Offer & Acceptance
What is an offer?
An offer is a manifestation of a willingness to enter into a bargain that creates the power of acceptance. It must be communicated to the offeree and must be specific and definite to what and to whom it is being offered.
What is consideration?
Consideration is a bargain for exchange.
What is the best remedy for each?
1. A man promised his daughter a tract of land.
2. A man was sick and promised his daughter a tract of land if she came to take care of him.
3. Knowing that her father his sick, a woman moves home to care for him. After he gets better he promises her a tract of land.
4. A man was sick and collapsed in the parking lot of the ER and an ER doc on his way in to work stops to render aid.
1. Promissory estoppel
2. Breach of Contract
3. Promissory restitution
4. Restitution
Under common law and UCC, what contracts are subject to the SOF?
1. Marriage contracts
2. Contracts that cannot be performed within one year of its making.
3. Land contracts
4. Executor
5. Contracts for the sale of goods for $500 or more
6. Suretyship
7. Statue
An offeree sends rejection then an acceptance, does the mailbox rule apply? why or why not?
No because whichever is received first is effective.
What is an acceptance under common law?
What is an acceptance under Article 2 of the UCC
An acceptance is a manifestation of assent to the terms therof made by the offeror in a manner invited or required by the offer. The acceptance must comport to the terms of the offer and it must be timely.
2-207(1) A definite and seasonable expression of acceptance or written confirmation which is sent within a reasonable time operates as an acceptance, even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
What constitutes consideration and what does not?
An act other than a promise, forbearance, and the creation, modification, or destruction of any legal relation.
Illusory promises, mere recitation of consideration, past consideration.
A general contractor placed a bid for a large government contract to build an airport. The general contractor solicited bids from subcontractors for various aspects of the project. The general contractor listed the lowest-bidding subcontractors in its own bid application but informed all the listed subcontractors that this inclusion did not constitute an acceptance of their bids and that the general contractor reserved the right to select different subcontractors. The county government selected the general contractor to build the airport. The government then issued a press release naming the general contractor as the winning bidder and also naming all of the subcontractors listed in the general contractor’s bid. The listed plumbing subcontractor saw the press release and subsequently declined several offers to do other work, based on its belief that it would be busy working on the airport project for the next several years. The general contractor then informed the plumbing subcontractor that it was choosing a different subcontractor.
If the plumbing subcontractor sues the general contractor under a theory of promissory estoppel, is it likely to recover?
A) No, because declining offers to do other work does not qualify as definite and substantial action.
B) No, because the subcontractor did not reasonably rely on a promise from a promisor.
C) Yes, because the subcontractor suffered a detriment by not being selected to work on the airport project.
D) Yes, because the subcontractor suffered a detriment by declining offers to do other work.
What are the exceptions to the SOF under common law?
1. Part performance for land contracts only. Possession and valuable improvements.
2. Promissory estoppel (reliance)
A woman who was hosting a party began negotiations with a caterer. The caterer offered to cater the party for $10,000. The woman stated that she needed some time to think about it. The caterer handed the woman a signed offer sheet that stated that the offer was good for four months in exchange for payment of $100. The woman wrote the caterer a check for $100 and stated that she would get back to the caterer in one month at most.
How long, if at all, is the caterer bound to keep the offer open?
A. four months
B. three months
C. one month
D. a reasonable amount of time
Generally, an offer can be revoked at any time prior to acceptance. List the 4 exceptions to the general rule and the definitions to those exceptions.
1. Option Contracts: An option contract is a promise to hold the offer open for a specified period of time and it must be supported by consideration. (can not be revoked)
2. Unilateral contracts: Once the offeror has made an offer, where there has been a substantial step in furtherance of performance, it cannot be revoked.
3. 2-205 firm offer: An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed 3 months, but any such terms of assurance on a form supplied by the offeree must be separately signed by the offeror.
