Contracts midterm

Contract

Promise or set of promise for which the breach the law in some way remedies as a duty (Offer + acceptance + consideration)

Mutual Assent

Both sides must objectively demonstrate agreement a “meeting of the minds” (Look at the parties outward manifestations of intent, not their secret intentions)

Consideration

Requires a bargained for exchange (I give you X because you give/promise me y")

Forbearance

Giving up something you have a legal right to do (Giving up a legal right can be consideration)

Past consideration

An act performed before the promise was made generally cannot serve as consideration for that later promise because it wasn’t given in exchange for the promise

Mills v. Wyman

Mills cared for Wyman’s adult son, Wyman later promised to compensate Mills, past consideration and moral obligation alone generally are not consideration for a contract

Lucy v. Zehmer

Select intent does not control when objective conduct demonstrated assent

Pre existing duty

Performance for something a person is already legally obligated to do generally not consideration for a new promise

Offer

An objective manifestation of willingness to enter into a bargain such that the other party understands that acceptance will conclude the bargain

Mesaros v. United states

Not every ad/order form is an offer, ask “did the speaker actively manifest willingness to be bound immediately by acceptance?”

Advertisement

Ordinarily are invites to make an offer, rather than offers themselves unless they are clear, definite and leave nothing material open for negotiation.

Lefkowitz v. Great Minneapolis surplus store

“Specific ad + Specific item/price + first come first serve” a sufficiently clear, definite advertisement can become an offer.

Carlill v. Carbolic smoke ball co

The company promised a reward to people who performed the stated conditions, an ad can create a unilateral offer accepted by performance when sufficiently definite

Leonard v. Pepsico

The harrier jet ad would not cause a reasonable person to believe Pepsi was seriously offering a military jet

Counteroffer

A purported acceptance that is conditional on the offeror’s assent to additional or different terms is not an acceptance, but a counteroffer

Revocation

An offer. can be revoked before the offeree accepts

Dickson v. Dodds

A promise to keep a contract open requires an option contract supported by consideration. Offer can be revoked at any time before acceptance.

Indirect revocation

Offerees power of acceptance terminates when 1.) Offeror takes definite action inconsistent with entering the contract AND 2.) Offeree aquires reliable information on that action

Dickson v. Dodds 2

Reliable grapevine information can potentially revoke , deadline alone is not an option contract.

Mailbox rule

Once an acceptance has been placed in the mail, a contract has been formed

Morrison v. Thoelke

Acceptance was effective upon dispatch, before the seller tried to cancel “Acceptance mailed, steel jaws of contract shut”

Acceptance by silence

Silence normally DOES NOT equal acceptance

Promissory Estoppel

A promise that the promisor should reasonably expect to indulge action or forbearance, and which does indulge such action or forbearance, is binding if injustice can be avoided only by enforcement

Feinberg v. Pfeiffer

No consideration? check reliance. Employer promised pension, Feinberg retired, reliance supports enforcement.

Elvin v. Franklin

A party can be held liable if they make a promise that reasonably induces another party to incur expenses in reliance on it

Hoffman v. Red Owl stores

Promissory estoppel can potentially apply even when negotiations never mature into a traditional contract if the promisee reasonably relied to their detriment