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INTRUDUCTIUN: Meaning of Contract and Basic Attributes of tbe Contractual

O WhaL ls a conLracL?
4 ConLracL exchange relaLlonshlp creaLed by oral or wrlLLen agreemenL beLween
2 or more persons conLalnlng aL leasL one promlse and recognlzed ln law as
O uoes Lhe law requlre ob[ecLlve or sub[ecLlve agreemenL?
Lnough LhaL words/acLlons creaLe ob[ecLlve sLandard
4 May noL be recorded as a documenL (le can be oral) (!usL harder Lo prove)
4 arLles blnd Lhemselves Lo each oLher for common purpose of conLracL
urpose of relaLlonshlp ls exchange (faclllLaLe and regulaLe exchanges)
4 aclllLaLes Lrade
4 or conLracL Lo exlsL musL be promlse (some commlLmenL for Lhe fuLure some
assumpLlon of llablllLy lasLlng beyond Lhe lnsLanL of agreemenL)
Lxpress or lmplled
4 Why keep a promlse?
ear of legal sancLlon deLers breach
CfLen ln one's self lnLeresL Lo keep lL
4 8ole of conLracL law ls Lo make sure promlse upheld
4 Confers rlghLs and obllgaLlons cognlzable ln law
Soclal order resLs upon Lhe sLablllLy and predlcLablllLy of conducL
(keeplng promlses ls large elemenL of Lhls)
4 CompensaLory damages breach causes flnanclal loss and courL wlll award
[udgmenL Lo compensaLe
O uefaulL mandaLory and alLerlng rules
4 8ules LhaL parLles can conLracL around are ofLen called defaulL" or gapfllllng"
4 ConLracL law provldes defaulL rules abouL whaL ls sufflclenL Lo reach an
agreemenL and abouL whaL Lhe parLles' obllgaLlons are under an agreemenL
4 PCWLvL8 some rules are sLlll mandaLory
le maxlmum amounL of damages parLles can conLracL for eLc
O State |aw governs contracts
O Common law of conLracL ls sLaLe law
4 When federal courL hears sLaLe law conLracLs case lL applles law of Lhe sLaLe
whose law governs Lhe LransacLlon
8ound by sLaLe law precedenLs
4 Covers speclflc Lypes of commerclal LransacLlons
4 ln conLracLs concerned wlLh uCC arLlcle 2 Sales of goods"
ArLlcle 1 general provlslons appllcable ln all arLlcles lncludlng
arLlcle 2
4 uCC overrules sLaLuLes
4 Cood lnclude movable Lhlngs oLher Lhan money and varlous lnLanglble
4 Common law prlnclples used ln con[uncLlon wlLh code provlslons
4 ormallsL 1heory
Speaks Lo boLh Lhe conLenL of appllcable law and Lhe meLhod of
lnLerpreLaLlon and appllcaLlon
adherence Lo a norm's prescrlpLlon wlLhouL regard Lo Lhe background
reasons Lhe norm ls meanL Lo serve"
O 8ellef ln relaLlve coherence and lnLegrlLy of brlghLllne legal
caLegorles and ln Lhe relaLlve ob[ecLlvlLy of language
CourLs should noL engage ln conLexLual lnLerpreLaLlon LhaL goes beyond
conLracL's expllclL Lerms lncorporaLe relaLlonal norms (llke good falLh)
Lmphasls on Lx An1L (lmpacL of declslon down Lhe road) lnsLead of Lx
CS1 (looklng back aL clrcumsLances LhaL crafLed Lhe conLracL)
4 8eallsL 1heory
rlnclples of conLracL law found ln uCC arLlcle 2 and resLaLemenL second
of conLracLs
refer flexlble sLandards Lo be applled ln conLexL and glve courLs
dlscreLlon ln cases where rlgld appllcaLlon of rules appears Lo cause
O CourLs more wllllng Lo flll gaps or supply Lerms ln Lhe agreemenL

CourL applles subsLanLlve law of Lhe sLaLe noL uCC
lalnLlff coLLon farmers enLer lnLo conLracL wlLh sellers agree Lo purchase prlce
lrrespecLlve of whaL lL mlghL be aL harvesL Llme
4 AL harvesL Llme prlce shooLs up and plalnLlff farmers wanL ouL of Lhe conLracL
so Lhey can geL a beLLer prlce
4 advance" or forward" conLracL negoLlaLed prlor Lo planLlng
4 Lxperlenced farmers knew whaL Lhey were geLLlng Lhemselves lnLo and
whaLever causes Lhe markeL Lo go up/down has no bearlng on valldlLy of Lhe
8oLh parLles enLer lnLo Lhls conLracL ln order Lo manage rlsk
CourL Lakes sLrlcL vlew of conLracL lnLerpreLaLlon lL ls a blndlng conLracL beLween Lhe
parLles LhaL ls falr
4 Modern uCC 2613 delay or nondellvery by seller can be excused lf
performance as agreed has been made lmpracLlcable by occurrence of a
conLlngency Lhe nonoccurrence of whlch was a baslc assumpLlon on whlch Lhe
conLracL was made

