Contracts Outline
[Contractual Obligation]
Enforceable contract requires:
 Offer
 Acceptance
 Consideration
Mutual Assent
Intention to Be Bound: Objective Theory of Contract
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Objective manifestations of an agreement rather than a subjective “meeting of the minds”
Intent is determined from what a reasonable person would have thought it meant
Ray v. Eurice & Bros., Inc.: Each party separately signed the back of every page of a contract, including a list
of specifications. Home-buyer assented to those signed terms. Home-builder claimed that they had never
seen them and had assented to an earlier list of terms.
 Holding: There was a contract and the terms were those to which both parties showed an objective
manifestation of assent (i.e. signed the papers).
 The contract contained the home-buyer’s specifications; the home-buyer assented to those terms.
The home-builder’s contrary belief was a unilateral mistake. An objective look at the contract
shows those terms, signed by both parties, so that is the contract.
Offer and Acceptance in Bilateral Contracts
Bilateral Contract:
 Promise for promise
o Both parties must fulfill their promise
 Futurity: promise for future exchange
 Restatement §2 (1): “A promise is a manifestation of intention to act or refrain from acting in a
specified way, so made as to justify a promisee in understanding that a commitment has been
made”
Offer
 Restatement §24: “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 the bargain is invite and will conclude it “
 Empowers the offeree to accept
 May be a qualified offer (only empowers offeree to accept based on certain conditions)
 General Rule: Advertisements and form letters are NOT offers
Longergan v. Scolnick: Seller advertised land for sale. Buyer inquired. Seller sent letter labeled “form
letter” with the requested information and told buyer to let him know quickly if he wished to purchase.
Buyer answered but seller had already sold to someone else.
 Holding: There was no contract. There was no offer, so there could be no contract.

Buyer could not have assented to any of seller’s communication because seller’s letter required
something other than just saying “yes.”
o Restatement §24
Izadi v. Machado (Gus) Ford, Inc.: Seller circulated an ad that in large print suggested that a buyer could
trade in any car for $3000. Buyer tried to do so and seller relied on the very small print in the ad
qualifying the trade-in.
 Holding: It was an offer because there was language of commitment or invitation to take action
without further communication.
 Exception to the general rule that advertisements are not offers…
o The ad suggested that no further action was required (first come, first served, bait-andswitch)
 Applying an objective standard to interpreting the advertisement, it is an offer.
Counter-offer
 Restatement §39: Changing the terms of an offer; an offeree’s power of acceptance is terminated by
his making of a counter-offer (the original offer no longer exists)
 Restatement
Normile v. Miller: Buyer gave seller an offer to purchase the property. Seller gave buyer a counteroffer that
buyer neither accepted nor rejected. Seller accepted another party’s offer and informed buyer that the
counteroffer was revoked.
 Holding: The buyer cannot accept the original offer after making a counter-offer
 Seller’s counteroffer was a new offer. Once this was made, the original offer can no longer be
accepted. Since there was no option contract in the counteroffer, the seller could revoke it up to the
moment of acceptance. Since buyer did not accept it before revocation, seller was free to revoke his
counteroffer and accept another party’s offer.
Acceptance
 Restatement §50(1): “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”
 Restatement §50(3): “Acceptance by a promise requires that the offeree complete every act
essential to the making of the promise”
Offeree’s power of acceptance is terminated by…
 Restatement §36:
o Rejection or counteroffer by offeree
o Lapse of time
o Revocation by the offeror
o Death or incapacity of the offeror or offeree
Mailbox Rule
 Acceptance is effective upon dispatch (Restatement §63)
 Revocation and offers are effective upon communication (Restatement §40)
Offer and Acceptance in Unilateral Contracts
 Restatement §32: In cases of doubt of whether there is a unilateral or bilateral contract the offeree
chooses
Unilateral Contract
 Promise for performance
 Acceptance of an offer to enter into a unilateral contract is the performance of the requested act
o Restatement §50(2): “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 “
 Restatement §45: In unilateral agreements “an option contract is created when
the offeree tenders or beings the invited performance in accordance with the terms of the offer” as
long as performance is later completed
o Substantial performance test used in Cook
Petterson v. Pattberg: Offeror wrote to offeree with an offer to enter into a unilateral contract exchanging a
promise that the offeror would reduce the offeree’s mortgage debt for a performance that the offeree
would pay the reduced principal of the debt prior to a certain date. Offeror sold the mortgage to a third
party before offeree had performed. Before the due date, offeree visited offeror to pay the mortgage.
Offeror stated that he had sold the mortgage. Offeree showed him the money for his payment and offeror
refused to accept.
 Holding: Offeror can withdraw an offer to enter into a unilateral contract at any point before
acceptance.
 Unilateral contracts are revocable until the offeree’s full performance of the acts called for in the
offer because that performance is the acceptance of the offer.
 Offeree had not yet performed the act requested of him when he arrived at offeror’s home with the
money because he had not actually paid the mortgage yet. Since there had been no performance,
the offer had not yet been accepted and was still revocable. Offeror could withdraw.
Cook v. Colwell Banker/ Frank Laiben Realty Co.: Offeror orally announced that its employees would
receive varying bonuses based on their commissions at the end of the year. Later offeror said that they
would be paid the following March instead of at the end of the year; at this time, offeree had reached the
maximum tier of bonuses. Offeree stayed at offeror’s company in reliance on the promise of a bonus.
Offeree quit to accept a position elsewhere the following January and offeror told her she would not get
her bonus.
 Holding: Offer to enter into a unilateral contract cannot be withdrawn after the offeree has
tendered substantial performance.
 An offeror may not withdraw an offer to enter into a unilateral contract where the offeree has
substantially performed.
 Offeree had reached the top tier of bonuses by earning high commissions before the offer was
modified. She had substantially performed. Offeror unable to withdraw at this point
Postponed Bargaining: The “Agreement to Agree”
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When parties arguably intended to agree to be bound but have not determined all terms or have
left certain terms for postponed decision
NOT generally permitted under common law; UCC permits it
Walker v. Keith: Landlord leased to tenant for at 10-year term at $100/month with an option provision for
an additional 10-year term under the same terms and conditions with rent to be fixed on the comparative
basis of rental values reflected by the comparative business conditions at the date of the renewal. Tenant
gave proper notice to renew the lease but the parties could not agree on the new rent.
 Holding: There is no contract to renew because the parties have neither determined a rent term
nor determined a sufficiently certain method of calculating one.
