“A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.” II. IS THERE A DEAL? DETERMINING MUTUAL ASSENT A. Objective Theory of Mutual Assent: A party’s intention will be held to be what a reasonable person (obj) in the position of the other party (sub) would conclude the outward communication to mean. B. Lucy v. Zehmer (p. 40) 2 men drinking at a bar make a deal for land, one was joking 1. Lucy understood it to be a deal. B/c a reasonable man could not determine that it was a joke by the other party’s actions, it was a deal. 2. Objective v. Subjective i. The reasonable objective observer knowing all of the facts ii. Subjective intent to be bound is not required 3. If both persons thought it was a joke, there would be no contract 4. RST § 17. Requirement of a Bargain i. “[F]ormation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.” C. Leonard v. Pepsico (p. 51) Harrier jet for Pepsi points 1. A reasonable person (not Π) would find that Pepsi was outwardly communicating that the commercial was a joke. 2. Commercials are generally not offers. D. Smith v. Boyd (p. 59) Sale of house. Π and other party’s offers received at same time. Δ accepted other party’s offer. 1. In determining whether a party’s objective intent was to be bound before or upon execution of the written contract, one must consider the following factors: i. The practice of the trade or profession ii. The prior practice between parties iii. Whether the written contract was to be drawn up by persons other than the parties iv. Statements made during negotiations v. Whether a party states that he or she does not intend to be bound contractually 2. Should be able to negotiate w/o fear they will be bound by mere discussions 3. Where parties understand an agreement will be in writing, parties need to determine when they are bound 4. In this case, the totality of the circumstances showed that the agreements were preliminary negotiations. 5. RST § 27. Existence of Contract Where Written Memorial Is Contemplated i. Manifestations of assent that are in themselves sufficient to conclude a contract will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show that the agreements are preliminary negotiations. III. THE OFFER A. RST § 22. Mode of Assent: Offer and Acceptance

Methods of Termination of the Power of Acceptance 1. RST § 36. A reasonable person would know that it is just an invitation to make an offer 3. then Π accepted. (p. Must look at what seller actually says and what he meant i. Context is important E. rejection or counter offer by the offeree. 4. Π replied stating “for immediate acceptance. 3. The quote came in a direct response to an inquiry F. Δ had power of acceptance. First Served” 1. 3. Great Minneapolis Surplus Store (p. 1. A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent. RST § 24. D. A manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined. An offeree’s power of acceptance may be terminated by i. 2.1. Preliminary Negotiations 1. Held ads were offers because they were “clear. DESTROYING THE OFFER A. A reasonable person would know that an ad is not an offer. Ads are usually “notices and solicitations” for offers which create no power of acceptance. B. 1. 2. not Π G. 79) Δ placed ads offering fur coats “First Come. An offer is distinguishable from: C. An offer is the 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 2. Lonergan v. and left nothing open for negotiation” IV. Grunden-Martin Woodenware Co. There is no enforceable contract until Δ accepted order form 5. Δ’s letters indicated that Π needed to “hurry and make an offer” 2. definite. 71) Δ requested quote. RST § 26. Leonard v. Offer Defined 1. It is an offer because it includes the term “immediate acceptance” (words of commitment) 2. Π and Δ corresponded by mail. Price quotes are usually not an offer in the absence of additional compelling offers. 76) Revisited 1. Δ sold to a 3rd party. 67) Δ placed ad in paper to sell land. Pepsico (p. Π could not fill.” Δ accepts and enters order. Lefkowitz v. or . Π tried to claim a jet based on a commercial that suggested he could get it for 7 million Pepsi points. Scolnick (p. The manifestation of mutual assent to an exchange ordinarily takes the form of an offer or proposal by one party followed by an acceptance by the other party or parties. Fairmount Glass Works v.