O noL every promlse legally enforceable so you have Lo deLermlne when lL ls
4 uocLrlne of conslderaLlon helps us deLermlne Lhe enforceablllLy of promlses
O ConslderaLlon has evolved from more rlgld and classlcal form
O Cenerally Lhe formaLlon of a conLracL requlres a bargaln ln whlch Lhere ls a
manlfesLaLlon of muLual assenL Lo Lhe exchange and a conslderaLlon
O 8esLaLemenL Second 71
4 erformance or a reLurn promlse musL be bargalned for
4 erformance or reLurn promlse ls bargalned for lf lL ls soughL by Lhe promlsor ln
exchange for hls promlse and ls glven by promlsee ln exchange for LhaL promlse
4 erformance may conslsL of
AcL oLher Lhan a promlse or
orbearance or
CreaLlon modlflcaLlon or desLrucLlon or a legal relaLlon
4 erformance or reLurn promlse may be glven Lo Lhe promlsor or Lo some oLher
person lL may be glven by Lhe promlsee or by some oLher person
4 conslderaLlon lmplles LhaL someLhlng happened"le bargaln or exchange
4 CourL concerned wlLh leglLlmacy of LransacLlon ln lssue and uslng conslderaLlon
Lo reach approprlaLe resulL ln a case
ollclng of bargalnlng behavlor
4 ConslderaLlon ls essenLlal elemenL of conLracL and a promlse ls noL
recognlzed/enforced as conLracLual unless conslderaLlon has been glven for lL
PCWLvL8 obllgaLlon assumed wlLhouL conslderaLlon may be
enforceable under alLernaLlve Lheorles
O romlssory esLoppels
O 8esLlLuLlon
O Moral obllgaLlon
even Lhough you can declde Lhere ls lack of conslderaLlon Lhls may noL
mean Lhe person Lo whom lL ls owed ls wlLhouL remedy
O Lssence of Lhe docLrlne purely graLulLous promlse (one LhaL noL pald for" ln some way)
CAnnC1 be enforced as a conLracL
4 ConslderaLlon only an lssue when Lhere ls ouLsLandlng promlse Lo be enforced
does noL affecL valldlLy of an execuLed performance one LhaL has
already been compleLed
Cnce Lransfer compleLed Loo laLe Lo clalm LhaL no conslderaLlon was
4 2 Lypes of cases ln whlch conslderaLlon presenLs no problems (b/c lLs absence or
presence ls so obvlous)
uonaLlve promlse promlsor underLakes Lo make a fuLure glfL and asks
for and recelves noLhlng ln reLurn
O Pere lL ls absenL (promlse noL legally blndlng) no legal recourse
Commerclal exchange promlse purchased for an economlcally
equlvalenL prlce
O Cbvlous presence of conslderaLlon
O ueLrlmenL Lo Lhe promlsee lefL poorer ln some way because someLhlng ls glven Lo
O 8eneflL Lo promlsor recelpL of someLhlng from promlse
4 mlrror lmage of promlsee's deLrlmenL
O Ll1PL8 beneflL Lo promlsor C8 deLrlmenL Lo promlsee ls Lhe vlew of Lhe modern
4 we have expressly held LhaL a promlsee who has lncurred a speclflc bargalned
for legal deLrlmenL may enforce a promlse agalnsL Lhe promlsor noLwlLhsLandlng
Lhe facL LhaL Lhe laLLer may have reallzed no concreLe beneflL as a resulL of Lhe
bargaln" (29)
O 8argaln Lheory parLles musL have bargalned for (agreed Lo) exchange of Lhe promlse
for Lhe deLrlmenL
O 1hese Lwo Lheorles (beneflLdeLrlmenL and bargalnlng) may collapse lnLo Lhe same Lhlng
aL Llmes
4 Legal deLrlmenL rellnqulshmenL of a legal rlghL (lmporLanL elemenL ls Lhe
yleldlng of a legal rlghL)
4 C8MS
lmmedlaLe acL (dolng/glvlng someLhlng)
orbearance (refralnlng from someLhlng)
arLlal/compleLe abandonmenL of an lnLanglble rlghL
4 no dlsLlncLlon beLween lmmedlaLe sufferlng of deLrlmenL and commlLmenL Lo
suffer LhaL deLrlmenL aL a laLer Llme
4 lf requlremenL of conslderaLlon ls meL Lhere ls no addlLlonal requlremenL of
loss/advanLage Lo Lhe promlsee
4 ln mosL cases promlsee's deLrlmenL LranslaLes easlly lnLo a beneflL of promlsor
4 beneflL" seen as meanlng slmply Al goL whaL he bargalned for
4 uon'L necessarlly need Lo show recelpL of Langlble/economlcally valuable galn
4 8LS1A1LMLn1 SLCCnu 79(a) galn/advanLage Lo promlsor noL requlremenL
for conslderaLlon ([usL llke deLrlmenL for promlsee noL requlremenL elLher)
4 MusL be soughL by promlsor and glven by promlsee ln exchange for Lhe promlse
4 8argaln agreemenL manlfesLaLlon of muLual assenL Lo exchange promlses
performances or promlse for performance
uoes noL necessarlly suggesL parLles negoLlaLe back and forLh
O Slmply means agreemenL"
relaLlonshlp of convenLlonal lnducemenL each for Lhe oLher beLween
conslderaLlon and promlse" (30)
8LCl8CCAL lnuuCLMLn1
4 lncldenLal deLrlmenL ls noL bargalnedfor
4 WhaL abouL a condlLlon of glfL"
le manner ln whlch Lhe glfL ls Lo be used
courL's ablllLy Lo enforce a promlse llke Lhls ls easler lf courL can flnd ln
donee's underLaklng any promlse LhaL goes beyond Lhe slmple promlse Lo
use Lhe glfL for lLs lnLended purpose
4 ormal uncLlons
LvldenLlary provlde evldence of exlsLence and Lerms of a conLracL
CauLlonary make Lhe parLles aware Lhey have made a serlous legal
Channellng provlde ob[ecLlve basls Lo deLermlne LhaL promlse ls
conLracLual raLher Lhan a more generous lmpulse or LenLaLlve lnformal
expresslon of lnLenL
4 lf conslderaLlon only serves funcLlon of legal formallLy Lhls makes no sense
1here musL be some sorL of subsLanLlve basls for requlrlng lL
based on goals/pollcles of conLracL law
4 8easons for noL enforclng glfL promlses
ClfL promlses are sLerlle" and of llLLle commerclal uLlllLy
O LqulLles beLween donor/donee
4 uonee poLenLlally loses noLhlng excepL Lhe prospecL of a
CauLlonary funcLlon presence of conslderaLlon cauLlons promlsor LhaL
a legal duLy ls belng assumed lLs absence creaLes expecLaLlon LhaL Lhe
promlse can be revoked wlLhouL legal llablllLy
4 8easons for nC1 enforclng commerclal promlses wlLhouL conslderaLlon
8CMlSL was
O lnformal
O nonblndlng expresslon of lnLenL
O CLherwlse noL expecLed Lo creaLe a legal duLy
4 Means of pollclng for unfalr bargalnlng
ConslderaLlon used as means of refuslng Lo enforce a promlse LhaL was
exLracLed by unfalr/llleglLlmaLe means
KIRKSEY v. KIRKSEY {moving inconvenience] {PromiseJgift]
lalnLlff ls woman who moves afLer her broLher ln law Lells her he wlll provlde houslng
and land for her
AfLer Lwo years he makes her leave Lhe land and she had no house
AdequaLe conslderaLlon for Lhe promlse?
4 CourL sald Lhls was graLulLous promlse" (alLhough dlssenL says Lhere ls
deLrlmenL on parL of woman because she has Lo relocaLe)
4 CondlLlonal glfL lf you move l'll glve you houslng
CourL says Lhls lsn'L bargalnedfor"

