Contracts

• An offer is a 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.
• 1) Manifestation of willingness to enter into a bargain
• 2) Specify how/what to be exchanged for offer upon acceptance: Quantity, price, time of delivery.
• 3) Directed at a particular offeree
• 4) Invites acceptance by conferring power upon another to create contractual relations between them (by accepting).

• UNDERSTANDING
• 1. A person can be found liable - to have contracted - even though he didn’t intend to contract, even though there’s no meeting of the minds. Of course, IF there were a meeting of the minds (and it could be proved), then there is a contract.
• 2. A party’s intentions are determined by outward expression/manifestation (as opposed to actual, subjective intent). Undisclosed or secret intentions are irrelevant.
• 3. Assent is NOT interpreted in light of what the utterer actually meant, but from the perspective of a REASONABLE PERSON IN THE POSITION OF THE PARTY TO WHOM THE MANIFESTATION WAS MADE in the context of the situation.

• CASE
• Lucy v. Zehmer - The offeree must have an honest and reasonable belief in the offer. The mental assent of the parties is not required for the formation of a contract. If the words or actions of one of the parties have but one reasonable meaning, the intentions don’t matter

• AD
• Unless otherwise specified where the offer is clear, definite, and explicit, leaving nothing for negotiation, an ad of goods on website, catalog, etc. is a solicitation for offers from the public, and does not create a binding K upon acceptance of prospective buyer.

• REWARD
• Rewards are advertisement but are offer as unilateral K and create a power of acceptance upon complete performance.

• 25
• A promise which meets the requirements for the formation of a K and limits promisor’s power to revoke an offer.

• 45
• In a unilateral K, tender/beginning of performance creates a binding option K.

• 87(2) Drennan
• An offer which offeror should reasonably expect to induce action or forbearance of a substantial character on part of the offeree before acceptance and which does induce such action is binding as an option contract to the extent necessary to avoid injustice.

• 2-205 Firm Offer
• 1. Offeror must be merchant.
• 2. Offer applied only to buy/sale of goods (not land).
• 3. No consideration required.
• 4. Gives assurance that offer will be held open for a specified amt of time or reasonable amount of time (can be no longer than 3 mo.). Any term of assurance must be made in writing and signed by offeror.

• 2-206(b)
• An offer to buy goods for prompt shipment shall be construed as inviting A by either prompt promise or shipment of conforming or nonconforming goods. However, non-conforming goods is not Acceptance if buyer notifies shipment w accommodation letter.
• 1) Non-conforming shipment operates as acceptance and breach at same time.
• 2) Non-conforming shipment with accommodation letter is a Counter-Offer not an Acceptance (and no breach).

(1) The acceptance that purports to be an acceptance is an acceptance even though it states new or different terms. UNLESS, the acceptance is made expressly conditional upon the additional or different terms. (if it does, move to §2-207(3), if not move to §2-207(2))

• (2) O – A + add’l terms
• If the terms are additional:then the terms are proposals, which require additional acceptance. UNLESS between merchants then;
• (a) The original offeror objects ahead of time.
• (b) If they materially alter = any major change, surprise or hardship on one of the parties.
• (c) The offeror objects immediately.

• (2) O – A + diff terms
• Then the courts need to choose one of three ways to handle it.
• 1) Conflicting terms get dropped and UCC gap fillers move in. (2-207(3))
• 2) Original offeree’s discrepant terms drop out and the offeror’s become part of the contract.
• 3) Equates different w additional and the discrepant terms, if they materially alter the contract, become proposals to be accepted. (2-207(2)(b))
• • Immaterial if it only slightly enlarges upon the seller’s exemption due to intervening causes beyond its control.
• • A contract would be formed under 2-207(1), but excludes the material terms.

• (3) O-CO-Per
• If the terms dictate express acceptance, where none is given yet the parties’ conduct = K then §2-207(3) drops terms and fills then in with gap filler from UCC. (Basically creates contract)
• Terms that both parties agree
• Gap Filler terms in the UCC defaults to supplement the K
• Conflicting terms fall out

• 1)Transfer of Land.
• 2)Contracts cannot be completed within 1 year.
• 3)Contracts upon consideration of marriage.
• 4)Suretyship (must have consideration) -- K to answer for another’s debt; if main purpose is direct economic benefit to self, then SoF N/A & oral K is enforceable.
• 5)Sale of goods over $500.
• 6)Executor of estate to pay debt of estate