E&E Outline

Thursday, October 06, 2011 4:05 PM

Objective Test Lucy v. Zehmer Court found that Lucy was in earnest and under the objective test, has no reason to believe Zehmer was not. Court also declined to allow Zehmer to avoid the contract on grounds of mental disability (capacity) caused by intoxication because it did not believe that Zehmer was drunk enough. Court evidenced this by the acts he carried out, in signing the form, asking his wife to sign it, and communicating terms without having any issues of comprehension resulting from intoxication. Leonard v. PepsiCo Can a reasonable person understand the offer to be in jest? The actual cost of a Harrier jet is $23 million -- couldn't possibly/reasonably be exchanged for $700,000 OFFER Restatements 24 - "manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it." Necessary Terms for Offer 1) Must be communicated to the person addressed 2) Must indicate a desire to enter into contract a) Must specify performances to be exchanged and the terms that will govern b) May also specify manner and time of effective acceptance 3) Must be directed at some person or group 4) Must invite acceptance 5) Must create reasonable understanding that upon acceptance, contract will arise without any further approval (Power of Acceptance) Distinguishing Offers from Mere Proposals 1) Words used in the communication can help clear up ambiguity 2) Must not omit significant terms -- comprehensiveness and specificity are important 3) Prior dealings help lead credence to how communication should've been understood 4) Common practices or trade usage are important in understanding exchange ACCEPTANCE Acceptance must be a volitional act, performed freely, deliberately, and with the intent to enter a contract on the terms of the offer. Like the intent to make an offer, intent to accept is determined objectively. The question is not whether the oferror actually intended to accept, but whether a reasonable person in the oferror's position would have understood the manifestation as acceptance. RESTATEMENT 32 - Unless the wording of the offer or the circumstances clearly indicates otherwise, the offeror is indifferent to whether acceptance is by promise or performance, so the offeree may choose to accept either way.

LANGUAGE IS IMPORTANT. EXCLUSIVITY, OPENESS, AND OTHER ISSUES THAT MAY MAKE AN OFFER'S PERFORMANCE BINDING IN ONLY ONE FASHION CAN BE DETERMINED SOLELY BASED ON THE LANAGUAGE USED. UNLESS OTHERWISE EXPLICITLY INDICATED, ACCEPTANCE CAN BE OFFERED IN VARIOUS FORMS.
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EXPLICITLY INDICATED, ACCEPTANCE CAN BE OFFERED IN VARIOUS FORMS.

RESTATEMENT 62 - Offer does not mandate acceptance by performance, so it can be accepted by performance or promise. The commencement or tender of performance constitutes an implied promise to complete the performance within the time called for by the offer. Therefore, the commencement or tender of the performance is an acceptance by promise creating a bilateral contract. RESTATEMENT 45 - Offer calls for performance as the exclusive mode of acceptance. This treats the beginning or tender of performance as creating an option in favor of the offeree, so that the offeror loses the right to revoke once performance has been tendered or begun. To exercise this option, the offeree must complete the performance in the required time. If he fails to do so, the option is not taken up and the offer lapses. EX: Aunt writes to nephew to come down and help clean up farm for summer, paying him $2000 when work is complete. Aunt says that "if you wish to accept my offer, just come down this summer and do the work." Nephew comes down in the summer and commences work; Aunt retracts offer while nephew is half way through work. Answer: R62 and 45 can help create acceptance through beginning of performance, thereby obligating Aunt to fulfill contract. An argument could also be made that because the nephew's work may have resulted in an unpaid-for benefit to his aunt, eh may be entitled to recover the value of this benefit on the ground that it would unjustly enrich his aunt to allow her to enjoy the benefit of his work without paying for it. Thus, he may be entitled to restitutionary relief under the theory of unjust enrichment. This is also a beneficial viewpoint for the offeror, since this approach brings the contract into validity as soon as performance begins, the offeree is bound to complete the work and failure to do so not only precludes his contractual recovery but also makes him liable for damages for breach of contract. Preparation does not equal performance. Must be actual performance. SIDE NOTES The oferee does have a duty of notification if the performance in question is not rendered directly or in the presence of the offeror and the offeror has no reasonable prompt and reliable means of learning of it. Ex: Aunt doesn't live on farm that she wants cleared; Nephew must communicate his intent to accept offer AND notify Aunt within reasonable amount of time after commencing performance if he knows or should know that she has no means of learning of his acceptance with reasonable speed and certainty. If notice is not given (and the aunt does not otherwise hear of this performance) within a reasonable time, the acceptance becomes ineffective and the aunt's contractual duty is discharged. (PAUSED ON P.88 - MOVING ONTO CONSIDERATION) CONSIDERATION Only an issue when there is an outstanding promise to be enforced. Does not affect the validity of an executed performance -- one that's already been completed.
Elements of Consideration Detriment A legal detriment is any relinquishment of a legal right. Importance is not harm, but yielding of legal right. Could take the form of an immediate act (doing or giving something), a
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 Could take the form of an immediate act (doing or giving something), a forbearance (refraining from doing something) or the partial to complete abandonment of an intangible right. It could also be a promise to act, forbear, or abandon a right in the future. No discrimination between immediate detriment or future detriment. Ex: Al sells Buster skis for $100. Buster's payment of $100 is an act constituting his detriment. Standard bilateral contract is promise by each party in exchange for and inducing the promise by the other. RESTATEMENT 79(a) - If the requirement of consideration is met, there is no additional requirement of loss or disadvantage to the promisee. See Hamer v. Sidway Benefit Plays only an evidentiary role. The promisee's detriment usually easily translates into a benefit to the promisor. Ex: Al sells his ski's for $100 to Buster. Al's benefit is the $100 (which is Buster's detriment). Buster's benefit is the ski's (which are Al's detriment).

Bargained-for Exchange The parties must have bargained-for (that is, agreed to) an exchange of the promise for the detriment, so that each induces the other. "Bargain Theory" of consideration RESTATEMENT 71 - Requires that a performance or return promise must be bargained for to constitute consideration. It must be sought by the promisor and given by the promisee in exchange for the promise. RESTATMENT 33 - Defining a bargain as an agreement (in turn defined as a manifestation of mutual assent) to exchange promises, performances, or promise for performance. Bargain simply means agreement.

Magical Language:
Under the broad concept of legal detriment, Buster's act of walking to the car is a detriment: He gave up his legal right to remain where he was and undertook the perambulation across the parking lot. The conclusion is based, not on a probing AL's innermost thoughts but on the apparent purpose of his request, based on our understanding of human motivation.

//STOPPED AT P.162 -- NEED TO READ UNTIL P.200 TO FINISH CONSIDERATION CHAPTER\\ Follow up by doing CONSIDERATION cali lessons tonight.

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