 An agreement must be sufficiently definite. Terms may be left for future determination by a
prescribed method
 The parties agreed to agree to a rent figure, but this is not binding. The rent is a material term to
the lease. The provision that future rent would be based on “business conditions” is too uncertain a
method and so unenforceable.
Letters of Intent
 The requirement that there is going to be a substantive formal agreement is not determinative
o Formalistic language won’t undue the parties intention to be bound
 Must look at parol evidence to determine intention
Quake Construction, Inc. v. American Airlines, Inc.: Contractor orally notified that it had been awarded the
contract. Owner’s agent sent contractor a letter of intent to induce contractor to enter into agreements
with subcontractors and to induce subcontractors to supply their license numbers. . At a preconstruction
meeting, Jones told Quake, the subcontractors, and government officials that Quake was the GC for the
project. Immediately following the meeting, American Airlines informed Quake that their involvement was
terminated.
 Holding: The language of the letter is ambiguous as to whether the parties intended to be bound; it
is a question of fact for the jury
 The parties’ intent should be determined from the language of the writing. If the language is
ambiguous, parole evidence is admissible to determine the parties’ intent.
 Intention to be bound is supported by the detailed terms of the letter, the statement that the letter
“authorizes the work,” the short time between when the letter was sent and when work was to
begin, and the cancellation clause suggesting that the letter was something that might need to be
cancelled. Intention not to be bound is supported by the contemplated formal contract and the
cancellation clause.
Consideration
Defining Consideration
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Benefit/Detriment Test
o Benefit to the promisor, OR detriment to the promisee
Bargain for Exchange Test
o Did the parties bargain for the promise or performance exchanged?
o Restatement §71 (2): “Performance or return promise is bargained for if it is sought by the
promisor in exchange for his promise, and given by the promisee in exchange for that
promise”
 Promise given in consideration for x ; quid pro quo
Williston’s Tramp Example: A benevolent man tells a tramp that if he goes around the corner, he
may there buy a coat on the man’s credit. No reasonable person would understand that the short
walk was requested as consideration for the promise but rather that in the event that the tramp go
to the shop, the promisor would make him a gift.
Hamer v. Sidway: Offeror promised offeree that if offeree would refrain from drinking, using tobacco,
swearing, and gambling until he was 21 years old, offeror would pay him $5,000. Offeree notified offeror
when he turned 21 that he had fully performed. Offeror died without having paid the money to his uncle.
 Holding: There was consideration. The offeree’s giving up his legal rights to drink, use tobacco,
swear, and gamble was a detriment to him that constituted consideration.
 Consideration is either some right, interest, profit, or benefit to the promisor or some forbearance,
detriment, loss, or responsibility given, suffered, or undertaken by the promisee. Courts will not
ask whether the consideration was of substantial value to the parties.
 Even though the offeree was in some way benefitted by the purported consideration (the requested
behavior), this is irrelevant because the offeree still gave up a legal right in refraining from the
requested activities.
Pennsy Supply, Inc. v. American Ash Recycling Corp.: The project specifications included a notice to bidders
that aggregate was available at no cost from this supplier. Subcontractor informed supplier of the quantity
needed and picked it up. The pavement developed cracking and had to be redone. The aggregate was
hazardous waste and subcontractor had to incur disposal costs.
 Holding: There was a contract. The consideration was the subcontractor picking up the aggregate
(this induced the promise, and the promise was induced by this).
 The promise must induce the detriment and the detriment must induce the promise.
 Supplier’s promise to supply subcontractor with aggregate free of charge induced subcontractor to
assume the detriment of taking title to the aggregate (and assuming its disposal responsibilities),
and it was this detriment which induced the supplier to make the promise to provide free
aggregate to the subcontractor.
o This is not a conditional gift situation because although there was no active bargain, the
promise induced the consideration and the consideration induced the promise.
Applying the Consideration Doctrine
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Adequacy of the consideration will not be judged
o Restatement §79: “If the requirement for consideration is met, there is no additional
requirement of … (b) equivalence in the values exchanged; or (c) mutuality of obligation”
Consideration ≠ motivation
Past consideration is no consideration
Dougherty v. Salt: Promisor gave promisee a promissory note for $3,000 on a printed form stating “Value
Received” (which is supposed to signify consideration), and said “You have always done for me, and I have
signed this note for you. Now, do not lose it.”
 Holding: There was no consideration if the note was just a gift, no matter how it is labeled, and it is
not enforceable as a contract
 Nothing is consideration that is not regarded as such by both parties.
 The note was labeled “value received,” but there was no actual consideration for the note. It was a
voluntary promise of a gift to be executed in the future. The promisor had a number of methods to
make the note legally enforceable that she failed to employ (executed gift, testamentary gift, gift in
trust).
Batsakis v. Demotsis: Lender agreed to lend borrower 500,000 drachmae in exchange for a letter in which
the borrower promised to pay the lender $2,000 plus 8% interest at the end of the war or when she could
access her U.S. money. The drachmae were actually worth $25.
 Holding: There is consideration even though there was a disparate value.
 Inadequacy of consideration will not void an otherwise enforceable contract.
 The contract was essentially 500,000 drachmae in exchange for execution of the written
instrument. The borrower got exactly what she bargained for, regardless of the disparity of value
Plowman v. Indian Refining Co.: Employer needed to lay off some of its workforce. Then-VP separately
arranged with individual employees to keep the employees on payroll at one-half their current salary,
minus insurance premiums, if the employees retrieved the check from the office, for their long and faithful
service. Employees say VP told them the payments would last as long as they lived; VP said he told them
the payments were terminable at the company’s pleasure. VP did not have the authority to make this
arrangement and there are no records of it. A new VP replaced the one who made the arrangement and
the payments to employees stopped.
 Holding: There was no consideration because there was no benefit to the promisor, detriment to
the promisee, or bargain for exchange.
 Past consideration is no consideration. Consideration requires a benefit to the promisor or a
detriment to the promisee.
 The employees’ long and faithful service cannot be consideration because it happened before the
promise was made and so had not been bargained for with respect to the promise. Picking up the
checks was not a benefit to the employer or a detriment to the employees, but in fact was the
opposite.
 Agency issue: VP didn’t have the authority. Continued issuance of the checks does not imply acceptance
by those who do have the authority.
