K's Test Outline
E. Farnsworth & W. Young, Cases And Materials on Contracts 3rd Ed.
K's Test Outline
The Formation Phase
Theories of Mutual Assent (Validity)
1) Subj. Theory--Meeting of the Minds
2) Obj. Theory--Manifestation of intent by rsbl person's view
3) Shift b/c of econ. dev.
4) Model
1. Face 2 face of offer & acceptance
2. Correspondence 4 small 2 med. trxn
3. Big Co's
4. Only tentative guide
Offer
1) Tentative Working Guide: A definite conditional
promise manifesting present intent 2 enter into binding final agreement
2) Present Intent
1. Need 2 find an offer
2. Offeree has pwr & offeror has liability
3) Conditional Promise
1. Bilateral K--promise is cond.
2. Unilateral K--perf. is cond.
4) Binding Agreement
1. Interpretative Intention--Look @ context (busi/family)
4 rsblness of enforcement
2. Gentlemen's Agreement
5) Final Agreement--5 relev. factors but no rules
a) Wording (quote v. offer)
(1) Other parts of the same writing
(2) Other writings
(3) Custom of ind.
b) Surrounding Circ's
c) Definiteness of Proposal
(1) Split in C/L auth. of real estate valuation
d) Size of the group of addressees (larger, less final)
(1) Gen'ly ad isn't an offer
e) Contemplation of the subseq. execution of a formal writing
(1) Writing may B convenient memorial
(2) Writing may B a cond. 2 finalize the K
6) Definite--4 Ct. 2 frame a leg. remedy, need 2 det. if parties
gave enough terms
(1) C/L--rsbly definite in material terms
1. Material Terms--terms of payment, subj. matter
of K, quantity & quality, price, & terms of delivery
2. Undesirable 4 comp. definiteness so fill in
when possible
3. Won't fill in quantity, fatally indefinite clause,
& personal services
4. Use of expert testimony & trade custom 2 fill in
(2) UCC--specif. provisions resolving splits of
auth.
1. Fill in gap 4 price, delivery of goods (place &
X), & X of payment
2. General relaxation of stand of definiteness by :2-
204(3)--vrsbly certain basis 4 giving an
app. remedyv
3. Only need intent 4 K 4 UCC 2 kick in
Termination of Offer
1) Supervening death / legal incapacity of the offeror
1. Subj. Theory of no meeting of minds
2. Don't need notice 2 offeree
2) Supervening death / legal incapacity of the offeree
1. Don't need notice 2 offeror (subj. theory again)
2. Less injustice here
3) Death / destruction of an essential person / obj.
4) Lapse of an offer
1. Face 2 face, phone--terminates after the conv. unless specify
2. Correspondence
(1) After rsbl X depFing on mktFs stability
(2) Specific means of communication
(3) Mail Box Rule--resolve after offeree receives
4 days after even if delay b/c offeror created the ambiguity
5) Revocation
(1) Direct Revocation
1. Offer revoked as long as inconsistent behav.
by offeror
2. General offer in ad must B revoked by communicating
by the same means & same extent of pub.
3. Tougher 2 surr. freedom but ez 2 gain back
(2) Indirect Revocation
1. Recog. this doc. under obj. theory b/c subj.
honest & obj. rsblness is gone if offeror does something else
so no remedy
2. Communicate 2 offeree
3. Communication has 2 B true
4. Source must B reliable
5. Substance of the communication must convey that
rsbl expectation of the future perf. is destroyed
(3) Limitations on pwr 2 revoke
1. Option K--2nd unilateral K
2. Formal K (ex. under seal)--prom.
substituted consideration
3. Statutory substitute 4 seal UCC :2-205
(1) Must B made by a merchant
(2) Signed in writing
(3) Terms in doc. give assurance that the
offer will B open 4 a rsbl X, not 2 exceed 3 mo's
4. Part Perf.
(1) Operation of Law 2 protect reliance int.
of the offeree
(2) Option K created in unilateral K
when offeree tenders/begins the perf. / beg. 2 tender
(3) Exercise the option of it by complFing offer
/ tendering
(4) Can't tender 4 extensive per. of X
5. Promissory Estoppel
(1) D made a prom.
(2) At the X of prom., foresee P would rely
(3) P relied
(4) Reliance was definite &
subst. (D position)
(5) Obj'ly rsbl
(6) Charitable subscription started this
(7) Split of auth. in mkt
application Hand v. Traynor
6) Rejection by Offeree
1. Straight outward rej.
2. Counteroffer--terminates automatically w/new offer on table
3. Qualified Acceptance--like counteroffer
4. IN ALL 3 CASES, OFFEROR CAN INSULATE OR
OFFEREE CAN KEEP THE OFFER UNDER ADVISEMENT
5. Three utterances that keeps the offer alive--inquiry, request,
grumbling acceptance
7) Supervening Illegality
Acceptance
1) Tentative Working Guide: Eligible offeree w/both
knowledge of the offer & intent 2 accept gives the requested return unconditionally
2) Eligible offeree
1. Restricted by the offeror in the offer
2. Except when option K, offeree can sell
3) Knowledge of the existence of the offer
1. Subj. theory
2. If gains knowledge during the series of act, o.k.
3. Cross offers R'nt acceptance b/c no meeting of minds
4) Intent 2 Accept
1. Bilateral K--manifest obj'ly b/c prom. ambiguous
2. Unilateral K--perf. is inherently ambiguous
3. Intent doesn't need 2 B primary motive
4. Silence not acceptance UNLESS
(1) After implicit understanding from prior dealings
(2) After soliciting the offer (duty 2
speak up)
(3) After receipt of goods (UCC says if use 4
rsbl X, accept)
(4) After acceptance of services / exercise of
dominion over goods (intent & crime)
5) Gives the Requested Return
(1) Methods
1. Bilateral--prom.
2. Unilateral--act
3. Option 4 any rsbl means (UCC :2-206) / specified
(2) Legal Status
1. Required--dispatch
2. Suggested--dispatch
3. Rsbl--dispatch--UCC as same, quicker, / rsbl
commercially
4. Unrsbl--receipt
(3) Communication of Acceptance
1. Bilateral--communicate unless offeror waives
2. Unilateral--no communicate, unless
knowledge not in rsbl X get 2 offeror, unless character of trxn says
otherwise
3. Mail Box Rule--proper dispatch for
accept is dispatch
4. MBR--4 rej. it's receipt
5. MBR improper dispatch by C/L--receipt but UCC
dispatch
(4) Legally/Physically Overtaking Rej.
1. Fairness estoppel applied if offeror
changed position
6) Unconditionally
(1) C/L
1. No real dif. if gap fillers & custom of ind.
apply
2. Mirror Image/Perfect Match 4 subst. / proced. dif.
3. Battle of the Forms--escape hatch & last
shot (accept by perf.)
(2) UCC :2-207
1. Sub 1 closes escape hatch by whether K/not
(acceptance/confirmation) , throws out mirror
image rule, preserve option of counteroffer by texpressly
made cond. on assent 2 add./dif. termsv
2. Sub 2 gets rid of last shot by adding the
additional terms unless offeror limits, obj's, / material by
merchants
3. Knock out doc. 4 dif. terms better
4. Explicit A v. Non A--dif; Implied A v.
Non A--add
5. Sub 3 forms K by perf. & terms by agree &
knock out where disagree
6. If counteroffer--follow up & get real assent
(3) C/L is still default