Contracts

Needed thangs

Contract law principle divisions

1. Formation

2. Interpretation and implication

3. Defences to enforcement

4. nonperformance and its consequences

5. Rights and duties of 3rd parties

Sources of contract law

Primary: common law, statutes, ordinaces

Secondary: commentary by legal scholars, American Law Institutes Restatements of the law

sub judice

under adjudication

Traditional contract elements

mutual assent

consideration

Mutual assent

established by an offer and acceptance

bilateral K

Promise for a promise

Exchange of promises by both parties

Vast majority of K’s

Unilateral K’s

Promise (in exchange) for a performance (only a performance)

Very rare

Do not turn everything into a unilateral K

Offeror

The party making the offer

Offeree

The party to whom the offer is made

Restatement 24: Offer Defined

Manifestation of willingness to enter into a bargain = a communication that

Invites assent, and

indicates assent will conclude the deal

Restatement 26: Preliminary negotiation

A manifestation of willingness to enter into a bargain = a communication

is not an offer if

the person to whom is addressed

knows or has reason to know

the person making the communication needs to make a further manifestation of assent

Additional info regarding offers

Communication sent to multiple addresses are usually not offers, they are usually classified as invitations to receive offers

The offeree, if there is more than one, must be identifiable

Offeror is the master of the offer; offeror controls the person or persons whom, a power of acceeptance is created

In the case of the offer extended to unlimited # of people, who can accept tand how is to be determined by interpretation of the other

In the case of the offer extended to unlimited # of people, who can accept tand how is to be determined by interpretation of the other

first come, first serve

highest bidder

winner of a contest

first to perform

Elements of a K

completeness of terms

does it say offer (not dispositive)

Language of commitment- a promise?

would a reasonable person believe an offer was intended?

=totality of the circumstances analysis

Restatement 36: Methods of termination of the power of acceptance

An OE power of acceptance may be terminated by:

1. Rejection or counteroffer by the OE, or

2. Lapse of time, or

3. Revocation by the OR, or

4. Death or incapacity of OR or OE

Mirror image rule

The general rule for acceptance in Bilateral K

1. The terms of acceptance must mirror the terms of offer

2. Acceptance must be communicated to the OR to be effective

3. If you satisfy this rule you get acceptance

Restatement 63: Mailbox rule

When acceptance takes effect, unless offer provides otherwise.

1. An acceptance made in a mannner and by a medium invited by an offer is operative and completes the manifestation of MA as soon as put out of OE’s possession, without regard to if it ever reaches OR; but

2. An acceptance under an option K is not operative unless received by OR

3. CANNOT be used if “I have to receive offer by such and such date”

4. Cannot be used in Option K

5. CAN be used if acceptance by mail in a mnner and medium is invited

6. CAN be used when properly stamped and addressed

General Rule regarding ads

Ads are not offers, they are an invitation to make an offer

Restatement 35

THE OR is the creator of the power, and before it leave shis hands he may fashion it to his will . . . if he names a specific period for its existence, the OE can accept only during this time

Restatemnent 42: Revocation by communication from OR to OE

An OE’s power of acceptance is terminated when the OR receives from the OR a manifestation of an intention to not enter into the proposed K

Option K

1. prevents the revocation of an offer

2. Is a K whereby the OR agrees to hold the offer open for a specified period of time or, if no time specified, a reasonable amount of time

3. 2 elements: promise and KSN

Doctrines

1. offer

2. acceptance

3. counteroffer

4. revocation

5. rejection

6. option K

Restatement 45: Unilateral K

When an offer invites an OE to accept by rendering a performance and does not invite a promissory acceptance, and option K is created when the OE tenders or begins the invited performance

Acceptance of a unilateral K

Complete the performance

Can be revoked at any time prior to performance

A binding unilateral K is formed upon completion of performance