 Agency: A consensual relationship in which an agent agrees to act on behalf of, and is subject to the
control of, the principal
 Principal is bound by the agent when the agent has “actual authority”
 Agent has actual authority to take actions
o Expressly designated by principal’s manifestations
o Implied by principal’s manifestations
o Necessary/incidental to achieve principal’s objectives
 When agent has no actual authority, principal may be bound if he gives the third party reason to
think that the agent has actual authority to do the act in question (“apparent authority”)
 When agent has neither actual nor apparent authority, principal is liable on a contract that he
learns the agent has entered him into and approves of
Contract Formation Under Article 2 of the UCC
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UCC applies when there is a sale of goods
o If you can’t hold it or move it, it is NOT a good
UCC deals with merchants (person who deals in goods) AND non-merchants (consumers)
o UCC §2-104 (1): :‘Merchant’ means a person who deals in goods of the kind or otherwise by
his occupation holds himself out has having knowledge or skill particular to the practices or
goods involved in the transaction or to whom such knowledge or skill may be attributed by
his employer of an agent or broker or other intermediary who by his occupation holds
himself out as having such knowledge or skill”
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Special rules for transactions between merchants
o Rationale: Bar is lowered for merchants; assumed that they have attorneys/ should know
better
3 purposes of the UCC
o Make commercial law reflects the actual agreements between the parties rather than
applying formalistic principles
o The UCC likes to have commercial law reflect actual current business practices
o The UCC imposes a duty of good faith to parties in commercial transactions
Mutual Assent Under the Uniform Commercial Code
 §2-206 – Offer and Acceptance

o An offer to enter into a contract shall be construed as inviting acceptance in any manner and
by any medium reasonable in the circumstances
o An order or other offer to buy goods for prompt shipment shall be construed as inviting
acceptance by a prompt promise to ship or by prompt shipment
§2-204
o (1) A contract for sale of goods may be made in any manner sufficient to show agreement,
including conduct by both parties, which recognizes the existence of such a contract.
o (2) An agreement sufficient to constitute a contract for sale may found even though the
moment of its making is undetermined.
o (3) 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.
Jannusch v. Naffziger: P owned and operated Festival Foods (concessions truck and trailer); P entered into
an oral contract with D to sell Festival Foods for $150,000. D paid 10,000 and said they would pay rest
once they got a bank loan. P cancelled lease where the truck and trailer were stored. D backed out of the
agreement. D admitted to taking possession of the business, receiving income from it, purchasing
inventory, replacing equipment, and paying taxes and employees.
 Holding: There was an agreement to sell Festival Foods, and Ds breached that agreement
E.C. Styberg Engineering Co. v. Eaton Corp.: From 1998 to 2000, P manufactured a custom brake assembly
part for inclusion in D’s six-speed transmission motor vehicle part. In 1999, the parties began negotiating
an agreement under which Styberg would produce large quantities of the part for Eaton. During this time
several e-mail exchanges and telephone calls between employees of both parties occurred that discussed
quantity and price. Lisa Fletcher, Ds employee, sent an email to P’s engineer committing D to purchase
13,000 parts. However, P wanted a larger purchase commitment from D to offset its capital investment in
manufacturing the parts. Thereafter, no purchase order was ever issued by D for the 13,000 parts.
 Holding: There was no contract. The various discussions by e-mail, telephone, and letter are
evidence of continued negotiations NOT a contract
 Parties usually made a purchase order – their failure to do so suggests that they did not have an
agreement;
o Look at trade usage, course of dealings of prior transactions to determine mutual assent
o We expect merchants to behave the way they have in the past
Irrevocability By Statute: “The Firm Offer”
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Option contract; there does not need to be consideration to bind
§2-205
o
o
o
o
o
o
(1) An offer
(2) By a merchant
(3) To buy or sell goods
(4) Singed and in writing
(5) Which by its terms gives assurance that it will be held open
(6) For a reasonable time not to exceed 3 months
Qualified Acceptance: The “Battle of Forms”
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Why use the form?
o Limits the power of your agents (especially salespeople)
Problems with forms
o It is very common that they do not actually reflect the parities’ agreement
UCC § 2-207 is intended to deal with written confirmations to an oral or informal agreement or the
exchange of order and acceptance forms (as in Princess or Brown Machine)
2-207 applies to additional or different terms, NOT the consideration of the bargain (ex. I will sell
you X for $100 and I will buy X for $75 – the $ is the consideration so this is not the type of term it
means)
UCC § 2-207 Additional Terms in Acceptance or Confirmation
 (1) An acceptance or written confirmation which is sent within a reasonable time is an acceptance
even if it states additional or different terms, unless acceptance is expressly made conditional on
assent to the additional or different terms
[“Expressly made conditional” construed narrowly – Brown Machine]
 (2) The additional [& different] terms are proposals for addition to the contract.
o Between merchants the terms become part of the contract unless:
 The offer expressly limits acceptance to the terms of the offer,
 They materially alter the offer, or
 The offeror has already objected to them or objects to them a reasonable time after
they are received
o 2-207-2 – different terms not mentioned; Courts split on how to handle this
o Some jurisdictions: Different terms never become part of the contract
o Others: Treat different and additional terms the same (based on Comment 3)
o Others: Knockout rule – all different or conflicting terms gets knocked out of the
contract
 (3) Conduct by both parties that recognize the existence of a contract is sufficient to establish a
contract for sale even if the writings do not establish a contract. The terms of such a contract are
those terms on which the writings agree.
 Terms that materially alter are those that result in surprise and hardship (ex. clause negating
standard warranties, but NOT clause setting forth seller’s exemption due to supervening causes
beyond his control)
 Terms that are proposals for addition to the contract – the other party has to accept each additional
term for it to be part of the contract
Common Law Solutions to Battle of the Forms
 Mirror Image Rule: Acceptance must exactly match the offer for there to be a contract (otherwise
the “acceptance” is a counteroffer)
o Restatement § 59 – A reply to an offer which purports to accept it but is conditional on the
offeror’s assent to terms additional to or different from those offered is not an acceptance
but is a counteroffer

Last Shot Rule: A party impliedly assents to and accepts a counteroffer by conduct indicating lack
of objection to it; last form governs the contract
o Criticism: The seller usually has the last form  corporation gets to set up terms and the
buyers are always the “losers” (formalistic classical contract law)
Princess Cruises, Inc. v. General Electric Co.: Buyer issued Purchase Order for services to be performed by
seller plus terms and conditions, with a proposed price of $260,000. Seller received Purchase Order and
sent buyer a Fixed Price Quotation with a detailed service description and parts list plus its own terms and
conditions, with an offering price of $201,888. Seller sent buyer Final Price Quotation with price of
$231,925 and sellers’ terms and conditions, including limited liability to repair/replace defective goods or
damaged equipment resulting from defective service. Buyer gave seller permission to proceed on the
price in Final Price Quotation by phone. Seller sent confirmatory letter restating price and specifying that
seller’s terms would govern the contract. During services, the rotor was damaged, causing buyer to cancel
two lucrative cruises. Buyer did pay the full $231,925. Buyer sues for breach of contract.
