CONTRACTS OUTLINE Entering into a contract is a voluntary act and a person possesses complete autonomy over whether or not

they enter a contract. I. ROADMAP A. Big Issues 1. How many disputes do you find in the fact pattern 2. Take facts and put them across the different disputes 3. Analyze each communication to determine if they fit the rule you are analyzing 4. When interpreting a statute, quote the statutory language and/or paraphrase B. Big Conclusions 1. For each dispute state a conclusion C. State clearly what you will do in the essay 1. First Im going to determine what law governs, then determine if a contract formed (Analytical Framework) D. CIRAC format on every analysis/question II. WHAT LAW GOVERNS? (ANALYTICAL FRAMEWORK # I.) A. UCC Article 2 1. Deals with the transaction of goods 2. Does not define offer, acceptance and /or consideration B. CISG: United Nations Convention on the International Sale of Goods C. COMMON LAW 1. Case Precedent III. BI AND UNILATERAL CONTRACTS A. Bilateral Contracts 1. Involves a promise from both parties in the contract 2. The contract is formed when both promises are exchanged B. Unilateral Contracts 1. Involves a promise from one party for an exchange performance 2. Contract is formed when one part is completed (performance) and the other remains as a correlative duty (promise) IV. WAS A CONTRACT FORMED? (ANALYTICAL FRAMEWORK # II.) A. Contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Restatement (Second) 1 1. 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. Restatement (Second) 2 UNIFORM COMMERCIAL CODE CONTRACTS DEFINITION 1-201 A. Contract is total legal obligation that results from the parties agreement as determined by the UCC as supplemented by any other applicable laws

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CONTRACTS OUTLINE LENSES OF CONTRACT INTERPRETATION A. OBJECTIVE THEORY OF INTERPRETATION / REASONABLE PERSON 1. Universal Observer Test (Narrowest Test) 1. Has the least amount of information 2. Looks at words and conducts only 2. Positioned Test 1. From the perspective of the hearer 3. Socially Situated (Broadest Test) 1. Looks at words, conduct, economy, environment 2. Does not only look at just the two people, look at the whole picture B. SUBJECTIVE THEORY OF INTERPRETATION 1. Doctrine of Misunderstanding: there is no manifestation of mutual assent to an exchange if: 1. The parties attach different meanings to their manifestations and 2. Neither party know or has a reason to know the meaning attached by the other

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ELEMENTS OF A CONTRACT In order to judge if there is a contract, look at whether there is mutual assent A. Mutual Assent is a formation of a contract requires there is a meeting of the minds. Restatement (Second) 22 1. Mutual Assent is determined by three elements 1. Offer 2. Acceptance 3. Consideration OFFER is a manifestation of willingness to enter into a bargain so made as to justify another into understanding that their assent to the bargain is invited and will conclude it. Restatement (Second) 24 A. Manifestation 1. Tangible, perceptible expression, oral or written words or action B. Willingness 1. Present intent to conclude a deal now C. Bargain 1. A promise for a promise 2. A promise for a performance D. Justify 1. Stated with reasonably certainty 1. The offer has been expressed with such detail that the court can figure out there has been a breach and give a remedy. Restatement (Second) 33 E. Another F. Assent is Invited 1. Clearly asking the offeree to say yes G. Will Conclude it 1. The offeror has no outstanding things to do and the offer can be accepted as is H. NOTES ON OFFER

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CONTRACTS OUTLINE 1. Tested from perspective of the hearer (Objective theory of interpretation; positioned test) 2. Can be revoked anytime before acceptance by the offeror 3. The offeror is a master of his offer IX. ACCEPTANCE is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer. Restatement (Second) 50 A. The offer gives the offeree a continuing power to complete the manifestation of mutual assent by acceptance of the offer. Restatement (Second) 35 B. Offerees power of acceptance is terminated by: Restatement (Second) 36 1. Rejection or counter-offer by the offeree 2. Lapse of time 3. Revocation by the offeror 4. Death or incapacity of either party 5. The non-occurrence of any condition of acceptance under the terms of the offer C. Offer can be accepted only by a person whom it invites to furnish the consideration. Restatement (Second) 52 D. Mailbox Rule of Acceptance 1. An offeree has accepted an offer when the acceptance is put in the mailbox, not when it reaches the offeror E. Mirror Image Rule of Acceptance 1. An acceptance to an offer must be the mirror image of the offer; changes to the offer constitute a counter-offer 2. Same in terms and acceptance F. If not unambiguously specified, an offer can be accepted by any reasonable means if it is the one used by the offeror or one customary in similar transactions. Restatement (Second) 65 G. Silence does not constitute an offer unless 1. The parties agree that silence will constitute acceptance 2. The parties past dealings have established a practice in which silence is understood to convey acceptance 3. The offeree gains or retains the benefits of the offered contract COUNTEROFFER is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer. Restatement (Second) 39 REVOCATION OF AN OFFER an offeror can revoke an offer up until the point of acceptance A. Rejection or counteroffer B. Revocation of the offer C. Lapse: expire after passage of a specified or reasonable period of time D. Death of the offeror or the offeree UNIFORM COMMERCIAL CODE SCOPE 2-102 A. Applies to transactions in goods UNIFORM COMMERCIAL CODE SUPPLEMENTAL LAW 1-103 A. UCC promotes policies: 1. To simplify, clarify and modernize the laws of commercial transactions

