I.
II.
Scope
a. UCC: sale of tangible goods; not services, sale of land, employment Ks, money or securities
i.
Merchant: person who deals in goods of kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to practices
or goods involved in transaction (UCC 2-104)
ii.
Signed: any symbol executed or adopted with present intention to adopt or accept a writing (UCC 1-201(43))
b. CISG: sale tangible goods btw 2 diff countries (not UK); not services, household/personal/family goods
K Theory
a. Offer
i.
Preliminary negotiations- invitation to offer
ii.
Offer = Manifestation of willingness to enter into a bargain (Rest. 24) (letter specifying shopping around, not offer – Lonergan)
iii.
Addressed to specific offerees (– form letters are not offers - Lonergan)
iv.
Reasonably certain terms (Rest. 33)
v.
Ads: generally requests for offers when not addresses to specific offeree (Lonergan); exception: misleading advertisement, bait and switch
can be offer (Izadi)
vi.
Offer effective when received - Rest. 35; CISG Art 15(1)
vii.
CISG Art 14: sufficiently definite; indicates intention to be bound; address to specific person(s)
viii.
UCC 2-206: invites acceptance in manner/medium reasonable
b. Acceptance
i.
Acceptance manifestation of assent to terms made by offeree – Rest. 50
ii.
By silence in limited circumstances- takes benefit of offered services w/reasonable opportunity to reject them and reason to know they were
offered w/ the expectation of compensation; where offeror has given reason to understand assent can be manifested by silence or inaction;
previous dealings or otherwise reasonable to notify offeror if no intent to accept – Rest 69
iii.
Manif. Mut. assent: even if offer/acceptance can’t identify; moment of formation can’t determine (Rest. 22)
iv.
Medium reasonable if offeror used/customary -similar transactions at time & place offer received (Rest. 65)
v.
Acceptance effective when dispatched even if doesn’t reach offeror (mailbox rule; Rest. 63(a))
vi.
Acceptance of option K effective when received – Rest. 63(b)
vii.
offeror can provide deadline to accept and manner and medium to respond (Rest. 60)
viii.
Mirror Image Rule: if something comes back and not mirror image, counter-offer
ix.
Power of acceptance terminated by rejection, counter-offer, lapse of time, revocation, death or incapacity – Rest. 36(1); and by nonoccurrence
of any condition of acceptance under terms of offer – Rest. 36(2)
x.
UCC: conduct by both parties can indicate existence of contract -- 2-204(1)
1. E.g., loan, attorney, take possession of items to be transferred, used on own substantial time; repeating and ongoing conduct manifesting
agreement; adhered to established course of dealing
2. Agreement sufficient even if moment of making is undetermined – 2-204(2)
3. Does not fail for indefiniteness even though a term(s) left open – 2-204(3) - agree to essential terms?
xi.
CISG: silence or inactivity is not an acceptance – Art. 18(1)
1. statement made/conduct of offeree indicating assent to offer is acceptance – Art. 18(1)
2. acceptance effective when received; not effective if doesn’t reach offeror – Art. 18(2)
c. Revocation
i.
revocations (42), rejections, and counter-offers effective when received (Rest. 40)
ii.
Indirect revocation: offeror takes definite action inconsistent w/intention to enter into proposed K and offeree acquires reliable information
to that effect – Rest. 43; Normile - snooze
iii.
Offers are freely revocable until accepted, even if promise to keep open (common law)
iv.
Offer can be kept alive as option K if pay consideration for it- given exclusive right at fixed price within specified time (common law)
v.
UCC 2-205 offer by merchant in writing, signed, is good for reasonable period of time (limit is 3 months unless consideration or new writing
for additional time)
vi.
CISG : Offer can revoke up until acceptance sent – Art. 16(1)
1. Can withdraw offer even if irrevocable if withdrawal reaches offeree before or at same time as offer – Art. 15(2)
2. Can’t revoke if indicated irrevocability or if reasonable for offeree to rely on offer as being irrevocable and offeree has acted in reliance
on offer – Art. 16(2)
d. Unilateral Ks
i.
If doubt as to whether offer invites acceptance by promise or performance, offeree chooses – Rest. 32
ii.
Where offer invites offeree to choose btw acceptance by promise or performance, tendering or beginning of invited performance is an
acceptance by performance; promise to complete performance – Rest. 62
iii.
Tendering or beginning the invited performance create an option K , irrevocable– Rest. 45
e. Postponed Bargaining - Agreement to Agree
i.
Agreement to Agree (Walker: no agreement bc didn’t agree on price or method to determine)
ii.