 Holding: The UCC would apply to a mixed contract predominantly for the sale of goods with
services incidentally involved. This is a contract predominantly for the rendition of services with
goods incidentally included, and so is governed by common law.
 In determining whether the UCC applies to a mixed contract, the predominant purpose of the
contract must be the sale of goods.
o Factors
 (1) language of contract
 (2) nature of the business of the supplier
 (3) intrinsic worth of the materials.
 The contract was principally concerned with the rendering of services. (
o 1) The language of the purchase order requested service functions and the quotation was
titled “Quotation for Services,” making it plain that the contract was for services with parts
supplied incidentally.
o (2) The seller company was a manufacturer of goods, but the seller’s correspondence came
from their Installation & Service Engineering Department, which provides service functions.
o (3) The intrinsic worth of the parts cannot be determined, but rather both parties’
correspondence blend the prices together into the final price of a services contract. There
was a mixed contract primarily for services, so it will be governed by common law.
 The Purchase Order was an offer. The Final Price Quotation materially altered the offer’s terms and
was a counteroffer.
 Buyer accepted the counteroffer with its phone call, by not objecting to the confirmatory letter, and
by paying the price of that counteroffer. That counteroffer determines the terms of the contract, so
seller’s terms are part of the contract.
Brown Machine, Inc. v. Hercules, Inc.: Seller sent proposal to buyer containing indemnification clause.
Buyer sent purchase order to seller stating “This order expressly limits acceptance to the terms stated
herein.” Seller sent order acknowledgement to buyer with the original and the indemnification clause.
Buyer sent letter to seller stating that the one specification should be changed and all other
“specifications” were correct. Seller sent buyer invoice.
 Holding: There is NOT indemnification clause because of 2-207(1) and 2-207(2)(a).
 Price quotes are generally not offers but rather offers to enter into negotiations. Orders are
generally offers to purchase.
 Seller’s purchase order was not an offer but rather an offer to enter into negotiations.
 Buyer’s purchase order was an offer.
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
Seller’s order acknowledgement was an acceptance with additional terms that did not expressly
limit acceptance to buyer’s assent to these terms, and so it was an acceptance and not a
counteroffer.
Buyer’s offer stated that acceptance was limited to the offer’s terms, so the indemnification clause
is not part of the contract.
o If there is a counteroffer – Accepted by express assent to those terms; if not express assent
but the parties continue as if there is a contract, go to 2-207(3) and knock out any
contradictory terms
Electronic and “Layered” Contracting
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UCC may apply BUT may not be relevant
o 2-204 – important predicate for formation
o 2-207 – MIGHT come into play
Shrinkwrap terms: written terms and conditions that the purchaser finds when he opens the box;
usually contains a term that you have a certain number of days to return the product or else you
have accepted the terms
o Majority view (Easterbrook):
 Consumers or buyers order is merely an invitation
 Shipment of the goods with the terms constitutes an offer
 The buyer accepts by keeping the item, OR rejects by returning the items
o Minority view (Koceck)
o Buyers order is the offer
o Seller accepts by shipping the goods
o The shrink-wrap terms are the additional terms
 Consumer buyer and merchant seller: The terms are not part of the contract
unless the consumer agrees to them
 Merchant buyer and merchant seller: Follow 2-207 (2)
Clickwrap terms: Purchaser must scroll through and click “I agree” before they can complete their
purchase; must affirmatively signal their assent
o MOST objective manifestation of assent
Browsewrap terms: terms elsewhere on an Internet provider’s website;
o Likely binding when the buyer has reason to know of the terms
o UNLIKE clickwrap the buyer doesn’t have to affirmatively signal assent
o LEAST objective manifestation of assent
Hines v. Overstock: Buyer returned a vacuum purchased from sellers retail website and received a full
refund, minus a $30 restocking fee. . The only link to these terms was found at the bottom of the pages of
the website, and it was not necessary for the buyer to scroll to the bottom of any page she visited to
complete her transaction. Buyer initiated a class action lawsuit against defendant Overstock.com alleging
that defendant’s “restocking fee” amounted to a breach of contract. Seller claimed that the buyer also
agreed to arbitration.
o Holding: There was no agreement to arbitrate
o A contract requires a meeting of the minds and a manifestation of mutual assent; the making of
contracts over the internet DOES NOT fundamentally change the rules of contract
o NO evidence that she was aware of the terms and conditions
o The buyer had NO constructive notice of the agreement
o UCC applies BUT is NOT relevant
DeFontes v. Dell, Inc.: Buyers brought a class action against Sellers. Buyer alleged that when they
purchased computers and software and accompanying Optional Service Contract Sellers improperly
imposed a “tax” on the service contracts. The optional service contract provided for on-site repair and
service of its computers with Dell often acting as an agent for third-party service providers, including
BancTec and QualxServ. Sellers filed a motion to dismiss the complaints and argued that buyers were
with reasonable notice of the tax when they agreed to the terms and conditions by accepting delivery of
the goods.
o The purchaser is the offeror to buy the goods
o 2-204/ 2-206(1)(b)
[Liability in the Absence of Bargained-for Exchange]
Promissory Estoppel
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
Restatement §90
o A promise
o The promisor should reasonably expect to induce action or forbearance on the part of the
promisee
o Does induce such action or forbearance
o Injustice can be avoided only by enforcement of the promise
Rationale: Private autonomy
Promises Within the Family
Kirksey v. Kirksey: Promisor’s letter to promisee (widowed sister-in-law) stated, “I would advise you to
obtain your preference, and sell the land and quit the country, as I understand it is very unhealthy, and I
know society is very bad. If you will come down and see me, I will let you have a place to raise your
family.” Promisee received the letter, abandoned her land, and moved to the promisor’s land. After 2
years, promisor required her to move to another house and then required her to leave.
 Holding: There was no breach because there was no contract; this was a gratuitous promise.
 One judge says that there was consideration (inconvenience to the promisee of moving).
 Majority says that there was not and this was a gratuity rather than a contract.