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CONTRACTS OUTLINE 2. Permit the continued expansion of commercial practice through custom, usage, and agreement of the parties 3. Make uniform the law among the various juridictions B. Unless displaced by particular provisions of the UCC, supplement its provisions with common law for these areas 1. Law and equity; law merchant 2. Principal and agent, estoppel, fraud, misrepresentation, duress, coercion, mistake, bankruptcy, and other validating and invalidating XIV. XV. XVI. UNIFORM COMMERCIAL CODE GOOD DEFINITION 2-105 A. All things which are moveable at the time of identification to the contract for sale UNIFORM COMMERCIAL CODE TRANSACTIONS OR CONTRACT FOR SALE 2-106 A. Includes both a present sale of goods and a contract to sell goods at a future time UNIFORM COMMERCIAL CODE SALE DEFINITION 2-106 A. Consists in the passing of title from the seller to the buyer for a price B. A present sale means a sale which is accomplished by the making of the contract

NON REVOCABLE OFFERS XVII. UNIFORM COMMERCIAL CODE FIRM OFFERS 2-205 A. An offer by a merchant in signed writing that gives assurance that offer will no be revocable, for lack of consideration during the time stated (or if no time stated for a reasonable time) but the time cannot exceed three months. XVIII. OPTION CONTRACTS RESTATEMENT (SECOND) 25 A. An option contract is a promise which meets the requirements for the formation of a contract and limits the promisors power to revoke an offer. XIX. EXPRESS OPTION CONTRACT RESTATEMENT (SECOND) 87 A. 87 (1) B. 87 (2) Detrimental reliance 1. There is no contract, its pre setup in order for the offeree to decide to take the contract C. DS ACCEPTANCE BY PERFORMANCE; ACCEPTANCE BY PROMISE 50 (2) BILATERAL CONTRACTS A. 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 OPTION CONTRACTS CREATED BY PART PERFORMANCE OR TENDER RESTATEMENT (SECOND) 45 UNILATERAL CONTRACTS A. Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it. B. The offerors duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms.

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CONTRACTS OUTLINE XXII. UNIFORM COMMERCIAL CODE BATTLE OF THE FORMS RULE 2-207 (1) A. A definite and seasonable expression of acceptance sent within a reasonable time is an acceptance even though the offeree states additional or different terms from those offered or agreed upon B. Completely knocks out the mirror-image common rule C. Doesnt get real of the counter offer because it provides that 1. If an offeree expressly conditions his assent on the offeror accepting the additional or different terms, then the offeree has made a counter offer. XXIII. UNIFORM COMMERCIAL CODE BATTLE OF THE FORMS RULE 2-207 (2) A. Additional terms are construed as proposals for addition to the contract or if its between merchants are considered part of the contract unless 1. The offer expressly limits acceptance to the terms of the offer 2. They materially alter it 3. Notification of objection to them has already been given or is given within a reasonable time after notice of them is received XXIV. UNIFORM COMMERCIAL CODE BATTLE OF THE FORMS RULE 2-207 (3) A. If both parties conduct themselves as if there is an existence of a contract XXV. KNOCKOUT RULE (MAJORITY TEST) A. When two conflicting terms are offered by the offeror and the offeree, both terms are knocked out and the court will supplement another to resolve the conflict XXVI. FALLOUT RULE (MINORITY TEST) A. When the offerees terms conflict with the offerors terms, the court will give the offeror the choice in terms and the offerees terms are knocked out. XXVII. MUCH ADO ABOUT NOTHING JURISDICTIONS RULE A. A court considers that the missing different terms was just a legislative mistake and was meant to be there XXVIII. WAIVER A. A volitional relinquishment by act or word; the excuse of the nonoccurrence of a duty XXIX. REPEATED TERMS A. Step Saver v. TSL: the repeated sending of terms does not constitute an acceptance of the terms or as a conditional acceptance, if the party who sends the terms does not expressly seek the others assent. B. For merchant v. merchant, use the 2-207 analysis XXX. CONSIDERATION: a return promise or performance that is bargained for, or any performance including forbearance or return promise done or given as inducement for the promise A. A performance or return promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise B. The performance may consist of 1. An act other than a promise, or 2. A forbearance or 3. The creation, modification, or destruction of a legal relation

CONTRACTS OUTLINE C. The performance or return promise may be given to the promisor or to some other person. It may be given by the promisee or by some other person. D. A promise is not enforceable unless it was given in exchange for a consideration XXXI. DEFENSES (ANALYTICAL FRAMEWORK # III.) XXXII. TERMS OF A CONTRACT (ANALYTICAL FRAMEWORK # IV.) XXXIII. WAS THERE A BREACH? (ANALYTICAL FRAMEWORK # V.) XXXIV. ARE THERE ANY EXCUSES? (ANALYTICAL FRAMEWORK # VI.) XXXV. REMEDIES (ANALYTICAL FRAMEWORK # VII.) XXXVI. THIRD PARTIES (ANALYTICAL FRAMEWORK # VIII.) XXXVII. ALTERNATIVE THEORIES (ANALYTICAL FRAMEWORK # IX.) XXXVIII. VOCABULARY