unless the offeror has manifested a contrary intention of the offeree. i. After a certain time. no deal iii. A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substitutes bargain differing from that proposed by the original offer. An offeree’s power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract. An offeree’s power of acceptance is terminated when the offeree or offeror dies or is deprived of legal capacity to enter into the proposed contract. An offeree’s power of acceptance is terminated by his making of a counteroffer. Contracts are not terminated by death. there will no longer be an offer. Death or Incapacity of Offeror or Offeree 1.B. 1 day was too long to have waited because of the industry and fluctuations in commodity prices. Lapse of Time 1. unless the offeror has manifested a contrary intention. Minnesota Linseed Oil Co. an offeree’s power of acceptance is terminated by the nonoccurrence of any condition of acceptance under the terms of the offer. or iv. an offer sent by mail is seasonably accepted if an acceptance is mailed at any time before midnight on the day in which the offer is received. 2. New Headley Tobacco Warehouse Co. If offeror dies before acceptance. G. Collier White Lead Co. Gentry’s Ex’r (p. (p. 4. or iii. death or incapacity of the offeror or offeree. Counter-Offers 1. 2. v. at the end of a reasonable time. RST § 38. Rejection 1. Revocation by Communication From Offeror Received by Offeree (Direct Revocation) 1. v. Unless otherwise indicated by the language or the circumstances. and subject to the rule stated in § 49. D. In addition. E. RST § 43. 82) Π agreed to sell oil. 2. depending on all the circumstances existing when the offer and attempted acceptance are made. RST § 48. ii. 2. ii. F. revocation by the offeror. No notice required (exception to objective theory of mutual assent [reasonable person would not know of death without notice]) RST § 42. C. if no time is specified. lapse of time. An offeree’s power of acceptance is terminated at the time specified in the offer. Indirect Communication of Revocation . there was a time lapse between offer and acceptance. RST § 41. 86) Lease extension i. 2. An offeree’s power of acceptance is terminated by his rejection of the offer. 3. A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement. but offers are ii. What is a reasonable time is a question of fact. or. In this case. RST § 39. Offers have expiration dates.

When the consideration allegedly supporting an option fails or is nonexistent. 2. . which can be withdrawn by the optionor at any time before acceptance…” ii.1. 99) 2nd option contract not supported by consideration. i. is in writing and signed by the offeror. Board of Control of Eastern Michigan University v. Beall (p. 103) option to purchase Δ’s home. RST § 87. C. Without consideration. indirect revocation i. Unless otherwise indicated by the language or the circumstances. during the time stated or if no time is stated for a reasonable time. and proposes an exchange on fair terms within a reasonable time. So. it is too late for him to accept the offer. Dodds (p. Π heard that Δ had sold. Once the offeree knows or hears from a reliable messenger that the property has been sold to someone else. PRESERVING THE OFFER / MAKING OFFERS IRREVOCABLE A. for lack of consideration. 2. RST § 30 (2). ii. An option contract is a promise which meets the requirements for the formation of a contract and limits the promisor’s power to revoke an offer. an offer invites acceptance in any manner and by any medium reasonable in the circumstances. An offer is binding as an option contract if it i. for merchants. no need for consideration to preserve offer. V. Burgess (p. i. Beall v. offeror may revoke offer any time before deadline. but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror. recites a purported consideration for the making of the offer. 2. An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable. Option Contract 1. but in no event may such period of irrevocability exceed three months. Remanded to determine if offer was revoked prior to acceptance. is made irrevocable by statute. Form of Acceptance Invited 1. Firm Offers 1. the option is no longer irrevocable but rather it becomes “a mere offer to sell. Remanded to determine if offer was revoked prior to acceptance. 3. An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice. A written acknowledgement of receipt of consideration creates a rebuttable presumption that consideration has passed. MANNER OF ACCEPTANCE A. Dickinson v. 93) Δ offered to leave open contract to sell land until Friday. VI. RST § 25. An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect. B. Option Contracts 1. 2. UCC § 2-205. or ii. Π tried to purchase. ii.