HAMER v. SIDWAY {|ust say no] {Bargained for detriment]
uncle Lells nephew lf he glves up cerLaln vlces unLll hls 21
bday he wlll glve hlm $3000
nephew does whaL hls uncle acLs doesn'L collecL rlghL away uncle says wlll glve
nephew lnLeresL for walL and Lhen uncle dles and nephew has $0 nephew wlns
4 u says was noL harmed buL 8LnLl11Lu
4 Was beneflLLed ln any way?
4 In genera| wa|ver of |ega| r|ght at request of another |s suff|c|ent cons|derat|on
for a prom|se
4 Surrender of rlghL caused Lhe promlse and abandonmenL of use ls sufflclenL

LANCER v. SUPERIUR STEEL {repudiated pension] {Promissory Estoppel]
Company Lells LhaL he wlll recelve $100/monLh lf he doesn'L seek oLher employmenL
and sLays loyal 1hen u sLops paylng hlm CourL rules for
CraLulLous promlse or enforceable conLracL?
4 Pere have legal deLrlmenL LhaL was bargalnedfor
refra|ns from do|ng someth|ng he has |ega| r|ght to do (get another
lncurs deLrlmenL on Lhe falLh of Lhe promlse
4 rom|ssory estoppe| v|ew |n[ust|ce can on|y be avo|ded by enforcement of the
romlse Lo do someLhlng ln Lhe fuLure
vs equlLable esLoppel resLs upon sLaLemenL of presenL facL

ARA v. SUPREMA MEATS {promise of son to fatber]
faLher helps u son seL up buslness faLher becomes member of board son seeks hls
advlce abouL compensaLlon 8uslness becomes successful and faLher noL asked Lo
approve any more compensaLlon lncreases aLher sues for breach of conLracL Son
lf can argue Lhls was voLlng LrusL" Lhen can flnd conslderaLlon (facLs of case do noL
supporL Lhls however)
CourL says son's promlse Lo faLher was graLulLous promlse lacklng conslderaLlon
4 ln Lyplcal bargaln conslderaLlon and Lhe promlse bear a reclprocal relaLlon of
moLlve or lnducemenL (conslderaLlon lnduces Lhe maklng of Lhe promlse and Lhe
promlse lnduces Lhe furnlshlng of Lhe conslderaLlon)
Can'L conslder someLhlng conslderaLlon lf promlse already fulfllled
4 CA courLs Lalk abouL conslderaLlon ln llghL of bargalnedfor exchange"
conslderaLlon musL resulL from a bargaln"
4 lf no expecLaLlon of paymenL by elLher parLy when Lhe servlces were rendered
Lhe promlse ls a mere promlse Lo make a glfL and noL enforceable"
romlse noL Lo lncrease salary wlLhouL approval was unsollclLed by son
4 (faLher lndlcaLed son was free Lo re[ecL hls advlce)
4 Gratu|tousd|dn't expect anyth|ng from h|s adv|cewas father hop|ng to
|nduce another performance? No

O ConslderaLlon docLrlne does noL requlre LhaL Lhe performance or promlses exchanged
be of equal value
4 kestatement Second 79(b) as |ong as a |ega| detr|ment has been suffered
the court does not |nqu|re |nto |ts va|ue |n re|at|on to the prom|se
4 poss|b|e to have exchange of a s|ng|e prom|se]performance for mu|t|p|e ones
by other party
4 ower of contract|ng part|es to determ|ne the|r own ob||gat|ons
O e tbot cot wl oot lople loto oJepocy of cooslJeotloo ls boseJ oo polcy of
eofocloq tbe vootoy excbooqe oo tbe tes oqeeJ by tbe potles
4 once conslderaLlon ls deLermlned courL should noL secondguess value placed
on Lhe exchange by Lhe parLles
O Can be used Lo make lnferences abouL parLles' moLlves (why Lhey dld whaL Lhey dld)
O 1hls prlnclple makes sense when agreemenL ls resulL of falr bargalnlng parLles bear
responslblllLy for seLLlng Lhe value of Lhe exchange
4 ulsparlLy ln value can be resulL of
oor [udgmenL
lnaccuraLe cosL calculaLlons
8ad luck ln markeL predlcLlons
uellberaLe underprlclng
O Pow Lo proLecL parLles from bad bargalnlng"?
4 le agreed exchanges whlch ln reLrospecL lnvolve maLerlally dlsparaLe values?
4 Cne approach flnd exchange noL bargalned for because Lhe promlsor noL aware
of dlsparlLy and dld noL bargaln for lL
4 AnoLher approach lf Lhere was bargalned for exchange examlne Lhe quallLy of
Lhe bargalnlng process LhaL preceded agreemenL (fraud/duress eLc)
dlsparlLy resulLs ln oppresslve or underhanded bargalnlng or [usLlflable
mlsLake (fraud duress eLc)
CourL can elLher overLurn Lhe LransacLlon C8 ad[usL lLs Lerms Lo equallze
4 lf conslderaLlon glven for a promlse has so small a value ln relaLlon Lo Lhe
promlse LhaL lL ls obvlously nomlnal may fall Lo saLlsfy requlremenL of exchange
and be lnsLead vlewed as a glfL"
4 docLrlne of unconsclonablllLy" process where Lhere ls no fraud duress or
mlsLake buL unfalr surprlse" and oppresslon"
conLracLs of adheslon" form conLracLs drafLed excluslvely by one parLy
and offered Lo oLher on Lake lL or leave lL basls
O Adequacy of conslderaLlon sub[ecL Lo Lhese Lwo excepLlons
O A person promlslng a glfL may reallze LhaL conslderaLlon ls needed Lo valldaLe a promlse
4 romlsor may falsely reclLe LhaL conslderaLlon has been recelved (sham
conslderaLlon) C8 may provlde for nomlnal deLrlmenL Lo be glven by promlssee
O 8esLaLemenL Second says
4 AsserLs general rule LhaL courLs should noL enqulre lnLo adequacy of
4 ALSC says LhaL preLense of a bargaln does noL saLlsfy Lhe exchange elemenL so
LhaL a false conslderaLlon whlch does noL ln facL lnduce Lhe reLurn promlse
should noL be LreaLed as sufflclenL
O Nom|na| or sham cons|derat|on may be treated as |nsuff|c|ent |f c|rcumstances suggest
that the prom|sor needs protect|on from generos|ty |mpu|s|veness or unfa|r
O C1lCn promlse Lo keep an offer open (aka noL Lo revoke lL) for a speclfled perlod of
4 MusL have conslderaLlon Lo be blndlng on Lhe promlsor
4 8ecause an opLlon ls granLed Lo lnduce Lhe granLee Lo enLer a conLracL deslred
by Lhe granLor Lhe common law more readlly accepLs nomlnal conslderaLlon Lo
valldaLe opLlons