 [Promissory estoppel not applied; too modern]
Harvey v. Dow: Parents (land owners) owned acres of land. The daughter and son each had placed mobile
homes on the property with their parents’ permission. Each of the children understood that oneday some
or part of the property would become theirs. Daughter decided to build a house on the property. Father
obtained the required building permit and construction began. Father personally assisted in the building
process. After construction of the $200,000 home was completed, the relationship between daughter and
parents deteriorated. Daughter thereafter asked for a deed to the property on which the home sat, but he
refused. Daughter sued
 Holding: The jury must decide if the facts meet the elements of promissory estoppel
Note Cases
Greiner v. Greiner: Promisor (mother) wrote to promisee (son) that she would make a settlement with him
to divide up a tract of land that she wanted him to move onto. Promisee moved home onto the land.
Promisor was going to give promisee title to the land and write it in her will but her other son told her that
if she did he would move off the land, so promisor did not actually give promisee title or write it in her will
but let him continue to live there. Promisor then sued to recover possession of the land.
 Holding: Under promissory estoppel the promisee has a right to the land
 Promisor made a promise (manifestation of intention) by consistently expressing her intention to
give the land to the promisee (letter, separating the land, moving a house onto the land for
promisee, etc.). Promisor promised the land if promisee moved home and so expected him to rely on
getting the land if he moved. Promisor did move home, made valuable improvements to the
property, and lived on the property for about a year. It is an injustice to now leave promisor
homeless after such reliance and expenditures.
Wright v. Newman: Promisor is neither the birth father nor adoptive father of promisee’s son. Promisor’s
name is on the birth certificate, the boy took promisor’s last name, and promisor has held himself out as
the boy’s father.
 Issue: Whether there was a promise to provide child support that should be enforced
 Holding: Yes, promisor’s implied promise holding himself out as the boy’s father will be enforced so
that promisor pays child support
 Promisor’s actions constituted an implied promise that he would assume the obligations and
responsibilities of fatherhood. Promisor should have reasonably expected promisee to rely on his
promise because he was otherwise acting as the boy’s father for 10 years. Promisee did rely on the
promise by not looking for and seeking support from the birth father. There is an injustice to the
promisee (who now likely couldn’t find the birth father and has no financial help in raising the boy)
and the boy (who has no father or $).
Charitable Subscriptions
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Restatement §90(2): A charitable subscription or a marriage settlement is binding under
Subsection (1) without proof that the promise induced action or forbearance.
o Not widely accepted by the states
King v. Trustees of Boston University: BU sought to add Dr. King’s papers to its library. Dr. King deposited
some papers with BU, with a letter. Letter stated that King authorized removal of most of his papers to BU
and that it was his intention that at the end of each year, more papers would be sent to BU. All papers sent
to BU would remain King’s legal property until otherwise indicated. If, despite scrupulous care, the papers
were lost or damaged, BU was absolved from liability. King stated that it was his intent to each year name
a portion of the papers to become the absolute property of BU as an outright gift, until all papers belonged
to BU, and that in the event of his death all materials deposited with BU became BU’s property.
 [This court rejects 90(2), which does not require consideration or reliance for a charitable
subscription].
 Holding: There is evidence that this is an enforceable charitable subscription
 A charitable subscription is an oral or written promise to do certain acts or to give real or personal
property to a charity for a charitable purpose.
 To enforce a charitable subscription there must be a promise to give some property to a charitable
institution and that the promise was supported by some reliance.
 The bailment relationship created by the letter provides evidence of a donative intent. Evidence
that BU indexed the papers, made them available to researchers, and provided and trained staff to
care for the papers show reliance or consideration for the promise.
Promises in a Commercial Context
Katz v. Danny Dare, Inc.: Employee worked for employer for 25 years. He was injured on the job, by a man
stealing money from employer’s store, and was impaired physically and mentally. Employer negotiated
with employee for 13 months to induce him to retire. Employee accepted a pension plan of $13,000/year
for life that was approved by the Board of Directors. Employee then retired in reliance on the resolution
and employer began making payments as negotiated. Employer intended for employee to rely but claimed
that he had planned on firing him if he did not retire. Employee began working part-time elsewhere and
then worked part-time for employer again. Employer sent him a payment that was only half of the agreed
pension. Employee sent it back. Employer stopped sending payments.
 Holding: The pension plan is enforceable under promissory estoppel
 The resolution was a promise. Employer made the promise intending for employee to rely on it by
retiring. Employee did rely by retiring.
 It does not matter that employer was planning to fire employee if he did not take the pension
because they chose not to. It is an injustice not to continue the payments now that he is otherwise
unable to support himself.
Aceves v. U.S. Bank, N.A.: Plaintiff obtained a home loan from Option One Mortgage Corporation (Option
One) secured by a deed of trust on the residence. Thereafter, Aceves’ loan was transferred to U.S. Bank,
N.A. (defendant). Aceves could no longer afford the monthly mortgage payments and U.S. Bank sought to
foreclose on the property. Aceves then filed for bankruptcy under Chapter 7which imposed an automatic
stay on the foreclosure proceedings (they couldn’t evict from her home – court is going to manage the
liquidation process). After speaking with a U.S. Bank representative who informed her that the bank
would work with her on a mortgage reinstatement and modification, Aceves considered converting the
Chapter 7 bankruptcy into a Chapter 13 bankruptcy (would allowed her to keep the residence and pay the
owed amount over a period of time), However, U.S. Bank persuaded Aceves to forgo bankruptcy altogether
so that it could proceed with a loan modification. After the automatic stay was lifted U.S. Bank scheduled
Aceves’ home for public auction. Around the same time, a loan servicer, on behalf of U.S. Bank, mailed
documents to Aceves for her to complete in order to proceed with a mortgage modification. The day
before the public auction, a “negotiator” proposed a monthly mortgage payment that nearly doubled what
Aceves was previously paying. Aceves rejected the offer. Aceves’ home was sold at auction and she was
required to vacate the premises. Aceves filed suit.
 Holding: Court reversed trial court’s dismissal of Aceves’ promissory estoppel claim.
Limiting the Offeror’s Power to Revoke: The Effect of Pre-acceptance Reliance
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Classical Theory: An offer is revocable anytime until the offeree accepts
Restatement: Once you begin to perform in response to a unilateral offer you are entitled to
complete it
Question here: Is the pre-acceptance reliance a sufficient proxy for acceptance of the offer?
Restatement §87:
o (1) An offer is binding as an option contract if it
 (a) is in writing and signed by the offeror, recites a purported consideration for the
making of the offer, and proposes an exchange on fair terms within a reasonable
time; or
 (b) is made irrevocable by statute.
o (2) 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.