Acceptance of Offer Defined. Π arrived to commence work where another crew was already doing the work. as the offeree chooses. Effect of Part Performance Without Knowledge of Offer 1. or manner of acceptance. i. Who May Accept an Offer 1. Unless the offeror manifests a contrary intention. v. RST § 32. Δ breached contract. i. Where an offer specifies time. VII. Therefore. An offer can be accepted only by a person whom it invites to furnish the consideration E. Davis v. In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance. PROMISSORY ACCEPTANCE AND THE MAILBOX RULE A. Unilateral offer: offeror bargains for a specific act by the offeree ii. 2. Acceptance by Performance. Jacoby (p. when the trucks were loaded 3. Case decided before RST(2d) § 32. Green (p. thus presumption that offer invites bilateral contract. Δ never attempted to notify Π of their intention to terminate the offer 2. notice of acceptance is always essential. Here.B. Ever-Tite Roofing Corp. Elderly man wanted Π to come from Canada. 2. . Behee revoked offer. When an offer calls for a promise (bilateral). the acceptance has to comply exactly with what the offer requires. Behee (p. 3. acceptance before revocation i. 126) Before Behee was notified that Smith’s accepted offer. RST § 52. Acceptance by a promise requires that the offeree complete every act essential to the making of the promise. 2. place. 110) Execution by bank’s trustee 1. An offeror has complete control over an offer and may condition acceptance to the terms of the offer. 1. C. 118) Sick family in CA. Here. An uncommunicated intention to accept an offer is not an acceptance. Vega (p. Hendricks v. Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise. D. 1. 2. offer to enter into a bilateral contract iv. The contract was accepted by Π by the commencement of the performance of the work contracted to be done. Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer. Bilateral offer: offeror bargains for a return promise iii. La Salle National Bank v. Invitation of Promise of Performance 1. G. RST § 51. F. RST § 50. 112) Π contracted with Δ to work on Δ’s roof. Acceptance by Promise 1. an offeree who learns of an offer after he has rendered part of the performance requested by the offer may accept by completing the requested performance. Therefore. then would leave inheritance to Π for coming to take care.

or ii. . Offeror shows by his language/actions that he doesn’t expect notice of performance iv. but was lost. Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance. Lindsell (p. or iii. 129) An acceptance of an offer to buy wool was sent through the mail. the offeror learns of the performance within a reasonable time. by mail) is operative and completes the manifestation of mutual assent as soon as put out of the offeree’s possession. ii. If an offeree who accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty. Necessity of Notification to Offeror i. Reward offered to anyone who contracts epidemic within a reasonable time after having used the smoke ball. ACCEPTANCE BY PERFORMANCE OR SILENCE A. Carbolic Smoke Ball Co. i. Option Contract Created by Part Performance or Tender i. Where an offer invites an offeree to accept by rendering a performance. without regard to whether it ever reaches the offeror. Carlill v. Partial Performance 1. 4. the offer indicates that notification of acceptance is not required. RST § 45. 2. the offeree exercises reasonable diligence to notify the offeror of acceptance. RST § 54. Not “mere puffery” ii. Communication of acceptance of a contract to an agent of the offeree is not sufficient and does not bind the offeror. 1) an acceptance made in a manner and by a medium invited by an offer (here. Full Performance 1. B. Offeree’s purchase and use of smoke ball was sufficient consideration. 135) Ad was express promise to pay for performance. Mailbox Rule 1. the contractual duty of the offeror is discharged unless i. Time When Acceptance Takes Effect i.3. (p. an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it. RST § 50 (3). Performance is acceptance iii. Adams v. i. Revocation is not effective until received VIII. Mailbox Rule is 2nd exception to Objective Theory of Mutual Assent 3. supra B. 2. Exception: RST § 63. Unless the offer provides otherwise. no notification is necessary to make such an acceptance effective unless the offer requests such a notification. Acceptance by Performance. v. but 2) an acceptance under an option contract is not operative until received by the offeror. ii. Acceptance is effective when received by the offeror.

Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy. UCC § 2-204. Where an offeree fails to reply to an offer. Formation in General 1. An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined. B. 2. A contract for sale of goods may be made in any manner sufficient to show agreement. Conditional on offeree’s full performance C. 147) Attorney informed client his fees would be $12. and the offeree in remaining silent and inactive intends to accept the offer. Marchiondo v. RST § 69(1)(a) IX. Acceptance by Silence i. 2. 2. Gordon (p. acquired buyer ii. ii. iii. it is reasonable that the offeree should notify the offeror if he does not intend to accept.. iii.500.e.ii. including conduct by both parties which recognizes the existence of such a contract. or the offeree is under a duty to reply. ii. i. Silence 1. Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation. Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction. settlement 3 months later in TX. CONTRACT FORMATION UNDER THE UCC A. Generally. Offer and Acceptance in Formation of Contract 1. i. Unless otherwise unambiguously indicated by the language or circumstances i. UCC § 2-206. client stated $12. Broker had already partially performed sale.500 was beyond reason. an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances. RST § 69. Bank’s silence amounted to conduct which misled attorney to his detriment. . Scheck (p. his silence and inaction operate as an acceptance in the following cases only: i. 142) Revoked offer for performance on sixth day i. The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer. Where because of previous dealings or otherwise. Part performance by offeree of an offer of a unilateral contract = option contract iii. 3. attorney directed to drop suit in NY. Laredo National Bank v. the offeree’s silence will be regarded as acceptance. If relation between parties is such that offeror is justified in expecting a reply. silence is not to be construed as acceptance. iv.

C. together with any supplementary terms incorporated under any other provisions of this Act. If yes. Additional Terms in Acceptance or Confirmation. or iii.). rather. Between merchants such terms become part of the contract unless: i. an order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or nonconforming goods. The additional terms are to be construed as proposals for addition to the contract. Notice of objection iii. it is not enough that an acceptance is expressly conditional on additional or different terms. OR iii. ii. notification of objection to them has already been given or is given within a reasonable time after notice of them is received. such terms become part of contract unless: (opposite of last shot rule) i. 3. 2. which parties actually agree (price. Unless acceptance is conditional on assent to different terms (counter-offer) ii. 2. date. 160) Arbitration clause in acceptance form 1. section 2 . Between merchants. **Don’t automatically jump to section 3. (p. In order to fall within the 2-207(1) proviso. unless acceptance is expressly made conditional on assent to the additional or different terms. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree. Materially alters it. Offer limits acceptance to terms of offer. (Knockout clause) i. How to use UCC §2-207 i. 3. Section 3 – Terms of contract consist of these terms. Section 1 – You can accept an offer without accepting all the terms. an acceptance must be expressly conditional on the offeror’s assent to those terms. they materially alter it. **Figure out if writing is a contract**: i. Dorton v. Battle of the Forms 1. iv. Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. but such a shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer. UCC § 2-207. Must be clear that offeree is unwilling to proceed with the transaction without offeror’s consent to additional or different terms. Section 2 – (Only with acceptance) Additional terms are to be construed as proposals for addition to the contract. Collins & Aikman Corp. ii. A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon. D. the offer expressly limits acceptance to the terms of the offer.ii. etc.

Certainty 1. 3. 188) Δ promised Π(architect) that if he continued to work. Nothing in UCC § 2-207 precludes its application in a case involving only one form. and the other has reason to know the meaning attached by the first party. The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy. Silence or mere failure to object is not express agreement to additional terms X. section 3 E. (p. (rejects reasoning in Hill v. AND INDEFINITE TERMS A. Δ would cut him a fair share of the profits. as in typical consumer transactions. or ii. RST § 33. POSTPONED AGREEMENT (AGREEMENT TO AGREE) . 169) Arbitration clause in Standard Terms in computer box stated terms would be accepted after 5 days. There is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and i. neither party knows or has reason to know the meaning attached by the other. If either party is not a merchant. that party has no reason to know of any different meaning attached by the other. it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain. Ditmars (p.ii. 2. that party does not know of any different meaning attached by the other. the purchaser is the offeror. 2. 2. Δ fired Π. or ii. there is no mutual assent and therefore no contract is fomed C. MISUNDERSTOOD. D. 2. When both parties misunderstand the terms of the contract. Impossible to determine what a “fair share of the profits” is. The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance. Effect of Misunderstanding 1. Gateway 3. 1. B. Raffles v. 1. Quantum meruit – the reasonable value of services XI. If no. and the other knows the meaning attached by the first party. INCOMPLETE. 3. RST § 20. Varney v. Even if all the elements are present to form a contract. each party knows or each party has reason to know the meaning attached by the other. additional terms are proposals for addition to the contract that do not become part of the contract unless the original offeror expressly agrees 4. The manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if i. Here. Wichelhaus (p. 184) Two ships named Peerless 1. Gateway. Klocek v. Inc. the terms may be so indefinite that it cannot be enforced. Even though a manifestation of intention is intended to be understood as an offer.

