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I. What is the legal situation between Murray and Ted?
A. Did Ted and Murray mutually consent to an agreement?
1. Was an offer made by one of the parties?
a) Did Ted make Murray an offer during their phone conversation?
(1) Ted told Murray that the rights “are available for $250,000.” Murray replied,
“I’ll get back to you next week to finish the deal and deliver the money.”
(2) Ted’s use of “available” suggests an invitation to negotiate rather than an
offer; a reasonable person would likely believe that Murray’s assent would not
conclude the bargain. Restatement (2d) §26.
b) Did Murray make an offer to Ted in the email that Murray sent to him?
(1) This document included definite terms such as the price, exactly which works
were to be optioned, and the rights of the parties.
(2) The contractual language suggests that a reasonable person would believe that
Ted’s assent would conclude the bargain.
c) Did Ted make an offer to Murray when he altered the terms and sent Murray a
signed copy (including those altered terms)?
(1) The terms were equally definite.
(2) The contractual language suggests that a reasonable person would believe that
Murray’s assent would conclude the bargain.
2. Was an offer accepted by the relevant offeree?
a) Did Ted accept the offer that Murray sent to him?
(1) In altering the terms Ted effectively rejected Murray’s offer. Restatement (2d)
§38.
(2) The contracts agreed upon were not “mirror images” and thus Ted had no
intent to be bound by Murray’s Offer.
b) Did Murray accept Ted’s counteroffer?
(1) Factual Question: Did Murray sign the counteroffer?
(2) Factual Question: If not, did Murray behave in a way that a reasonable person
would interpret as an acceptance?
B. If Ted and Murray mutually assented to an agreement, is it legally enforceable?
1. Was the agreement in question supported by consideration?
a) Murray promised to give Ted $250,000 in exchange for Ted giving him the
exclusive rights to make a movie based on the Chuckles Works.
b) Ted’s consideration is not consistent. Restatement (2d) §33.
2. Was there reliance to such an extent that the agreement may be legally enforceable?
a) In ending negotiations with other parties, was Ted relying on Murray’s promise?
(1) Murray’s promise induced Ted to end negotiations with other parties.
(2) Ted’s actions were reasonable and reasonably foreseeable if he believed that
Murray would purchase the exclusive rights to the Chuckles Works.
b) Can justice be done only by enforcing this promise? Restatement (2d) §90.
(1) Factual Question: Did Ted actually have other interested buyers?
(2) Factual Question: Did Ted actually end negotiations with those buyers?
II. What is the legal situation between Mary and Murray?
A. Did Mary and Murray mutually consent to an agreement?
1. Was an offer made by one of the parties?
a) Did Mary make an offer to Murray during their lunch meeting?
(1) Murray asked Mary if she would be interested in investing in his film “by
lending [him] $250,000.” Mary replied, “Count me in . . . How would
$500,000 sound? When do you need it?”
(2) The lack of definite terms suggests that this may have been more of a gift
promise than an offer; a reasonable person would not believe that Murray’s
assent would have concluded the bargain. Restatement (2d) §33.
b) Did Murray make an offer to Mary in his email to her?
(1) This document consisted of definite terms including the amount of money,
when and how he wanted the money, and other specific provisions.
(2) The contractual language suggests that a reasonable person would believe that
Mary’s assent would conclude the bargain.
2. Was an offer accepted by the relevant offeree?
a) Did Murray prescribe a method of acceptance? Restatement (2d) §58.
(1) Factual Question: Was such a prescription present in the rest of the document?
(2) If the language is ambiguous, the method of acceptance is generally held to be
either promise or performance. Restatement (2d) §32.
b) Did Mary accept the offer that Murray sent her?
(1) Mary verbally accepted the offer, saying “We’re on. Go make a movie!”
(2) Did Mary provide written acceptance?
(a) Factual Question: Did Mary’s assistant actually sign the document?
(b) Factual Question: Would this signature be legally binding for Mary?
(3) Even without reading the offer, Mary may have signaled her acceptance in a
way such that a reasonable person would believe that she manifested assent to
the terms of the offer. (Ray v. William G. Eurice & Bros., Inc.)
B. If Murray and Mary mutually assented to an agreement, is it enforceable?
1. Was the agreement in question supported by consideration?
a) Mary gives Murray a loan of $500,000. What does Murray provide in return?
(1) Factual Question: Did other portions of the document illustrate exactly what
“price” Murray paid for Mary’s promise? (Restatement (2d) §71.
(2) Murray may support the agreement with the 5% interest rate as consideration.
b) If Murray does not offer anything as consideration, the agreement may in fact be a
mere promise.
2. Was there reliance to such an extent that the agreement may be legally enforceable?
a) Did Murray rely on Mary’s oral promise when he accrued $100,000 in debt?
(1) Murray’s reliance was reasonable and at least partially induced by Mary’s
promise to lend him $500,000, evidenced by Murray incurring the debt
immediately after her promise.
(2) Murray’s actions may have been reasonably foreseeable by Mary, as
evidenced by her saying “I’m sure you could use more than $250,000. . . .”
Mary may have been expecting him to run up expenses.
b) Without Mary’s loan, justice can only be done by enforcing the promise because
Murray will have no way to pay off his debts otherwise.