Majority Rule (Drennan): The sub-contractor is bound to the prime-contractor, the primecontractor is not bound to the sub-contractor
James Baird Co. v. Gimbel Bros., Inc.: Supplier sent an offer to supply linoleum to many contractors likely to
bid on a particular job, guaranteeing that the contractor awarded the contract would have those prices
and “offering these prices for reasonable prompt acceptance after the contract has been awarded.”
Contractor factored supplier’s offer into his bid. Supplier realized it had miscalculated and sent out a
withdrawal, which contractor received after bidding. Contractor awarded the job a couple days later and
then formally accepted supplier’s offer. Supplier does not recognize a contract because of the withdrawal.
 Holding: There was no contract because the offer was withdrawn before it was accepted.
 Promissory estoppel does not create an option contract because there was no promise.
 Contractor did not accept the offer by using it in the bid, but by communicating acceptance to the
supplier. The offer was withdrawn before it was accepted so there is no contract. Promissory
estoppel requires a promise, and here there is an offer for exchange (which is not meant to become
a promise until consideration is received).
Drennan v. Star Paving Co.: Contractor received subcontractor’s bid the day general bids were due. It was
customary for contractor to receive bids on the day of and use them to compute their bids. Subcontractor
bid and contractor computed his bid according to this number, and was then awarded the job.
Subcontractor then said the price was a mistake and they could not do the work for that price. Contractor
had to find another subcontractor but still had to pay more for the work.
 Holding: All elements of promissory estoppel are met and the reliance makes the promise binding.
 There was no option contract (no separate consideration) and no bilateral contract (no
acceptance).
 Subcontractor’s offer was a promise to perform on certain conditions. Subcontractor had reason to
believe that if its bid was the lowest, it would be use by contractor. Contractor relied on the
promise by using it in computing his own bid and naming the subcontractor, binding himself to use
it. Injustice can only be avoided by enforcing the promise because the subcontractor made the
mistake and the contractor should not be made to bear that financial loss.
Berryman v. Kmoch: Seller’s option agreement stated, “For $10 and other valuable consideration, I grant
you an option for 120 days after date to purchase the real estate.” $10 was never paid. Seller sold to
someone else. Buyer went to bank to arrange to buy the land and was informed that it had been sold.
Buyer attempted to exercise option.
 Holding: There was no consideration so there was no contract. Seller had no expectations of the
buyer’s reliance so promissory estoppel cannot be used to enforce it.
 An option contract must be supported by consideration to be binding
 Seller had no reason to expect the buyer to rely on his promise by expending money and effort to
find a buyer, so promissory estoppel cannot be used to enforce the promise.
 The $10 is not consideration because it was not paid. The other acts done by the buyer are not
consideration because the seller, though perhaps motivated by the fact that the buyer would
expend energy to sell the land, did not bargain for him to do this and he was not required to do it.
Pop’s Cones, Inc. v. Resorts International Hotel, Inc: Lessee and lessor had several discussions about
lessee’s business possibly relocating to lessor’s space. Lessee informed lessor that she had to decide
whether to continue her current lease by Oct. 1. Lessor told lessee that they were 95% there and that all
she needed was the COO’s signature, and advised lessee to plan on moving. Lessee moved out of current
location, closed business, and put equipment in storage. Lessor sent proposed form of lease and written
offer to lessee that stated it was not binding on the lessor. Lessor then withdrew its offer. Lessee was able
to re-open elsewhere but at a loss.
 Holding: The promise can be enforced, because every element of promissory estoppel is satisfied.
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Lessor promised lessee that the lease would be signed and advised lessee to move out of its current
space. Lessor should have expected lessee to rely on this because the lessee repeatedly told the
lessor that she was relying exactly as instructed. Lessee did rely to her detriment by leaving its
location, closing its business, using storage, etc. There is an injustice because the mom & pop store
was screwed over by the corporation and lost profits and time to be in business.
Principle of Restitution
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Implied-in-fact contract – agreement that typically meets all the requirements of a contract but is
not express or formal (but can be inferred from circumstances) -- (expectation damages)
Implied-in-law / quasi contract – obligation imposed by law without either party agreeing -(restitution)
Restitution in the Absence of a Promise
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Offisciousness – interference in the affairs of others not justified by the circumstances under which
the interference takes place
 Restatement of Restitution § 116: A person who has supplied things or services to another, although
acting without the other’s knowledge or consent, is entitled to restitution therefor from the other if
a) He acted unofficiously and with the intent to charge therefor, and
b) The things or services were necessary to prevent the other from suffering serious bodily
harm or pain, and
c) The person supplying them had no reason to know that the other would not consent to
receiving them, if mentally competent, and
d) It was impossible for the other to give consent, or, because of extreme youth or mental
impairment, the other’s consent would have been immaterial
 Restatement of Restitution § 117: A person who, although acting without the other’s knowledge or
consent, has preserved things belonging to another from damage or destruction, is entitled to
restitution for services rendered or expenditures incurred therein, if
a) He was in lawful possession or custody of the things or if he lawfully took possession
thereof, and the services or expenses were not made necessary by his breach of duty to the
other, and
b) It was reasonably necessary that the services should be rendered or the expenditures
incurred before it was possible to communicate with the owner by reasonable means, and
c) He had no reason to believe that the owner did not desire him so to act, and
d) He intended to charge for such services or to retain the things as his own if the identity of
the owner were not discovered or if the owner should disclaim, and
e) The things have been accepted by the owner
 Posner’s argument – The law should reflect transaction costs. When transaction costs are high (like
someone’s life), the law should assume that the parties would have entered into the agreement and
impose restitution. When transaction costs are low, the law should assume that parties would not
have entered into the agreement and not impose restitution.
Credit Bureau Enterprises, Inc. v. Pelo: Patient made threats of self-harm and purchased a shotgun; police
took him to a hospital. County magistrate found that he was seriously mentally impaired and likely to
injure himself, and entered an emergency hospitalization order. Patient refused to sign a form that would
make him or his insurance liable for the bill. Patient ultimately signed form when woken up at 5am by a
nurse and told that he would not get his belongings back if he did not sign it. Patient released from
hospital a few days later. Hospital sought payment for medical services during his stay.
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Holding: The patient is liable for the cost of services by restitution under Restatement fof Restitution
§116
Patient argues that he did not consent and that he received no benefit from the services. The hospital
unofficiously and with the intent to charge supplied him with mental health services. The services
were necessary to keep him from hurting himself. The patient’s claim that he did not consent and
made this clear is irrelevant because he was mentally incompetent.