APFEL v. PRUDENTIAL-BACHE SECURITIES {adequacy of consideration]
sells compuLer sysLem Lo u u sLops paylng because ldea was noL novelLherefore
no conslderaLlon for Lhe conLracL conveyed Lhelr rlghL Lo Lhe Lechnlque and Lrade
names for program and u had agreed Lo pay a sLlpulaLed raLe us obllgaLlon Lo pay was
Lo remaln even lf Lechnlques became publlc knowledge or sLandard pracLlce ln lndusLry
u clalms Lhe ldea was noL novel even aL Lhe Llme of Lhe selllng (and Lherefore was never
s Lo sell) wanLs compensaLlon and punlLlve damages (breach of conLracL eLc)
ueclslve quesLlon for courL ls wheLher sale agreemenL LACkLu CCnSluL8A1lCn
4 ls novelLy requlred Lo valldaLe Lhe conslderaLlon for Lhe conLracL?
CDk1 SAS part|es to contract free to make barga|n even |f cons|derat|on
exchanged |s gross|y unequa| or of dub|ous va|ue
4 u dld geL beneflL (for whole year lL was Lhe only flrm Lo have Lhe sysLem)
ConLlnued Lo make paymenLs Lo for Lwo years whlch shows Lhey
acknowledged lL had value Lo Lhem
4 Lack of nove|ty does not demonstrate |ack of va|ue
4 ;uest|on of whether |dea had rea| va|ue to buyer and |s thus va||d
4 ldea was boLh bargalned for and had value
MandaLory A legal rule LhaL ls noL sub[ecL Lo conLrary agreemenL (le bullL speclflcally
lnLo Lhe conLracL)
uefaulL A legal prlnclple LhaL fllls a gap ln a conLracL ln Lhe absence of an appllcable
express provlslon buL remalns sub[ecL Lo a conLrary agreemenL

IN RE CREENE {companion's support]
now bankrupL man belng sued by former mlsLress Pe used Lo glve her loLs of $$
oundaLlon of clalm ls a wrlLLen lnsLrumenL under seal whlch mlsLress alleges ls blndlng
conLracL 1he wrlLLen lnsLrumenL promlses Lo pay woman money each monLh a llfe
lnsurance pollcy and pay renL on her aparLmenL ConslderaLlon for Lhe documenL of $1
by Lhe woman Lo man and oLher goods and valuable conslderaLlons" (not good reason
because |t was |n the pastcontracts on|y for future prom|ses)
CCu81 SA?S lssue of wheLher Lhere was any conslderaLlon for Lhe bankrupL's promlses
aparL from Lhe pasL cohablLaLloncourL doesn'L see any
4 $1 ls nomlnal (when compared Lo Lhe hundreds of Lhousands of dollars Lo be
pald by Lhe man)
4 8elease from clalms noL valld conslderaLlon (man sald he would marry her Lhen
wenL back on lL)
4 Lmphasls on Lhe facL LhaL Cl1S A8L nC1 CCn18AC1S

FIECE v. BUEHM {fatber's promised support]
sues u Lo recover for breach of conLracL Lo pay expenses assoclaLed wlLh blrLh of
basLard chlld ConLracL was Lo provlde supporL for Lhe basLard chlld as long as moLher
dld noL lnsLlLuLe basLardy proceedlngs agalnsL hlm agreed Lo pay medlcal/mlsc
expenses 1urns ouL he ls noL Lhe faLher so he sLops maklng paymenLs
u says even lf he dld enLer lnLo conLracL lL ls noL enforceable because s forbearance Lo
prosecuLe was noL based on valld clalm (hence no conslderaLlon)
CDk1 SAS |n order to support comprom|se |t |s suff|c|ent that the part|es enter|ng
|nto |t thought at the t|me that there was a bona f|de quest|on between them
a|though |t may eventua||y be found there was |n fact no quest|on
4 Woman acLed ln good falLh aL Lhe Llme of Lhe conLracL forbearance Lo sue for a
lawful clalm/demand ls sufflclenL conslderaLlon for a promlse Lo pay for Lhe
forbearance lf Lhe parLy forbearlng has honesL and wellfounded lnLenLlons
4 no proof of fraud or unfalrness ( made charge of basLardy agalnsL u ln good
4 CourL upholds Lhe conLracL
When ls foregone clalm a leglLlmaLe conslderaLlon? nonest and reasonab|e be||ef
4 kestatement Second 74 forbearance Lo asserL or Lhe surrender of a clalm of
defense whlch proves Lo be lnvalld ls noL conslderaLlon unless
Lhe clalm/defense ls ln facL doubLful because of uncerLalnLy as Lo Lhe
facLs of law C8
Lhe forbearlng/surrenderlng parLy belleves LhaL Lhe clalm or defense may
be falrly deLermlned Lo be valld
new approach says elLher ls enough
ooo ow ecoqolzeJ tbot fobeoooce of eqo cols ls sfflcleot cooslJeotloo to
sppot o cootoct
Modern common |aw courts began ho|d|ng that the forbearance of even an |nva||d
c|a|m was suff|c|ent cons|derat|on to support a contract prov|ded that at the t|me of
the contract|ng the party be||eved the c|a|m was potent|a||y va||d
4 orbearance of a legal clalm ls llke refralnlng from acLlng upon a legal rlghL (legal
uuLy Lo dlsclose problems avolded lf parLles compleLely honesL wlLh each oLher?
uuress/blackmall as posslble defense? arLy enLers lnLo conLracL because of duress