4. Restatement 87: 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 justice.
A national employer had used a generic employment agreement when it hired its employees, all of whom worked on an at-will basis. The employer’s outside counsel advised that state-specific employment agreements were preferable. The employer sought to have current employees execute new, state-specific employment agreements. The agreements did not materially alter the terms of the prior generic employment agreement; the job responsibilities and salary for existing employees did not change. However, the employer required current employees to sign and agree to them in order to remain at their jobs.
Are the new state-specific employment agreements enforceable?
A) Yes, because no consideration is required to enforce the new agreements.
B) Yes, because the new state-specific employment agreements are supported by consideration.
C) No, because the new agreements lack consideration under the preexisting-duty rule.
D) No, because current employees are required to sign the agreements in order to remain at their jobs.
A general contractor sought bids for framing for an office building project. A subcontractor submitted a bid of $350,000 which was $5,000 less than the next lowest bid. The general contractor used the subcontractor's bid in submitting its overall bid of $5 million and was awarded the project. The general contractor went to the subcontractor's office to inform him that it was awarded the contract. However, prior to informing the subcontractor, the subcontractor told the general contractor that due to an unexpected increase in lumber, it was withdrawing its offer. The general contractor informed the subcontractor that it expected it to perform the work, but the subcontractor refused. If the general contractor sues the subcontractor for damages, who will prevail in a jurisdiction adhering to the modern view?
A. The general contractor, since the use of the bid created an enforceable contract.
B. The general contractor, since the general contractor relied on the subcontractor’s bid when making its bid on the project.
C. The subcontractor, since there was no mutuality of obligation.
D. The subcontractor, since it revoked its offer prior to acceptance.
A law student is struggling to make ends meet. She tells her uncle that the bookstore will not let her purchase books on credit anymore since she has not made payments for the past two months. She needs her books for this semester as the first class is approaching. The owner of the bookstore is an old friend of the student's uncle, and he knows that the uncle is quite wealthy. The uncle calls the owner and says, “If you will let my niece buy her books on credit, I promise that if she does not pay her bill with you by the end of the academic year, I will pay you the balance.” The owner of the bookstore agrees. The uncle writes a quick thank you note to the owner on his personal stationary that includes his initials at the top of the card. The note says: “Thank you for agreeing to continue to sell on credit to my niece in exchange for my promise to honor her debts.” He neglects to sign the note. During both the phone call and in the note, it is clear which student is the uncle's niece. If the bookstore sues to enforce the uncle’s promise what is the likely outcome if the uncle raises the Statute of Frauds as a defense, assuming the applicable state has a Statute of Frauds that mirrors the Restatement (Second) of Contracts?
A) The court will deny enforcement of the oral contract because there is no writing signed by the uncle that memorializes the contract and this type of contract falls within the Statute of Frauds.
(B) The court will dismiss such a defense because the Statute of Frauds does not apply to the uncle’s promise.
(C) The court will dismiss the uncle’s defense, because the uncle’s thank you note meets the requirements of a signed written memorandum.
(D) The court will determine that the Statute of Frauds applies and was not satisfied but will dismiss the defense because the store partly performed by selling books to the niece before her uncle called.
A steel manufacturer agreed to sell a certain amount of steel to a purchaser on a monthly basis. The parties signed a fully integrated contract, drafted by the purchaser, stating that the price of the steel would be set based upon the monthly market price for steel, as listed in a certain trade magazine. Several months into the contract, the trade magazine stopped publication. The purchaser refused to accept the manufacturer’s next delivery and the manufacturer sued the purchaser for breach of contract. The manufacturer demonstrated that the market price of steel was still discernible from other sources and asked the court to enforce the contract.
How will a court likely rule?
A) For the purchaser, because the continued publication of the trade magazine was a condition of the contract, whose nonoccurrence relieved the parties of their duties to perform under the contract.
B) For the purchaser, because the court will not be able to use extrinsic information about the market price of steel to supplement the terms of a fully integrated contract.
C) For the manufacturer, because the court will interpret any ambiguous terms in the contract against the purchaser, who drafted the contract.
