Formation Basics
What is a Promise?
(things which could be
inbetwen?)
A manifestation of intention to act or refrain from
acting in a pseciied way, so made as to justify a
promisee in understanding that a commitment has
been made
If a joke? Depends on if one of
the parties could be justified in
it being serious based on past
dealings.
But remember PepsiCo
What is NOT a Promise?
These are NOT:
-> Mere statement of present intent
-> Predictions
-> Opinions
-> Agreements to agree
Bilateral K
There is a preference to read contracts as
bilateral.
- Both sides make promises for future action
- Cannot be revoked after acceptance w/o
breach
Unliateral K
- Offeror makes offer to exchange a promise of
future performance w/ the ACTUAL performance of
the offeree being the only valid means of
acceptance.
- Offeror cannot revoke after substantial
performance (modern rule)
n3. p71; courts are now using
unilateral contract as a basis to
enforce liability on offeror when no
promissory acceptance was invited
or required.
Formation
Basic Common Law
¶ 1 Offer & Acceptance
a) Identify and describe the negotiations.
b) Identify and describe the essential terms (price, materials,
payment).
c) Is there an offer? (does it inivte assent)
d) Is there an acceptance? (is assent given)
Must be communicated to be accepted unless there is a
mailbox involved (& must be "unequivocal and unqualified"
1) Is there a K?
UCC Contract Formation
1) Prelim reqs.
2) Std.
Acceptance
2a) Qualified
acceptance/
Battle of the
Forms
Predominate Purpose Test
a) Under Princess Cruises via Coakley, three
steps
1) Look at language of the K
2) The nature of the business of the supplier
3) The intrinsic worth of the materials
b) Under Jannusch, just look at the "thrust" of the
agreement to see if it is more than 50% for goods
or for services
Acceptance
a) Can be in any manner sufficient to show agreement. 2-204(1)
Can be silent if such was a practice of the parties in the past
b) The any manner any medium provision can be contracted out
of per 2-206(1) but must be "unambiguously indicated in terms"
c) Need not determine a precise time
d)
Battle of the Forms UCC 2-207
a) Are both parties merchants? If no, terms excluded.
b)There are three rules prevent inclusion of extra terms.(2)
(a) the offer expressly limits acceptance to the terms of
the offer;
(b) they materially alter it (means will cause other party
surprise or undue hardship per cmt 4)
(c) other party has already notified of objection or is
given w/n a reasonable time
(Remember you have a parallel framework for this sucker.)
¶ 2 Consideration
a) Was there a benefit & a detriment (Hamer v. Sidway)?
b) Was this a bargained for exchange?
c) Note both parties exchanged material, non-sham
promises.
Is there an offer?
a) UCC does not define offer, common law definition applies.
1-103(b) "An offer is made when the offer leads the offeree to
reasonably believe than an offer has been made."
b) Only 'true' essential term is quantity. Identify the relevant
terms.
c) Essential terms missing does not invalidate K, only a
"reasonably certain basis" for determining them is necessary.
2-204(3)
d) Under Brown Machine & E.C. Styberg - "A purchase order
is an offer, NOT the quotation from the seller which set the
price."
3) Consideration
Common law rules
govern.
Give some theory bout it
- This is a rejection of the mirror image/ last shot
rule
- This is intended to allow for Ks even when there
is different BOILERPLATE language.
- Not all post-agreement communications are
included terms under this; only the ones which
would reasonably appear to be new terms.
- Merchants are assumed to be sophisticated
parties and so play by different rules