ueflnlLlon an agreemenL Lo dlscharge an exlsLlng obllgaLlon and an agreemenL Lo
modlfy an exlsLlng conLracL may have conslderaLlon lmpllcaLlons 1he rule ls LhaL Lhe
performance or Lhe promlse Lo perform a preexlsLlng duLy does noL consLlLuLe
Common law (classlc)
4 MusL be someLhlng new new obllgaLlon new deLrlmenL eLc
4 Lvolved Lo Lhe polnL where nomlnal conslderaLlon was enough
1reaLed all conLracLs ln exacLly Lhe same way (keep conslderaLlon pure")
Modern]Ma[or|ty v|ew
4 No cons|derat|on needed
kestatement second "mod|f|cat|on |s fa|r and equ|tab|e |n v|ew of
c|rcumstances not ant|c|pated by the part|es when the contract |s
4 D says an agreement mod|fy|ng contract needs no cons|derat|on to be
O Cne does noL suffer deLrlmenL by dolng or promlslng Lo do someLhlng LhaL one ls
already obllged Lo do C8
O 8y forbearlng Lo do someLhlng LhaL ls oeoJy foblJJeo
4 erformance of or promlse Lo perform a preexlsLlng duLy ls noL conslderaLlon
O reexlsLlng duLy rule only applles lf Lhe performance of Lhe promlsee ls compleLely
encompassed by Lhe preexlsLlng duLy
4 lf you Lhrow ln someLhlng exLra (llke a pack of underwear) Lhls ls sufflclenL Lo
consLlLuLe conslderaLlon ln second agreemenL (new lncrease ln deLrlmenL)
4 econom|c equ|va|ence |s not norma||y requ|red |n the exchange
4 Coerced modlflcaLlon afLer conLracL made one of Lhe parLles Lakes advanLage
of Lhe oLher's dependence on hls performance by LhreaLenlng Lo breach Lhe
conLracL unless Lhe oLher promlses Lo lncrease her paymenL or oLher reLurn
CourL employs preexlsLlng duLy rule Lo vold Lhe modlflcaLlon
4 2 shorLcomlngs
romlsee who knows of Lhe rule can evade lL slmply by addlng some
mlnor new deLrlmenL Lo hls slde of Lhe exchange
8ule covers all modlflcaLlons LhaL are leglLlmaLely agreed Lo
4 uCC has abollshed Lhls rule and replaced lL wlLh 2209
good falLh LesL"
4 Compromlse of dlspuLed clalm
4 When conslderaLlon ls Lhe forbearance of a clalm or defense courLs do Lo some
exLenL enqulre lnLo Lhe adequacy of conslderaLlon by problng lnLo Lhe
leglLlmacy of Lhe dlspuLe
4 estoteeot 5ecooJ 74 adopLs sub[ecLlve/ob[ecLlve sLandard
Clalm/defense musL be ob[ecLlvely reasonable
O Sub[ecL Lo reasonable doubL because of uncerLalnLy ln facL/law
O C8
arLy ls sub[ecLlvely ln good falLh
O arLy asserLlng clalm musL have an honesL bellef ln lLs merlLs
some courLs requlre LhaL boLh of Lhese may be meL
O LeglLlmacy of clalm musL be deLermlned as aL Lhe daLe of Lhe
agreemenL noL laLer evenLs

ALASKA PACKERS' ASSUCIATIUN v. DUMENICU {sailors' salary increase]
hlres u Lo flsh for salmon ln Alaska and reLurn Agree on salary before u leaves Whlle
ln Alaska u sLop work and demand more $$ oLherwlse Lhey leave and has no one else
Lo flsh salmon for Lhem SuperlnLendanL glves lnLo demands upon reLurn u Lold Lhey
would be pald orlglnal amounL agreed Lo u recelve [udgmenL ln dlsLrlcL courL CL of
appeals reverses
C modlflcaLlon supporLed by sufflclenL conslderaLlon?
4 u wlLhouL valld cause sLopped worklng consenL Lo such demand ls wlLhouL
conslderaLlon Lhey were already under conLracL Lo render Lhelr servlces
4 Can have posslblllLy for volunLary walver" on Lhe parL of Lhe buL courL flnds
none here
4 parLy who refuses Lo perform and Lhereby coerces a promlse from Lhe oLher
parLy Lo Lhe conLracL Lo pay hlm an lncreased compensaLlon for dolng LhaL whlch
he ls legally bound Lo do Lakes an un[ust|f|ab|e advantage of the necess|t|es of
the other party"
4 lshermen have 8LLxlS1lnC uu1?
ls Lhls |mmutab|e ru|e?
4 lmmuLable rule permanenL noL changlng (llke mandaLory)
4 Can argue based on clrcumsLances also uCC allows modlflcaLlon ln vlew of
unanLlclpaLed clrcumsLances
kestatement second 89
D 2209 does noL requlre conslderaLlon buL does requlre good falLh ln Lhe change