3. 239) Consideration present. an act other than a promise. Sidway (p. Univ. Provision for renewal must be certain in order to render it binding and enforceable 3. Walker v. The consideration induces the making of the promise and the promise induces the furnishing of the consideration. The walk is a mere condition to receive a gift. etc. or ii. a performance or a return promise must be bargained for. the agreement is unenforceable XII. forborne. Δ told Π(sister-in-law) to “quit” her house and come live on his land since her husband had died. of North Dakota and The North Dakota Assoc. 1.A. Types of Exchange 1. Her travelling was just a condition to receive the gift. modification. Parties could not agree on rent.” 3. Williston’s tramp hypo (p. 1. RST § 71. smoking. D. To constitute consideration. Inc. and gambling until he reached 21. or destruction of a legal relation. Π signed Δ’s release form. Requirement of Exchange. 3. Keith (p. The walk around the corner was not bargained for by the benevolent man. 1. Uncle’s promise induced nephew to forbear his legal right to drink. Condition of a gratuitous promise E. wants to sue. Π asserts release is not supported by consideration 2. 4. “It is enough that something is promised. 203) Lease renewal option stated rent would be determined on date of renewal. Comment b. Terms of a renewal may be left open for future determination by a prescribed method. C. 4. B. or iii. Reed v. The provision is ambiguous and indefinite 2. Kirksey (p. It may be given by the promisee or by some other person. Unilateral contract 2. Without some sort of prescribed method for determining terms. done. Kirksey v. Uncle promised $5000 to nephew for abstaining from drinking. 246) Consideration present. CONSIDERATION AS AN ELEMENT OF CONTRACTUAL OBLIGATION A. died. (p. The performance may consist of i. 2. The performance or return promise may be given to the promisor or to some other person. a forbearance. Δ was not bargaining for her presence. 4. Π’s surrender of a legal right in exchange for NDAD allowing him to run the race constitutes sufficient consideration for the release. A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. 5. just a gratuitous gift 2. 244) Go around corner and I’ll buy you a coat. 241) No consideration. For The Disabled. 1. or suffered by the party to whom the promise is made as consideration for the promise made to him. the creation. Hamer v. Gratuitous promise 1. 2. Benefit to promisor is indicative of consideration but not required .