Formal K being contemplated – manifestations of themselves sufficient to conclude K, manifest intention to prepare and adopt written
document, not merely preliminary negotiations – Rest. 27, Quake
1. Factors: many details, large amount $, formal written document required, indication that formal written document contemplated
iii.
UCC 2-305: can conclude contract even though price not settled
f.
Consideration
Classic Test: Benefit/Detriment
Modern Test: Bargain for Exchange (Pennsy: promise induced detriment; detriment induced promise); bargain sought by promisor: act,
forbearance, creation/modification/destruction of a legal relation -Rest. 71
iii.
Legal sufficiency, not adequacy (Batsakis)
iv.
Past consideration and moral obligation not acceptable (Plowman)
v.
Performance of legal duty not consideration – Rest. 73
vi.
Illusory and alternative promises not consideration (reserving choice of alternative performance) – Rest. 77
vii.
Rest 87(1): recital of purported consideration good enough if in writing and had to purpose exchange of fair terms in reasonable time (NOT
widely accepted by courts)
g. Mutual Assent/Intent
i.
Rest 21 – you can be bound to a K without realizing it has legal significance
ii.
Rest: no manifestation of mutual assent if materially diff meanings and
1. Neither party knows or has reason to know the meaning attached by the other –Rest 20(1)(a)
2. Each party knows or has reason to know the meaning attached by the other – Rest 20(1)(b)
iii.
Rest: Manifestations although misunderstandings
1. Manifest in accordance with the party that does not know of any diff meaning attached by the other and the other knows the meaning
attached by the 1st party (advantage to less knowledgeable - Rest 20(2)(a)
2. Manifest in accordance with the party that has no reason to know of any diff meaning attached by a=other and the other party has
reason to know the meaning attached by first party (advantage to one with no reason to know) – Rest 20(2)(b)
iv.
Whose Meaning Prevails
1. If parties attach same meaning, use that meaning – Rest. 201(1)
2. If parties attach different meanings, use one attached at time of agreement of:
a. Party that didn’t know of any diff meaning attached by other and other knew the meaning attached by the first party – Rest 201(2)(a)
b. Party did had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning
attached by the first party – Rest 201(3)
v.
Rest. 202: purpose of parties; interpret as whole; plain language given great weight; course of performance
vi.
Rest. 203: interpret K so that it is a valid/lawful one; specific terms greater weight than general;
vii.
interpretation against draftsman (204); interpretation favoring public (207); usage of trade (222)
viii.
Rest. 223: course of dealing (previous conduct of parties)
ix.
Other principles of interp.: word known by company it keeps; specific term illustrates what general, catch all term at end of list means; is
specific terms listed without more general inclusive terms, they are excluded
x.
Ks of Adhesion: party with inferior bargaining power forced to adhere to ters dictated by other party (e.g., insurance)
xi.
UCC: nature, purpose, and circumstances of action (1-205); course of dealing and usage of trade (2-208)
h. Battle of the Forms
i.
Common Law Last Shot Rule: find acceptance by last party’s move; favors suppliers/sellers (Princess Cruises)
ii.
UCC 2-207:
1. (1) add’l or diff terms = still acceptance unless acceptance expressly made conditional on assent to add’l/diff terms
2. (2) Add’l terms are proposal for addition. Between merchants, become part of K unless:
a. (a) Offer expressly limits acceptance to terms of offer
b. (b)Materially alter it (surprise and hardship test; goes against norm)
c. (c) Notification of objection already given or given within reasonable time
d. **If different terms, 3 approaches:
i.
Inclusive Approach: same analysis, apply 3 subparts
ii.
Categorical Exclusion Approach: not referenced in (2); doesn’t become part of K [majority]
iii.
Knock Out Approach: Knock out; courts supply reasonable term
3. (3) Conduct by parties can recognize party even if haven’t established one. Terms = parties agree, supplement with provisions of UCC
where necessary
iii.
CISG Art. 19: reply to an offer with additions, limitations or other modifications is a counter-offer. If the additional or different terms don’t
materially alter the terms, it is an acceptance unless offeror objects (orally or in writing) without delay. Materially alter includes: price,
payment, quality and quantity, place and time of delivery, extent of one parties liability to other, settlement of disputes
i.
Statute of Frauds
i.
CISG: None (Art. 11 – writing not required)
ii.
Types within SoF: K for sale of interest in land (Rest. 110(1)(d)); agreements can’t be performed within one year (Rest. 110(2)); Ks for sale of
goods $500 or more (UCC 2-201)
iii.