ANCEL v. MURRAY {waste collector]
u provldes clLy wlLh Lrash collecLlon servlce Lo clLy ClLy sues for repaymenL of
addlLlonal $$ LhaL u demanded for hls servlces u asked for lncrease because of
lncreased cosLs of collecLlon of 400 addlLlonal homes ClLy orlglnally agreed Lo pay Lhe
addlLlonal amounLs
CCu81 SA?S lssue ls wheLher Lhe addlLlonal paymenLs were lllegal because Lhey were
noL supporLed by conslderaLlon
4 ourt's def|n|t|on of preex|st|ng duty ru|e an agreemenL modlfylng a conLracL
ls noL supporLed by conslderaLlon lf one of Lhe parLles Lo Lhe agreemenL does or
promlses Lo do someLhlng LhaL he ls legally obllgaLed Lo do or refralns or
promlses Lo refraln from dolng someLhlng he ls noL legally prlvlleged Lo do
4 courLs wlll noL enforce an agreemenL LhaL has been procured by coerclon or
duress and wlll hold Lhe parLles Lo Lhelr orlglnal conLracL regardless of wheLher lL
ls proflLable or unproflLable
4 CourLs heslLanL Lo apply preexlsLlng duLy rule when a parLy Lo a conLracL
encounLers unanLlclpaLed dlfflculLles and oLher parLy noL lnfluenced by
coerclon/duress volunLarlly agrees Lo pay Lhe addlLlonal compensaLlon
4 NLW kDLL ALIL courLs should enforce agreemenLs modlfylng conLracLs
when unexpecLed or unanLlclpaLed dlfflculLles arlse durlng Lhe course of Lhe
performance of a conLracL even Lhough Lhere ls no conslderaLlon for Lhe
modlflcaLlon as long as Lhe parLles agree volunLarlly
D 2209 an agreemenL modlfylng a conLracL for Lhe sale of goods
needs no conslderaLlon Lo be blndlng
O annot use bad fa|th to escape contract terms
O 1he extort|on of a mod|f|cat|on w|thout |eg|t|mate commerc|a|
reason |s |neffect|ve
O A mere techn|ca| cons|derat|on does not support a mod|f|cat|on
|n bad fa|th
MusL meeL LesL of good falLh (Lhls LesL also relLeraLed ln 8esLaLemenL
Second 89u)
ModlflcaLlon musL be made before conLracL fully performed
4 8ule for garbage collecLor

O lf promlsee suffered Lhe deLrlmenL before Lhe promlse was made lL cannoL be sald LhaL
Lhe deLrlmenL was exchanged for Lhe promlse
4 AlLhough deLrlmenL may have lnduced Lhe promlse lL was noL lLself lnduced by
Lhe promlse whlch had noL yeL been made
4 le lf someone makes a promlse Lo compensaLe anoLher for some prlor
performance LhaL prlor deLrlmenL cannoL be conslderaLlon for Lhe promlse
promlse seen as graLulLous and nonblndlng
O rlor deLrlmenL referred Lo as AS1 CCnSluL8A1lCn

Mutua||ty of Cb||gat|on
4 le conslderaLlon on 8C1P sldes
4 boLh parLles musL be bound no free way ouL"
O unllaLeral conLracL promlse exchanged for lmmedlaLe performance resulLlng ln a
unllaLeral conLracL ln whlch only Lhe promlsor has an ouLsLandlng obllgaLlon aL Lhe
lnsLanL of conLracL formaLlon
O muLuallLy" does noL mean
4 8oLh parLles musL make fuLure commlLmenL
4 8oLh parLles have equal and coexLenslve obllgaLlons under Lhe conLracL
4 no need for economlc equlvalence ln Lhe exchange
O WhaL does muLuallLy" mean?
4 When conslderaLlon conslsLs of Lhe exchange of muLual promlses Lhe
underLaklngs on boLh sldes musL be 8LAL and MLAnlnCuL
O lllusory" really promlse noLhlng
4 Cr lf promlsor reLalns unllmlLed dlscreLlon Lo perform
4 8ememberlllusory absence of commlLmenL
4 promlse Lo use besL efforLs"
le lf someone needs Lo secure a loan ln order Lo fulflll promlse Lo
purchase someLhlng
4 comparable Lo JooJ v lcy
Cardozo lmplled obllgaLlon Lo use besL efforLs Lo valldaLe an excluslve
deallng conLracL beLween Lhe parLles
Lucy breached Lhe excluslve agency and endorsed producLs on her own
and kepL Lhe proflLs
O Wood sues for hls share
O Lucy argues no conLracL
CourL concludes Lucy's granL of an excluslve agency necessarlly gave rlse
Lo Lhe lmpllcaLlon LhaL Wood was obllged Lo use besL efforLs ln
generaLlng proflLs
4 uCC 2306(2) lmplles an obllgaLlon of besL efforLs ln excluslve deallng
conLracLs lnvolvlng goods
4 ln some slLuaLlons lL may sulL Lhe parLles Lo leave Lhe CuAn1l1? of goods open
ended on Lhe undersLandlng LhaL Lhe quanLlLy Lo be supplled under LhaL conLracL
wlll be deLermlned elLher by buyer's requlremenLs or by seller's ouLpuL
1hls ls Cu1u1 CCn18AC1
Seller wlshes Lo dlspose of lLs full producLlon ln one LransacLlon and Lhe
buyer ls confldenL LhaL lL can use all Lhe seller can supply
4 requlremenLs conLracL" buyer promlses Lo buy and Lhe seller Lo supply Lo
buyer's LoLal demand for (le) grapes durlng a speclfled perlod
4 ouLpuL conLracL" beLLer sulLs parLles' needs lf buyer knows lL can use
everyLhlng LhaL Lhe seller produces (le Lhe grapes)
Seller promlses Lo sell and buyer Lo Lake all Lhe grapes grown by Lhe seller
durlng a speclfled perlod
4 roblems of vagueness and lack of muLuallLy were solved by recognlzlng LhaL
even lf Lhe conLracL dld noL say so expressly Lhe dlscreLlon Lo deLermlne
quanLlLy ls llmlLed by an lmplled obllgaLlon of good falLh/reasonableness and by
an lmplled obllgaLlon of exc|us|ve dea||ng
obllgaLlon of excluslve deallng"
O essenLlal for an arrangemenL Lo quallfy as a requlremenLs" or
ouLpuL" conLracL
O Lven lf noL expllclLly sLaLed posslble Lo lmply lf from Lhe language
of Lhe conLracL ln conLexL
4 uCC 2306(1) lmposes boLh good falLh and reasonable expecLaLlons LesL on
parLy who deLermlnes quanLlLy
CCCu Al1P S1AnuA8u
O 1201 honesLy ln facL ln Lhe conducL or LransacLlon
4 lf a parLy ls a merchanL
2103(1)(b) lmposes hlgher sLandard whlch ls boLh
sub[ecLlve and ob[ecLlve LesL
O noL only honesLy ln facL buL also Lhe
observance or reasonable commerclal
sLandards of falr deallng ln Lhe Lrade"
O revlslon of ArLlcle 1 and 2 abandon
merchanL dlsLlncLlon
4 8LMLM8L8 when dlscernlng Lhese dlsLlncLlons
8oLh parLles Lo requlremenLs" or ouLpuL"
conLracL are Lyplcally merchanLs so mlxed
sub[ecLlveob[ecLlve sLandard wlll apply
ulS8CC81lCnALl1? S1AnuA8u
O 2306 also seLs ouL a LesL of proporLlonallLy
4 lf parLles' expecLaLlons of quanLlLy are based on a sLaLed
esLlmaLe or a normal or oLherwlse comparable prlor
ouLpuL or requlremenL Lhe quanLlLy Lendered or
demanded cannoL be unreasonably dlsproporLlonaLe Lo
whaL has been esLlmaLed or cusLomary
4 SeLs level of expecLaLlon abouL Lhe approxlmaLe quanLlLy
Lo be supplled
4 esLlmaLed level C8 prlor deallngs can esLabllsh Lhls
O LlMl1A1lCn courLs have generally conflned Lhls LesL Lo
lnC8LASLS ln demand or ouLpuL (noL Lo decreases)
4 lf buyer's requlremenLs or seller's ouLpuL ls less Lhan
esLlmaLed/cusLomary level only good falLh LesL applles
O An uncerLaln fuLure evenL wlLhln Lhe realm of posslblllLy and ouLslde Lhe compleLe and
dlscreLlonary conLrol of Lhe promlsor
4 Legal deLrlmenL ls suffered even Lhough Lhe obllgaLlon Lo perform Lhe promlse
only comes lnLo effecL upon fulflllmenL of Lhe condlLlon
O condlLlon of saLlsfacLlon" condlLlon LhaL allows one of Lhe parLles Lo re[ecL a
performance by Lhe oLher lf he ls noL saLlsfled wlLh lL
4 arLy who deLermlnes saLlsfacLlon sLlll musL do so ln good falLh C8 reasonably
O 8uLL C 1PuM8
4 ulssaLlsfacLlon musL be ln good fa|th where Lhe performance lnvolves a maLLer
of personal LasLe buL lL musL be reasonab|e where Lhe performance ls of a
Lechnlcal mechanlcal or commerclal naLure
O form of dlscreLlonary promlse
O noLhlng ob[ecLlonable ln permlLLlng a parLy Lo selecL beLween alLernaLlve promlses
4 le pay $100 or mow Lhe lawn for Lwo monLhs
O 8C8LLM one of Lhe alLernaLlves lmposes so small a burden on Lhe parLy who has Lhe
cholce LhaL lL would noL llkely have lnduced Lhe promlse on lLs own
4 le pay $100 or noLlfy or cancellaLlon of sale