D) For the manufacturer, because the court will supply the now-missing price term by discerning the market price of steel from other sources
A company offered a woman a job contract. The contract specified the woman’s duties, salary, benefits, holidays, start date, and other material terms. The woman responded to the company by saying that she accepted its offer but wanted one extra week of vacation time per year.
Has the woman accepted the company’s offer?
A) Yes, because the request for an extra week of vacation will be treated as a proposal for an addition to the contract, not a counteroffer
B) Yes, because the extra week of vacation time is not an essential term of the contract.
C) No, Because the extra week of vacation time materially alters the contract
D) No, because the request for an extra week of vacation will be treated as a counteroffer, not an acceptance.
After completing law school and passing the bar, a young lawyer went home to join his father in his law practice. Two years after working with his father, a large firm offered to pay him twice the amount he was making. He informed his father of the offer and the father told him that there was no way that he could match the offer but if he continued to work for him, upon his death, the entire practice would be his. The son agreed and informed the law firm that he rejected its offer. Six months later, the father was killed in an automobile accident and the estate refused to convey the practice to the son. Is the son entitled to the practice?
A. Yes, because he reasonably relied on the promise and an injustice would result.
B. Yes, because the agreement between the father and son was supported by consideration.
C. No, because the father's death terminated the offer.
D. No, because the agreement was not supported by consideration.
All of the following took place in a jurisdiction that follows the Restatement 2d.
Professor Smith looked out his front window one day when he heard some screeching tires. He immediately turned and saw his neighbor Peter hit by a car driven by Daniel.
Dr. Jones, who was driving by, stopped and treated Peter and took him to the hospital. Despite Dr. Jones’s rapid response and competent, expert treatment, Peter died from his wounds at the hospital a few days later.
Professor Smith felt horrible about the whole situation because he had called Peter and asked him to come over because Professor Smith had some homemade cookies he wanted to give Peter.
In order to cheer up Professor Smith, three of his students washed and groomed his prized poodle. The following day, to show his thanks, Smith promised the students he would pay them each $20. (The reasonable value of the wash and grooming was $150).
Although Professor Smith was not legally responsible for Peter’s accident, he felt responsible because Peter was coming to see him and because of that, he promised Peter’s widow $10,000 a week after the crash.
Who, if anyone, is obligated to pay Dr. Jones for the treatment of Peter?
A. Professor Smith.
B. Peter’s Estate.
C. Both Peter’s Estate and Professor Smith.
D. Neither Smith nor Peter’s Estate is obligated to pay Dr. Jones.
A father and his adult daughter encountered an old family friend on the street. The daughter said to the family friend “How about lending me $1000 to buy a used car? I’ll pay you back with interest one year from today.” The father added, “And if she doesn’t pay it back as promised, I will.” The family friend thereupon wrote out and handed the daughter his personal check, payable to her, for $1,000 and she subsequently used the funds to buy a used car. When the debt came due, both the daughter and the father refused to repay any part of it. In an action by the family friend against the father to recover $1000 plus interest, which of the following statements would summarize the father’s best defense?
A. He received no consideration for his conditional promise to the family friend.
B. His conditional promise to the family friend was not made for the primary purpose of benefiting himself (the father).
C. His conditional promise to the family friend was not to be performed in less than a year from the time it was made.
D. The loan by the family friend was made without any agreement concerning the applicable interest rate.
Paul was interested in buying the home of Renee. Paul made an offer of $120,000.00. Renee accepted the offer but wanted Paul to pay for her moving expenses. Paul accepted Renee's offer but only if these expenses do not exceed $1,000.00. Renee then sold the house to another buyer and informed Paul of the sale. Paul sues for breach of contract. Who wins?