Commerce Partnership 8098 Limited Partnership v. Equity Contracting Co.: Owner hired general contractor,
who hired subcontractor. Owner inspected subcontractor’s work as it progressed and when work was
finished, gave subcontractor a “punch list” of remedial work. Subcontractor asked owner for partial
payment but owner said he could not do that, and subcontractor did not complete the punch list.
Subcontractor was never paid. Subcontractor sued general contractor, but it was bankrupt. Subcontractor
alleged that the owner did not pay the general contractor. Owner gave evidence that the general
contractor was paid $223,065.04 and the negotiated price was $256,894, and was precluded from
presenting evidence that owner also made some payments to other subcontractors that would bring the
total amount paid over the negotiated price.
 Holding: Whether the owner was unjustly enriched by the subcontractor’s work depends on whether
the owner paid anyone for the subcontractor’s work
 A cause of action for a contract implied-in-law requires that
o (1) the plaintiff has conferred a benefit on the defendant,
o (2) the defendant has knowledge of the benefit,
o (3) the defendant has accepted or retained the benefit conferred, and
o (4) the circumstances are such that it would be inequitable for the defendant to retain the
benefit without paying fair value for it.
 A subcontractor may maintain such an action against an owner if
o (1) the subcontractor had exhausted all remedies against the general contractor and still
remained unpaid and
o (2) the owner had not given consideration to any person for the subcontractor’s work.
 The subcontractor has a claim if it can prove that the owner did not pay a total amount to the
general contractor and any subcontractor that included payment for this subcontractor’s work.
Watts v. Watts: James indicated to Sue that he would provide for her if she would quit her job and move in
with him. Sue did so and the couple held themselves out as husband and wife, she assumed his last name,
gave birth to 2 children who also assumed his last name, they took out insurance as husband and wife, and
they purchased real and personal property as husband and wife. Sue contributed childcare and
homemaking services, served as a hostess for James’ business, and worked 20-25 hours/week as a
receptionist for him. James indicated orally and through his conduct that she would share equally in the
increased wealth.
 Holding: There is evidence supporting the claims of a contract or a contract implied-in-law
 Contracts are not generally enforced where the sole consideration is sexual relations but a bargain
between two people may still be upheld between parties with a sexual relationship so long as it is
independent of the relationship.
 Unjust enrichment requires (essentially the same as Commerce Partnership)
o (1) a benefit conferred on the defendant by the plaintiff,
o (2) appreciation or knowledge of the benefit by the defendant, and
o (3) acceptance or retention of the benefit by the defendant under circumstances making it
inequitable for the defendant to retain the benefit.
 There is evidence for an express contract, Sue’s change in circumstances may indicate an
agreement and the money, property, and services provided by Sue may be adequate consideration.
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There is also evidence for unjust enrichment. Sue contributed property and services to the
relationship that increased the parties’ assets. James knew that Sue expected to share in this
accumulated wealth and accepted her services. It is unjust for James to retain all of the wealth
while Sue retains nothing from the relationship where she is no more at fault for it ending than he
is.
Promissory Restitution
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Recipient of benefits does make an express promise to pay for the benefits after they are received
Past consideration generally does not make a promise legally enforceable with certain exceptions for
pre-existing legal duties:
o Restatement § 82 – Express or implied promises to pay debts barred by statute of limitations
are enforceable
o Restatement § 83 – Express promise to pay debts previously discharged in bankruptcy is
legally enforceable
o Restatement § 85 – Contracts made by a minor are unenforceable before the minor reaches
the age of majority unless they are for necessaries; the minor becomes legally liable for other
contracts that the minor affirms or fails to disaffirm when he reaches the age of majority
 Restatement § 86
(1) 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
(2) A promise is not binding under Subsection (1)
a) If the promisee conferred the benefits as a gift or for other reasons the promisor
has not been unjustly enriched, or
b) To the extent that its value is disproportionate to the benefit
 Material Benefit Rule: If a person receives a material benefit from another, other than gratuitously, a
subsequent promise to compensate the person for rendering such benefit is enforceable
Mills v. Wyman: Promisor’s adult son was ill after a voyage and promisee found and cared for him. After
expenses were incurred, promisor wrote a letter to promisee promising to pay for the expenses of caring
for his son. Promisor never paid.
 A promise made after the fact for benefits received by the promisor’s adult son is unenforceable
 A moral obligation is only a surrogate for legal consideration where there is a pre-existing legal duty.
 The promisor’s son received the benefit, but he is past the age of majority and the promisor has no
duty to care for him. There is no preexisting legal duty such that the moral obligation replaces a legal
consideration.
Webb v. McGowin: : Promisee was dropping large pine blocks off an upper floor of a mill in the course of
his employment. He realized that the block he was moving would fall on and severely injure or kill the
promisor, below, if he dropped it. The only safe and reasonable way to prevent serious bodily harm or
death to promisor was to hold and fall with the block, diverting it from hitting the promisor. Promisee was
crippled from the fall. Promisor promised to pay him $15/week to support him for the rest of his life.
Promisor made these payments until his death. The payments continued for a few weeks after his death
and then stopped.
 The promise to pay for benefits received is enforceable
 A moral obligation is sufficient consideration for a subsequent promise to pay where the promisor has
received a material benefit from the promisee
 The promisor’s agreement to pay and the promisee’s acceptance of payment show that the services
were not gratuitous. The promise is enforceable because the promisor received a material benefit, his
life, from the promisee’s services and subsequently promised to pay in recognition of this
[The Statute of Frauds]
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Rationale: evidentiary function, causes the parties to reflect on the agreement, makes it easier to see if
the agreement is enforceable
 There is no one “statute of frauds”
o Jurisdictional
o Topic-dependent
 Certain types of contracts must be in writing to be legally enforceable
o Generally the writing must:
 Identify the subject matter
 Indicate that some type of agreement has been made
 State essential terms, usually
o Price
o Quantity
o Delivery date
 Basic Statute of Frauds Analysis:
o Is there a statute of frauds that requires that this contract be in writing?
o If yes, is there a sufficient memorandum that complies with the statutory requirement? (Is
there a writing that meets the statutory requirements that reflects the non-performing party’s
assent?)
o If a statute covers it but a sufficient memorandum is lacking, is there an applicable exception to
the SOF?