REHM-ZEIHER CU v. FC WALKER CU {insufficient wbiskey]
ls corporaLlon LhaL sells whlskey u operaLed a dlsLlllery ConLracL quoLas Lo be meL
for cerLaln years wlLh sLlpulaLlons lf dlsLlllery loses whlskey ln flre Lhey are excused
from quoLa lf corporaLlon can'L use full amounL Lhey ordered dlsLlllery releases Lhem
from Lhe conLracL u doesn'L furnlsh wlLh enough whlskey so Lhey sued
CCu81 SA?S lower courL rules for u saylng Lhere was no muLuallLy of obllgaLlon
4 ln prevlous years dld noL demand full amounL of whlskey buL when prlce
shooLs up wanLs Lo see more
4 unforeseen reason" ln 's parL of conLracL poses problems b/c corp can relleve
lLself for whaLever reason
no llmlLaLlon on Lhls clause
4 ln conLracL cases llke Lhls looklng Loward fuLure alLhough quanLlLy under
conLracL noL measured by any cerLaln sLandard lL should be capable of
approxlmaLely accuraLe forecasL
1hls noL Lhe case here
4 lf facLs had been oLher way around dlsLlllery would noL be able Lo enforce
agalnsL corp
plead unforeseen reason"
4 seeklng Lo enforce conLracL LhaL was never blndlng upon Lhem
4 lllusory promlse here
4 never use conslderaLlon Lo deLermlne Lhe falrness" of a k
1here ls no value ln a promlse lf only one parLy ls bound
1oday th|s wou|d be enforceab|e because you can prove |f someth|ng |s foreseen or

MCMICHAEL v. PRICE {sand requirements contract]
(rlce) sand company sues u for breach of conLracL rovlslons of conLracL lncluded
flrsL parLy agrees Lo purchase and accepL from second parLy all sand of varlous grades
provlded LhaL Lhe sand ls comparable Lo oLher sand sold by oLher companles lrsL parLy
pays 60 of markeL prlce of sand
u says Lhe conLracL was revocable offer" and noL valld and blndlng conLracL of purchase
and sale because no muLuallLy
4 CbllgaLlon Lo buy/sell musL be muLual Lo render conLracL blndlng
4 bound Lo purchase all sand he was able Lo sell from u
CCu81 SA?S lnLenL of parLles Lo enLer lnLo conLracL LhaL was muLually blndlng
4 8ule for
lf boLh parLles are able Lo breach Lhen Lhere ls no muLuallLy of obllgaLlon
buyer and seller musL use besL efforLs"
UCC -: requirementJoutput contract
Lhls ls a requlremenL conLracL
4 quanLlLy of goods sold ls deLermlned by buyer's needs
ouLpuL conLracL duLy on buyer Lo buy everyLhlng LhaL seller produces
4 emphasls on whaL seller ls produclng as opposed Lo whaL buyer acLually needs
boLh requlre parLles Lo acL ln good falLh and can be no reasonably dlsproporLlonaLe