A. Paul, because Renee had made a firm offer under UCC 2-205.
B. Renee, because she rejected Paul's offer.
C. Renee, because Paul rejected her offer.
D. Paul, if he can prove that Renee was a merchant
Buyer sent Seller a Purchase Order for 1,500 laptops at a price of $400 per laptop, and the Purchase Order had a clause stating that Buyer would have one year to make any breach of warranty claim. Seller sent Buyer an Acknowledgment confirming it would send 1,500 laptops at $400 per laptop. The Acknowledgment was identical to the purchase order, with these exceptions:
The Purchase Order and Acceptance were the only communications regarding the contract exchanged between the parties. (Assume there are no unconscionability issues).
Assume the laptops were sent and Buyer accepted and paid for them. Which is the most accurate statement?
A. The two are in a valid contract and there is a one year warranty claims period.
B. The two are in a valid contract and there is a ninety day warranty claims period.
C. The two are in a valid contract with the warranty claims period determined by what the law would provide if the parties had not included the one year or ninety day period in their forms.
D. The two are not in an enforceable contract.
Patty, a young college graduate, had saved up $5,000 while working on the weekends during her college years. She needed a car to go out for interviews to obtain a professional job and knew her uncle Donald had a car he was not using. She explained her situation to Donald who offered to sell it to her for the $5,000 she had saved to help her out with her job hunt, even though both Patty and Donald knew that similar cars were selling for no less than $8,000 on Autotrader.com and other car selling sites. She accepted on the spot and wrote him a check there and then, which Donald put in his wallet. However, the next day, when she went to pick up the keys and arrange for title to be transferred, Donald said he could no longer give her the car for that price and gave her back her check.
In an action for breach of contract, who will prevail?
A. Donald, because the promise to sell was not supported by adequate consideration.
B. Donald, because until Patty picked up the keys and had the title transferred, the deal was not final and so he had the right to change his mind.
C. Patty, because there was a bargained-for exchange.
D. Patty, because of the moral obligation theory of consideration.
What is promissory estoppel?
What is restitution?
What is promissory restitution?
A promise which the promisor should reasonably expect to induce action or forbearance on part of the promisee or third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise, remedy granted for breach may be limited as justice requires.
Was there a benefit conferred on the defendant? Did the defendant have knowledge of that benefit? Did the defendant accept or retain the benefit? Would it be unjust for the defendant to retain the benefit without paying for it.
Promise made after the benefits are received. 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 to the extent necessary to prevent injustice.
What are the UCC exceptions to the SOF? Define each
1. Merchant Confirmation: Between merchants if within a reasonable time a writing in confirmation of the contract is received, and the party receiving it has reason to know of its contents, it satisfies the requirements under subsection(1) against such party, unless written notification of objection to its contents is given within ten days after it is received.
2. Admissions in pleadings or courts: If the party against whom enforcement is sought admits in his pleading, testimony, or otherwise in court that a contract for sale was made, but the contract is not enforceable beyond the quantity of goods admitted.
3. Specially manufactured goods: If the goods are to specially manufactured for the buyer and are not suitable for sale to others in the ordinary course of the sellers business and the seller, before notice of repudiation is received and under circumstances which reasonably indicate that the goods are for the buyer, has made either a substantial beginning of their manufacture or commitments for their procurement.
4. Payment or delivery of goods: goods for which the payment has been made and accepted or which has been received and accepted.
On January 15, a university received a catalog from a wholesale furniture supplier. Included with the catalog was a signed letter stating, “We will supply you with as many of the items in the enclosed catalog as you order during the next calendar year. We assure you that this offer and the prices in the catalog will remain firm throughout the coming year.”No other correspondence passed between the furniture supplier and the university until the following May 1, when the supplier received an e-mailed order from the university for 150 chairs as listed in the catalog. The supplier refused to sell the chairs to the university. If the university sues the supplier for breach of contract, who should prevail?
A. The university, because the supplier had not revoked its offer.
B. The university, because the supplier agreed to hold the offer open through the year.
C.The supplier, because irrevocability of the supplier's offer was limited to a period of three months.
D.The supplier, because the university did not accept the superstore's offer within a reasonable time.