Deal or No Deal
What are the elements of a contract?
Offer and acceptance which constitutes mutual assent, consideration and a objective intent by both parties to be bound by the contract.
What is consideration?
Consideration exists when something of value is exchanged in a bargain. This means that the promisor must give something of value to the promisee, and, in exchange, the promisee must give something of value to the promisor. A promise has value, as does an act or forbearance.
Define offer and acceptance
An "offer is (i.) the manifestation of the willingness of the maker (offeror) to enter into a bargain (ii) so made as to justify another person (offeree) in understanding that (iii) the offeree's assent to that bargain will conclude the bargain.
Acceptance is the means to assent to an offer, which transform an offer into a legally binding contract.
What does it mean for a contract to be fully intergrated?
The written contract is the full expression of the parties’ intent
Olivia contracts with Daniel to deliver 1,000 custom T‑shirts for her company’s annual event. A day before the deadline, Daniel emails Olivia saying: “I won’t be able to produce the shirts at all — my equipment broke down and I’ve taken another job.” Olivia immediately hires another supplier at a higher price and sues Daniel for breach. Does Daniel’s statement constitute anticipatory repudiation?
Yes, he clearly stated that would not make the shirts. Generally, a clear repudiation of a duty before it is due discharges the injured party's duty to perform and creates an immediate claim for total breach and damages at the time of the repudiation.
An elderly woman sees a man shoveling the snow in front of his driveway. She offers the man $100 to shovel her driveway tomorrow as well. The man's younger brother hears of the offer. He gets up and shovels the snow off of the elderly woman's driveway. Has a contract been formed.
No, you must be an offeree in order to accept an contract
Dean owns a classic1967 Chevrolet Impala that he is selling for $150,000. Sam, a car collector knows that the car is really work $750,000. Sam buys the car for the asking price. Before delivery of the car, Dean later learns the true value of the car. He wants to know if a contract has been formed.
Yes, a contract has been formed. The "peppercorn theory," or "peppercorn rule," states that a nominal amount of consideration, like a literal peppercorn, can be sufficient to support a contract. This doctrine emphasizes that courts will not typically inquire into the adequacy of the consideration exchanged, but rather the existence of consideration, meaning that something of value, however small, was bargained for between the parties
Clark sends a letter to Lois offering to sell her his Superman comics if she responds by email by next Monday. Lois places a letter in the mail on Sunday accepting his offer. Lois realized her mistake and emailed Clark on Tuesday. Is her acceptance valid?
No, as the offer was not accepted in the way that Clark stated that it had to be. The offeror is the "master of the offer" and can dictate the specific time, place, and manner of acceptance. Clark stated that the offer must be accepted by Monday by email which Lois did not do.
Dan contracts with Blair to renovate her historic home. The contract stipulates that Dan will be paid an additional $10,000 upon Blair's satisfaction with the final aesthetic quality of the work." Dan completes the work to professional standards. However, Blair just doesn't want to pay him, so she says she is "not satisfied". Does Blair have to pay him?
Yes, Blair is acting in bad faith by not paying Dan. Contract law implies by law an obligation of good faith and fair dealing upon each party in performance and enforcement of rights and duties under contract.
Alex contracts with Mason to build a custom greenhouse. The agreement states that Mason will construct the greenhouse and Alex will pay the contract price. The contract is silent on who must perform first. Who has to perform first?
Mason. Under common law, if performances can be rendered simultaneously, they are due simultaneously. If one performance takes time (like construction) and the other is payment, the party whose performance takes time must perform first.
Maggie posts a $500 reward to anyone returns her lost dog. Jake searches for the reward for two hours and finds the dog. Before Jake can deliver the dog, Maggie revokes her offer for a reward. Was a contract formed?
Restatement (Second) of Contracts § 45, comment d provides that when an offeree begins performance in a unilateral contract, the offer becomes temporarily irrevocable. Revocation is barred until the offeree finishes or abandons performance.
Jim enters into a deal with Dwight to manufacture as many fake lottery tickets as he cares to for $5 each. He does this for month before refusing to continue. Dwight once to know if he can sue for breach of contract.
No, Jim did not provide consideration for the contract and did not intend to be bound to the promise as evidenced by "as he cares to". This is a illusory promise as Jim can choose whether or not to perform.
David offers to sell Patrick 100 bottles of wine for $100. Before Patrick can accept, he dies of food poisoning. Patrick's family wants to still purchase the wine for the funeral at the great deal that was offered to him. They accept on Patrick's behalf. Is the acceptance valid? If Patrick died after acceptance, would David still have to execute the contract?
If Patrick died before accepting then the deal is terminated but if he accepted before dieing then the contract is enforceable. Under the common law, the death or incapacity of the offeree terminates that person's power of acceptance.
Eleven contracts with Eggo for the sale of 1,000 waffles. The contract is silent of the type of waffles to be provided but the industry standard for waffles is chocolate chip. Eggo delivers her blueberry waffles. Also, the last twenty times she has ordered waffles Eggo has sent chocolate chip waffles. Has Eggo breached the contract even though the contract doesn't list waffle type?
Yes. Eleven will argue that trade usage and course of dealings mean waffles should be interpreted as chocolate chip waffles. When terms are vague or ambiguous, courts give deference in interpretation to trade usage and course of dealing.
Nora contracts with BuildCo to renovate her kitchen for $50,000, with payment due upon completion. BuildCo finishes most of the work but installs faulty electrical wiring that causes frequent power outages and leaves several outlets unsafe to use. The countertops are also cut incorrectly, leaving gaps that make the kitchen unusable. Buildco refuses to fix anything. Is Nora required to perform under the contract?