Past consideration CONTRACT MODIFICATION AND CONSIDERATION RST § 73. B. and none other. Lingenfelder v. Nudum Pactum – Naked Promise 4. 265) Classic “Hold-Up Game” fishermen refused to perform work under contract without pay raise. One cent i. Industry of wife i. Ways around pre-existing duty rule i. If one party tries to hold up the others and refuses to perform the contract unless otherwise renegotiated. 3. 5. ii. an unconscionable contract. A promise modifying a duty under a contract not fully performed on either side is binding i. to the extent provided by statute. 1. Consideration of one cent is merely nominal iii. or . Modification of Executory Contract 1. Instrument specified 3 distinct considerations for the promise to pay $600. Settlement of dispute/breach iii. constituted no consideration for his promise to pay Nell. No consideration because pay raise was given based on fishermen’s agreement to render the exact services. 3. need consideration for modification. RST § 89. A promise to pay a man for doing what he is already legally bound to do is without consideration. Nell (p. A. on its face. (architect) i. No pre-existing legal duty rule for sale of goods/UCC. Boss had no choice but to comply with fishermen’s demands for pay raise. if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made. Past consideration ii. fishermen were already legally bound by original contract. Performance of a legal duty owed to a promisor which is neither doubtful nor the subject of honest dispute is not consideration. then there is no consideration. C. The fact that Schnell loved his wife. that they were already under contract to render. One cent for $600 is. Alaska Packers’ Ass’n v. 1. and that she had been industrious. 2. therefore duress or coercion. Domenico (p. Dead wife(Schnell) promised $200 each to 3 people(Nell was 1).F. Unanticipated circumstances iv. Brewing Co. Performance of Legal Duty 1. Pre-existing duty rule. but a similar performance is consideration if it differs from what was required by the duty in a way which reflects more than a pretense of bargain. Consideration was nephew’s forbearance of his legal right Schnell v. 251) No consideration. 6. Wife’s love and affection i. 5. no consideration needed for modification. Something new or different ii. XIII. Not consideration 2. or ii.

if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched. You cannot bargain for something which has already occurred 4. Δ promised to pay Π’s expenses then failed to do so. CONSIDERATION SUBSTITUTES/ALTERNATIVES – PAST CONSIDERATION AND THE ROLE OF MORAL OBLIGATION Harrington v. Wyman (p. Modification 1. 278) Π saved Δ’s life and her hand was chopped by an axe in the process. iii. A promise to pay an obligation incurred by an infant 3. Contract modification due to unexpected circumstances will be enforceable without consideration 2. A promise to pay an obligation rendered discharged by insolvency iii. ii. Whatever is viewed as consideration must be induced by the promise 3. Circumstances must not be anticipated iv. A promise is not binding under Subsection (1) i. Moral consideration = no consideration 5. New contract must be fair and equitable UCC § 2-209(1). 279) Π took care of Δ’s son until he died. Past consideration = no consideration i. RST § 86(2)(i) Promisee conferred benefit as a gift . Traditional common law rule RST § 86. because of Statute of Limitations. Original contract must not be fully performed (executory not executed) iii. Angel v. Exceptions – Promise (moral obligation) + pre-existing (now unenforceable) debt i. cannot through courts enforce payment of debt. B. An agreement modifying a contract within this Article needs no consideration to be binding. Mills v. Promise for Benefit Received 1. Subsequent promise did not induce the act 2. XIV. A. 2. A promise reviving a previously legally enforceable obligation now barred by an applicable limitation period 1) Creditor.D. A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice. Mixture of Schnell and Harrington 2. Modern pre-existing duty rule i. to the extent that justice requires enforcement in view of material change of position in reliance on the promise. then that promise to repay is enforceable. Parties voluntarily agree ii. or ii. 1. Contract modifications must have 4 elements: i. Debtor has moral obligation to pay and promises to pay creditor. Taylor (p. Murray (p. 269) trash collector modified contract after unanticipated increase in workload. C. Δ orally promised to pay Π’s damages then failed to pay 1. to the extent that its value is disproportionate to the benefit. 1. E.