Sufficient Memorandum
1. Rest 131: any writing, signed by or on behalf of party to be charged; reasonably identifies subject matter of K; sufficient to indicate K;
states w/ reasonable certainty essential terms
a. Can be more than one document; only one has to be signed; can use parol evidence (oral evidence – testimony) to sure related
(Crabtree)
2. UCC 2-201(1): indicates a K of sale made; signed by party against whom enforcement is sought. Writing ok if omits or incorrectly states
term. Not enforceable beyond quantity of goods shown in writing.
i.
ii.
3.
UCC 2-201(2) Between Merchants: if within reasonable time a written confirmation of K signed by sender received and recipient has
reason to know of contents, satisfies (1) against party written unless recipient doesn’t write objection within 10 days (if objection – SoF
not met)
iv.
Exceptions
1. Rest: 139 Reliance: reasonably expect to induce action/forbearance; does induce action/forbearance; injustice avoided only by
enforcement
2. Rest. 129 Past Performance Exception: Seeking specific performance re land; reasonable reliance, continuing assent of party seeking
enforcement against; changed position so that injustice can be avoided only by specific enforcement
a. Beaver – show an outsider would naturally and reasonably conclude K alleged
3. UCC 2-201(3)(a) Exception for Specially Manufactured Goods: substantial beginning or commitment
4. UCC 2-201(3)(b) Admission Exception: Admission in pleading/testimony/otherwise that K for sale was made but K not enforceable under
provision beyond quantity of goods admitted (against common law)
5. UCC 2-201(3)(c): Payment Past Performance Exception: with respect to goods for which payment has been made and accepted or
received and accepted
j.
Shrinkwrap
i.
Buyer places order by phone, web or mail.
ii.
Terms arrive in box. By keeping product, purchaser acquiesces
iii.
Layered/Rolling Approach: Seller is offeror. Offer manifested upon shipment of goods. Terms must specify possibility of rejecting by return
and reasonable period to return goods (>5days)
iv.
Klocek Approach: Buyer’s order is offer. Seller accepts payment and ships. Terms included in shipment are proposals. Buyer has ability to
assent to them.
k. Browsewrap
i.
Terms available on side part of agreement; using information = acquiescing
ii.
User must have adequate notification of existence somewhere of terms
iii.
Typically enforced when business keeps visiting site or term invoked against company itself
l.
Clickwrap / Clickthrough Transactions
i.
Purchaser clicks “I agree” button, assenting to all terms. In practice, user doesn’t read.
III. Promissory Estoppel
a. Reliance: Someone show be compensated when they reasonably relied on someone’s words or actions and suffered detriment doing so
b. Rest. 90(1): reasonably expect to induce action/forbearance; does induce; injustice avoided only by enforcement
c. Courts – “detrimental” reliance
d. Family – usually gratuitous promises; more lenient with charities
e. Rest. 90(2): charitable subscription/marriage settlement binding w.o. proof promise induce action or forbearance (most courts haven’t followed)
f.
Commercial context: changing position usually sufficient actual reliance (e.g., retiring, promotion)
g. Pre-Acceptance Reliance:
i.
Contract bidding: can’t revoke if reasonably rely (sub bound by bid sent to GC)
ii.
Rest. 87(2): takes above ^ to all contract; not majorly followed (reasonably expect to induce action/forbearance of substantial character; does
induce; only avoid injustice by enforcing)
IV. Non-Promissory Restitution
a. Unjust Enrichment: shouldn’t be allowed to keep something come to you via unjust process at someone else’s expense
b. Rest. Restitution 1: Peron unjustly enriched at expense of other subject to liability for restitution
c. Restitution requires (1) enrichment (benefit given to party) and (2) retention of benefit unjust
d. Rest. Restitution 2: Person who officiously confers a benefit upon another not entitled to restitution (interfering with someone’s affairs w.o.
justification)
e. Rest. Restitution 116: restitution in favor of furnishing emergency services in a situation where serious bodily harm or pain will otherwise result,
provided Ptf acts unofficiously
V. Promissory Restitution
a. Rest. 82(1): Promise to pay all/part of antecedent contractual or quasi-contractual indebtedness owed by promisor is binding if indebtedness still
enforceable or would be except for statute of limitations
b. Rest. 82(2): Promise = voluntary acknowledgment, admitting present existence of antecedent indebtedness; voluntary transfer of $, negotiable
instrument, or other thing; statement that statute of limitations wo’t be pleaded as defense
c. Rest. 83: express promise to pay all/part indebtedness discharged or dischargeable in bankruptcy proceeding begun before promise made is binding
d. Rest. 86: promise made in recognition of benefit previously received by promisor form promisee is binding to extent necessary to prevent injustice.
Not binding if conferred benefit as gift, promisor not unjustly enriched, or to extent value disproportionate to benefit