No, Nora is not required to perform as Buildco materially breached the contracted and refuses to cure the breach. Restatement (Second) of Contracts § 225(2) provides that only the breaching party's failure to cure the material breach discharges the non-breaching party's duty to perform.
Lilly mails an offer for a new car on May 1. Robert receives it May 3. On May 4, the offeree mails an acceptance. On May 5, the offeree changes their mind and emails a rejection. Offeror reads the rejection on May 5 and the acceptance arrives on May 6. Is there a contract and when was it formed or rejected?
Yes, there is a contract that became effective on May 4. Acceptances become effective upon mailing under the mailbox rule and rejections are effective under the UCC. Even though the rejection was received first, acceptance was effective first.
Monica has been offered a high-paying job as a personal chef in California. Ross offers her $10,000 to help with the move. After Monica moves, she buys new furniture, expecting to be reimbursed by Ross. Ross refuses to pay her the money. As Ross's lawyer, what is his best argument for why there was no consideration?
Sample: Monica did not provide consideration as exchange anything of value. She may have a case for promissory estoppel if she detrimentally relied on Ross's promise.
Tom provides Reed, who is illiterate with a contract to sign for the purchase of the coffee table. Reed signs the contract without reading it. The contract is the standard contract that everyone who goes to Tom's store signs and is not unconscionable. Tom had no reason to know that Reed was illiterate. Reed's wife reads the contract and tells him to get out of it. Can he rescind the contract?
No, as the duty to read doctirne that when a person signs a contract, a reasonable person is entitled to believe that the party read the contract and assented to all the terms. In the absence of fraud, such a person is normally bound to other terms of the contract.
Eve contracts to buy apples from her neighbor Adam, whose tree grew too many. Eve notifies Adam that she wants fresh apples to make an apple pie. Adam tells Eve that his apples are perfect for apple pie. Eve bought apples and when she got home she discovered that they were rotten. What warranties were breach?
Debatably it maybe an express warranty that the apples are perfect for apple pie. The implied warranty of merchantability is only applicable if Adams is a merchant and he is not. Implied warranty of fitness for a particular purpose may apply as Adam knows the purpose for which Eve needs the apples.
Maya signs a contract to buy a piece of land, with the condition that she must deliver proof of financing by June 1. She paid a $250,000 deposit. She secures financing but submits the paperwork on June 3. The seller tries to cancel the deal, even though Maya is ready and able to pay in full. Maya sues to obtain the land. If the court ruled for her, explain why.
Courts may excuse the non‑occurrence of a condition to avoid disproportionate forfeiture when the delay is minor and causes no harm. Maya’s two‑day delay is trivial compared to losing the entire land purchase.
Two parties negotiate a contract for landscaping services. They agree on duration and payment schedule but never specify what work the landscaper must perform. One party open discovering that he can get the landscaping work done cheaper, calls the landscaper the day he was supposed to start work and cancels. Has a contract formed?
No, the terms of a contract must be reasonably certain in order for a court to enforce the agreement. In most cases involving uncertainty, a court must clarify the meaning of an indefinite, ambiguous, or omitted term. A term is indefinite if it is left open or uncertain. If an indefinite term is essential, then a court will likely void the contract for indefiniteness. Here the scope of the landscaper's duties is a essential indefinite term
Spike owes Buffy $5,000 for private investigation work. Spike however, honestly and reasonably believes the work was incomplete and only owes $3,000. To avoid a lawsuit, they sign an agreement stating that Spike will pay $4,500. Spike pays the $4,500 but Buffy sues for $500. Does Buffy have a right to recovery under the pre-existing rule.
No, normally under the preexisting duty rule, modification is unenforceable when an obligee receives absolutely no legal consideration (not even a peppercorn) for an obligor's promise to render "the same " performance required by the original contract. In this case, we have accord and satisfaction. Under accord and satisfaction, the parties agree to settle their dispute with a new agreement ("accord") and the performance of that new agreement ("satisfaction"), discharges the original obligation.
To boost production, Horizon Electronics announced to all technicians:“Any technician who repairs the most units this month will receive a $7,500 performance bonus.”A week later, the operations manager, told Marcus and Talia that they had were leading.Nina had intended to send the message only to Marcus. At the time, Talia was not actually in the lead, but both technicians increased their output. By the end of the month, Marcus finished first by a small margin. Both were denied the bonus. How would a court rule?
Only Marcus gets the bonus. The offer was a unilateral contract, inviting acceptance by performance. Performance, as defined in the offer, was to be the top technican.
Sophia signs a written contract to purchase a "newly renovated townhouse". The contract is silent on the scope of renovations. Before signing, Sophia is told that the kitchen had been completely remodeled with brand‑new appliances. After closing, Sophia discovers the kitchen appliances are 50 yrs old and the only “renovation” was a coat of paint. Why would the court allow Sophia to produce evidence about the conversation concerning the renovations.
Sophia could produce evidence to clear up the ambiguous phrase " newly renovated". She could also introduce evidence of fraud if the owners of the townhouse told her that the appliances were new, but they knew that they were not. Evidence to clear up ambiguous terms and show the illegality of contracts is admissible even if a contract is fully integrated
Dana agrees to paint Nicky’s garage for $2,000, and Nicky agrees to deliver Dana a set of plates in exchange. The contract does not make either promise conditional on the other’s performance — each is stated as a separate obligation. Dana fails to paint the garage, but Nicky still refuses to hand over the plates. Which party(ies) have breached?
Nicky and Dana both breached. When promises are independent, each party must perform regardless of whether the other has performed. Breach by one does not excuse the other’s duty. Dana’s failure to paint does not relieve Nicky of her obligation to deliver the plates. Dana obviously breaches by not painting the garage.