goods are sent and belief that they will be acceptable.
2. Creates NO contract; and NO resultant breach; merely creates counteroff

a. Def: bargained for legal detriment
b. Analysis steps:
i. Look at each promise separately
ii. Identify each promisor and determine if detriment was incurred.

i. Performance, something not legally obligated to do.
ii. Forebearance, not doing something legally entitled to do.
iii. Promise to perform.
iv. Promise to forbear.

i. Was there anything bargained for?
ii. Did the party incur a legal detriment?
iii. Was the promise consideration for another promise?
1. Illusory promise exception: "I promise unless I change my mind."
iv. Amount of consideration irrelevant.
v. Past consideration is NOT consideration
1. Exception: expressly requested and expectation of payment

1. RULE: doing what legally obligated to do is not sufficient consideration for consideration.
2. Exceptions:
a. Addition to or change in performance.
b. Unforeseen difficulty so severed as to excuse performance.
c. Third party promise to pay additional money.
3. UCC has no pre-existing duty rule, but uses the good faith test for changes in existing sale of goods contracts.
a. NB: no need for new consideration.

1. if debt is due and undisputed, then part payment is NOT consideration for the release of the debt.
2. If not due or disputed, then part payment is consideration.

i. Written promise to satisfy an obligation for which there is a defense to payment.
ii. A seal is not a consideration substitute (ie, no legal significance)
iii. Promissory estoppel is the main substitute:
1. promise
2. reliance that is reasonable, detriment, and foreseeable
3. enforcement necessary to avoid injustice.

a. Who lacks capacity?
i. Under 18
ii. Mental incompetent/insanity
iii. Intoxicated person, if other party has reason to know.

b. Consequences of incapacity
i. Right to disaffirm by person with capacity
1. NB: incapable party may still sue for breach!
2. if incapable is sued, then assert defense of incapacity
ii. implied affirmation by retaining benefits after gaining capacity.
1. K made before capacity; person gains capacity; keeps subject matter of K without complaint after capacity gain.
iii. Liability for necessaries
1. this is quasi-contract liability