 Restatement § 110(1):
(a) A contract of an executor/administrator to answer for a duty of his decedent (any agreement
not to be enforced during the lifetime of the promisor)
(b) Suretyship Provision – A contract to answer for the duty of another (Suretyship – I will be
responsible for the debt or liability of another)
(c) Marriage Provision – A contract made in consideration of marriage (like a dowry, not a
marriage license)
(d) Land Contract Provision – A contract for the sale of an interest in real property
 Usually long term (>1 year) leases have to be in writing
 Restatement § 129: A contract for the sale of land that does not comply with the statute
of frauds may be enforced when the party seeking enforcement satisfies promissory
estoppel
(e) One-Year Provision – A contract that is not to be performed within one year (if there is any
conceivable way that the contract can be performed in the next 365 days, there is no
requirement to put it in writing)
 Restatement § 131: A contract under the statute of frauds is enforceable if it is evidenced by any
writing, signed by or on behalf of the party to be charged, which
(a) Reasonably identifies the subject matter of the contract
(b) 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
(c) States with reasonable certainty the essential terms of the unperformed promises in the
contract
 Restatement §129: [The Land Contract Provision]
o A contract for the transfer of an interest in land may be specifically enforced notwithstanding
failure to comply with the Statute of Frauds if it is established that the party seeking
enforcement, in reasonable reliance on the contract and on the continuing assent of the party
against whom enforcement is sought, has so changed his position that injustice can be avoided
only by specific performance
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Restatements do not preclude promissory estoppel arguments from being made
Crabtree v. Elizabeth Arden Sales Corp.: P negotiated an employment contract for a sales manager position
with Elizabeth Arden Sales Corporation (Defendant). P accepted D’s offer of a two-year contract based on
an annual salary of $20,000 for the first six months, $25,000 for the second six months and $30,000 for the
second year plus expenses. Ms. Arden’s personal secretary prepared a memorandum on a telephone order
blank. A ‘pay-roll change’ card was prepared and initialed and forwarded to the payroll department.
Crabtree received the first scheduled increase but Arden refused to approve the second. P filed a
complaint for breach of contract. D denied the existence of any agreement to employ P for two years and
further contended that, even if one had been made, the statute of frauds barred its enforcement. The trial
court found in favor of P and awarded damages of $14,000. D appealed and the Appellate Division
affirmed.
 Holding: The ‘writing’ requirement may be met by several documents both signed and unsigned and
their relationships may be established by oral testimony
o The court held that it would permit the signed and unsigned writings to be read together,
provided that they clearly refer to the same subject matter or transaction.
 It DOES NOT matter that the writings were not prepared or signed with the intention of evidencing the
contract, or that they came into existence subsequent to its execution. The statute of frauds demands
that they were signed with intent to authenticate the information on the writings, and that such
information DOES evidence the terms of the contract.
Beaver v. Brumlow: Buyers entered into an oral agreement with Seller to purchase a parcel of real
property located on the seller’s 24-acre tract. Buyer was employed at seller’s business. Buyer and seller
walked and marked off the specific boundaries of the proposed parcel of property to be sold. Additionally,
the buyers cashed in their IRA and 401(k) retirement plans to pay for the home and improvements. The
buyers placed a mobile home on the proposed property, spent approximately $85,000 making
improvements, and moved in. No formal sale documents were prepared because the sellers learned that
their mortgage contained a due-on-sale clause that required the entire amount to be paid when the land
was sold. When the buyers consistently requested that a contract for the sale be formalized, they were
told, “we will work it out,” by the sellers. Although a date was never mentioned for the sale of the property
and a price was never determined, the buyers had stated that they would pay the market price for the
land. After leaving the employment of the Beavers and working for a competitor, the relationship between
the buyers and sellers deteriorated. Thereafter, the sellers changed their minds about selling the land to
the buyers and, instead, attempted to lease the property to them. At that point the buyers had been living
on the property for nearly three years. The sellers also attempted to eject the buyers from their property.
The buyers brought suit against the sellers to enforce the oral agreement to purchase the property. At
trial, the sellers argued that the statute of frauds barred enforcement of the oral agreement. The trial court
disagreed and ordered specific performance of the contract to sell the property. The sellers appealed.
 Holding: Trial court judgment affirmed
 Court uses same basic analysis as Restatement §129
 Part performance: Took possession of the property by bringing their mobile home onto the land,
made substantial improvements by skirting the mobile home, adding a septic tank, and landscaping
The Sale of Goods Statute of Frauds: UCC § 2-201
 UCC § 2-201
(1) A contract for the sale of goods for $500 or more in not enforceable without sufficient writing. A
writing is not insufficient because it omits or incorrectly states a term in the contract but a
contract is only enforceable for the quantity of goods shown in the writing.
o [MUST HAVE evidence that it is a contract for sale of goods, the “signature” of the party against
whom enforcement is sought, and the quantity of goods]
(2) Between merchants if a writing is received by one party who has reason to know its contents, it
is sufficient for an enforceable contract if not objected to within 10 days
 Merchant confirmation exception – one of the merchants must send a confirmation of
the contract in writing within a reasonable period of time after the contract was formed
that must be sufficient against the sender. If it meets these requirements it is sufficient to
comply with the statute of frauds even though the recipient does not sign it, but it is not
necessarily conclusive that there was a contract.
(3) A contract that does not satisfy (1) but is otherwise valid is enforceable
(a) If the goods are specially manufactured and not suitable for sale to others
(b) If the party against whom enforcement is sought admits in court that a contract for sale
was made
(c) For goods for which payment has been made and accepted of which have been received
and accepted
 [Partial performance validates the contract only for the goods that have been accepted
or for which payment has been accepted]
Buyer rented 5 barns from seller then negotiated to purchase them, with an oral agreement to do so.
Buyer tried to get a loan and told seller that he would then pay for them with one payment rather than in
installments; buyer did not get the loan and reconfirmed the earlier agreement. Buyer had made
improvements to the barns and held them out as his own. Buyer arranged with other people to purchase
the barns from him. Buyer gave seller a check to seller dated, payable to seller, signed by buyer, and “for”
the five barns. Seller called buyer the next day and told buyer she didn’t want him to sell them to other
people. A few days later seller mailed buyer back the check, ripped up.
 Check was an insufficient writing because the party against whom the contract was to be enforced had
not signed it. The parties’ partial performance made the contract enforceable.
 The writing was insufficient because it was not signed by the party against whom it was to be
enforced. However, the buyer had told people that he had purchased the barns, reimbursed the sellers
for insurance on the barns, paid for improvements, took possession of the barns, and sought to sell the
barns. The buyer delivered a check to the seller, which was accepted by the seller and not returned for
four days. This constitutes partial performance and the contract is enforceable.