A charitable subscription or a marriage settlement is binding under Subsection (1) without proof that the promise induced action or forbearance. measurable in dollars and cents” 4. 1. 5. 4. ii. Unlike in Hamer.2. Funk: Moral obligation is a sufficient consideration to support an actual pecuniary or material benefit for which he subsequently expressly promised to pay. Promise inferred from conduct that payments would be accepted late. she voluntarily left job. Δ died and now his executor will not pay. Consideration is not necessary where the facts indicate that the promisor should be estopped from not performing 2. Ratification of Services Rendered v. Prob. Promise Reasonably Inducing Action or Forbearance 1. 293) Grandfather (Δ) told granddaughter (Π) he didn’t want her to work.. element of deliberation as opposed to Webb’s split second decision ii. Π quitting her job was not part of the promise. 284) Π saved his boss Δ’s life by falling with and steering a falling block out Δ’s way. Hamer was required to forbear in order to receive. 2. “Life and preservation of the body have material. Court still found equitable estoppel 5. no consideration here. Gratuitous Promise 7. How a Promise May Be Made i. Δ promised to pay him $15 every 2 weeks. The remedy granted for breach may be limited as justice requires. 6. RST § 4.i. 3. Promisor is estopped from pleading lack of consideration 3. i. B. there is element of donative intent by caregiver D. Fitzpatrick: If it is clear there is material benefit to promisor and a subsequent promise (ratification of services rendered) is equivalent to a previous request (presumption of request) 3. A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. Webb v. RST § 90. no consideration. (p. Material benefit must be to promisor who made subsequent promise (not his son. State ex rel. Boothe v. Here. Here. pecuniary values. PROMISSORY ESTOPPEL A. 1. Scothorn (p. Bayer v. court held note was a mere gratuity. Mills v. “McGowin’s express promise to pay appellant for the services rendered was an affirmance or ratification of what appellant had done raising the presumption that the services had been rendered at McGowin’s request XV.e. 298) i. Material benefit 2. Wyman) 6. McGowin (p. Ricketts v. A promise may be stated in words either oral or written or may be inferred wholly or partly from conduct. . He promised her $2000 and she quit her job in reliance on the promise. Here.

not full expectation damages as in breach of contract claim) . Orion Food Systems. 2. (p. Foreseeable Reliance iii. 1. Inc. Katz elected to retire to his detriment as a result of Dare’s promise 2. Inc. Promissory Estoppel i. (p. 1. Katz gets his money D. Katz v. Promise ii. v. Prior written warning that its promises mean nothing does not allow Orion to encourage reliance after warning is sent. 306) Franchisee applicant relied on franchisor’s conduct to his detriment in outfitting his new store to comply with franchisor’s specifications. Danny Dare. Inc. 299) Employer revoked employee (brother-in-law) pension when he began working again. Midwest Energy. Reliance in Fact (reasonable) iv. Injustice Absent Enforcement (damages are measured by the degree of reliance.C.

a contract made upon consideration of marriage (the marriage provision). it satisfies the requirements of subsection (1) against such party unless written notice of objection to its contents is given within ten days after it is received. i. RST § 110. if the party against whom enforcement is sought admits in his pleading. or ii. Classes of Contracts Covered by Statute of Frauds 1. with respect to goods for which payment has been made and accepted or which have been received and accepted (Sec. or iii. a contract that is not to be performed within one year from the making thereof (the one-year provision). Some jurisdictions apply UCC § 1-103 in order to apply RST § 139 (promissory estoppel). but the contract is not enforceable under this provision beyond the quantity of goods admitted. forbidding enforcement unless there is a written memorandum or an applicable exception. has made either a substantial beginning of their manufacture or commitments for their procurement. v. Statute of Frauds 1. some use only the exceptions in UCC § 2-201. The following classes of contracts are subject to a statute. A contract which does not satisfy the requirements of subsection (1) but which is valid in other respects is enforceable i. ii. a contract to answer for the duty of another (the suretyship provision). if the goods are to be specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the seller’s business and the seller. Between merchants if within a reasonable time a writing in confirmation of the contract and sufficient against the sender is received and the party receiving it has reason to know its contents. [confirmatory objection exception]) 3. Δ cannot raise statute of frauds defense. notice of objection is valid when sent. iii. 2. UCC § 2-201.XVI. Except as otherwise provided in this section a contract for the sale of goods for the price of $500 or more is not enforceable by way of action or defense unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought or by his authorized agent or broker. 2-606). Formal Requirements. STATUTE OF FRAUDS A. testimony or otherwise in court that a contract for sale was made. B. . before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer. iv. commonly called the Statute of Frauds. A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing. not objected to by Δ. a contract of an executor or administrator to answer for a duty of his decedent (the executor-administrator provision). a contract for the sale of an interest in land (the land contract provision). 4. (Confirmation sent by Π.

general terms and conditions. Variation of dollar amount does not render the letter’s expression of the consideration insufficient. DF wants an opportunity to make Brown perjure herself 3. Brown denied the existence of a contract. 4. Issue: Whether letter written by Δ offering the land to Π is a memorandum sufficient to satisfy the requirements of the statute 3. states with reasonable certainty the essential terms of the unperformed promises in the contract. especially since Π paid more under admitted agreement than he would have paid according to the letter. Common Law: not barred from asserting SoF if an oral contract is admitted. which i. Brenon (p. to authenticate the writing as that of the signer.L. The signature to a memorandum may be any symbol made or adopted with an intention. DF Activities wanted to assert exception in UCC § 2-201(3)(b) i. Radke v. lands involved. 7. signed by or on behalf of the party to be charged. Once Δ has denied the contract under oath (affidavit). ii. actual or apparent. D. Unless additional requirements are prescribed by the particular statute. DF Activities Corp. RST § 134. General Requisites of a Memorandum 1. and iii. but DF asserts that Brown may admit if deposed in the future. Brown (p. but that admission can be used against the party asserting SoF. ii. a contract within the Statute of Frauds is enforceable if it is evidenced by any writing. UETA and Federal E-Sign Act: both indicate that electronic signatures are sufficient signatures G. Contract is enforceable and Brenon must sell land to Radke 6.C. E. Δ admitted that Π accepted offer orally.” 8. F. “We will overlook technical requirements only if proof of the oral contract is clear and uncontradicted as in this case where Δ admitted that a contract had been made. Signature 1. v. Court added requirements to the Staute of Frauds: parties.Wright chair 1. the safety valve of section 2-201(3)(b) is closed 4. RST § 131. 341) Brenon’s sale of pieces of land to connect to lake 1. 347) Domino’s owner wanted to buy F. would be contract but Statute of Frauds would make it unenforceable if not in writing 2. is sufficient to indicate that a contract with respect thereto has been made between the parties or offered by the signer to the other party. If Brown was merchant. UCC § 2-201(2) would have been in effect i. Testimony made clear that Brenon’s typewritten name was typed with the intent that it be tantamount to a written signature = sufficient subscription 5. She did not send notice of objection . reasonably identifies the subject matter of the contract. Motion to dismiss granted for Brown based on Statute of Frauds 2.

McIntosh v. A misrepresentation becomes material when it becomes likely to affect the conduct of a reasonable man with reference to a transaction with another person EXAM RST § 45 Predominance test on whether deal concerns goods or services RST § 91. RST § 139. Seller said no every time 2.H. In determining whether injustice can be avoided only by enforcement of the promise. the extent to which the action or forbearance was foreseeable by the promisor. the following circumstances are significant: i. or the making and terms are otherwise established by clear and convincing evidence. the extent to which the action or forbearance corroborates evidence of the making and terms of the promise. XVII. Contract still enforceable due to Π’s reliance even though it fell within Statute of Frauds one-year provision 3. the requirement of writing has a cautionary effect which causes reflection by the parties on the importance of the agreement iii. The remedy granted for breach is to be limited as justice requires. the availability and adequacy of other remedies. Rosenthal (p. particularly cancellation and restitution. lessening the danger of perjured testimony (the original rationale) ii. Halpert v. the writing is an easy way to distinguish enforceable contracts from those which are not. Enforcement by Virtue of Action in Reliance 1. 352) Car salesman(Δ) in Hawaii offered job to CA man(Π) who moved to Hawaii to fulfill one-year employment contract. 2. thus channeling certain transactions into written form. the definite and substantial character of the action or forbearance in relation to the remedy sought. 2. the reasonableness of the action or forbearance. apply both though . iv. A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement of the promise. 1. generally accepted. v. Functions of Statute of Frauds i. 363) Termites 1. ii. he was fired two months later. iii. Buyer asked on three different occasions if there were termites. evidentiary function. Court applied RST § 139 (promissory estoppel despite SoF) I. Innocent misrepresentation of a material fact that induces another to act is actionable 3. MISREPRESENTATION A. Murphy (p.

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