WUUD v. LUCY, LADY DUFF-CURDUN {output contract for product endorsements]
has Lhe rlghL Lo puL us endorsemenLs on Lhe deslgns or oLhers has excluslve rlghL Lo
place her deslgns on sale and llcense oLhers Lo markeL Lhem ln reLurn u geLs half of all
proflLs and revenues from Lhese conLracLs says u broke her end of Lhe conLracL by
placlng her endorsemenL on sLuff wlLhouL hls knowledge and wlLhheld Lhe proflLs
u says Lhe agreemenL lacks elemenLs of Lhe conLracL does noL blnd hlmself Lo
4 CourL says a promlse ls falrly lmplled
Lo use reasonable efforLs Lo markeL us sLuff
4 besL efforLs" Lrylng Lo do hls besL
CourLs flndlng of elemenLs of promlse
4 u gave excslve prlvllege (u was Lo have no rlghL for a year Lo place her own
endorsemenLs or markeL her own deslgns excepL Lhrough Lhe agency of )
4 Modern uCC2306(2)
4 unless gave efforLs u could noL geL anyLhlng

ls real esLaLe developmenL corp wanLs Lo buy real esLaLe LhaL Clarks are selllng
Clarks demand LhaL Lhere be furLher conslderaLlon ln Lhe naLure of Cmnl's agreemenL
Lo make cerLaln lmprovemenLs on ad[acenL land noL belng offered for sale Cmnl Lells
Clarks LhaL Lhey are foregolng feaslblllLy sLudy LhaL Lhe earnesL money agreemenL
demands LaLer flnd LhaL Lhe properLy ls noL exacLly 32 acres 1hen Clarks declde Lhey do
noL wanL Lo proceed wlLh Lhe sale
argues aL courL LhaL by maklng lLs obllgaLlons sub[ecL Lo a feaslblllLy sLudy Cmnl
rendered lLs promlse Lo buy Lhe properLy lllusory
4 Cmnl argues LhaL because condlLlon was for lLs beneflL lL could walve lL and
enforce Lhe agreemenL as wrlLLen
CCu81 SA?S Cmnl's promlse noL lllusory
4 8uLL promlse for a promlse ls sufflclenL conslderaLlon Lo supporL a conLracL
4 ln nelLher of Lhe condlLlons lmposed by Lhe Clarks was Lhe promlsor's promlse
4 PCLu condlLlon precedenL Lo Cmnl's duLy Lo buy requlrlng recelpL of a
saLlsfacLory" feaslblllLy reporL does noL render Cmnl's promlse Lo buy Lhe
properLy lllusory
lf you are a seller whaL would you expecL buyer Lo do?
4 CeL a feaslblllLy sLudy so you know Lhey are serlous
4 lllusory promlse lf a parLy ls free Lo perform or Lo wlLhdraw from Lhe agreemenL
aL hls own unresLrlcLed pleasure Lhe promlse ls deemed lllusory and lL provldes
no conslderaLlon
4 eaLures ln a conLracL can be volded as long as Lhey are noL maLerlal feaLures
LhaL allowed Lhe parLy Lo breach Lhe conLracL wlLhouL obllgaLlon
reservlng muLuallLy of obllgaLlon ls Lhe prlmary goal
?ou can walve someLhlng ln a conLracL LhaL ls beneflclal Lo you as long as
lL doesn'L hurL Lhe oLher parLy

urpose of resLlLuLlon ls resLoraLlon of an unfalr galn (one parLy obLalns beneflL aL Lhe
expense of anoLher under clrcumsLances LhaL make lL unfalr for Lhe reclplenL Lo reLaln
Lhe beneflL wlLhouL paylng for lL)
un[usL enrlchmenL ls a cause of acLlon LhaL glves rlse Lo a remedy
kest|tut|on ls Lhe acL of resLorlng someLhlng or lLs value
4 8eclplenL of beneflL ls obllged Lo glve back LhaL beneflL or pay lLs value Lo Lhe
person LhaL conferred lL
4 8asls reclplenL has been un[usLly enrlched aL Lhe expense of Lhe granLor (no
legal [usLlflcaLlon for reLenLlon of beneflL wlLhouL pay)
When elemenLs of cause of acLlon for un[usL enrlchmenL saLlsfled Lhen 8LS1l1u1lCn ls
un[usL enrlchmenL serves as an lndependenL Lheory of llablllLy ln cases when no
conLracL has come lnLo exlsLence elLher because someLhlng wenL wrong or falled Lo
happen ln Lhe process of formaLlon or because Lhe parLles slmply dld noL aLLempL Lo
make a conLracL
4 ?eL Lhere was some sorL of lnLeracLlon LhaL resulLed ln a galn by one parLy
4 no basls for conLracLual rellef 8u1 un[usL enrlchmenL permlLs resLlLuLlonary
sldenoLe someLlmes can have valld conLracL buL lL ls breached can ask for
resLlLuLlon because lL may be beLLer opLlon for Lhem aL LhaL polnL le expecLaLlon can'L
be proved aL LhaL polnL
8ange of resLlLuLlonal remedles
4 8esLlLuLlon as an alLernaLlve remedy when a valld conLracL has been breached
4 8esLlLuLlon when a beneflL ls conferred pursuanL Lo an lnvalld or unenforceable
4 8esLlLuLlon when a beneflL ls conferred on Lhe sLrengLh of a promlse wlLhouL
4 8esLlLuLlon ln cases when no conLracLual lnLeracLlon occurred
Quasi-Contract - A Contract "Implied in Law"
lmporLanL Lo remember LhaL Lhls ls noL a real conLracL
4 Legal lmpllcaLlon ls a flcLlon creaLed for remedlal purposes
Ceneral prlnclple of un[usL enrlchmenL when a beneflL has been conferred on a
reclplenL under clrcumsLances ln whlch lL ls unfalr Lo permlL hlm Lo reLaln lL wlLhouL
paymenL Lhe cause of acLlon of un[usL enrlchmenL ls avallable Lo Lhe person who
conferred Lhe beneflL
4 Conferrer can clalm resLlLuLlon (under whlch Lhe courL wlll resLore Lhe beneflL or
lLs value Lo her)
value of defendanL's galn and noL deLrlmenL lncurred by plalnLlff ls
4 8ased on Lhe flcLlon LhaL Lhe beneflL had been conLracLed for
le courL lmplled a conLracL ln law even Lhough no conLracLual
relaLlonshlp acLually exlsLed beLween conferrer and beneflclary
CuASl CCn18AC1 ls Lhe name for Lhls form of rellef
noL a conLracL buL an obllgaLlon lmposed by law for Lhe purpose of brlnglng abouL
[usLlce and equlLy wlLhouL reference Lo Lhe lnLenL or Lhe agreemenL of Lhe parLles and
ln some cases ln splLe of an agreemenL beLween Lhe parLles
4 non conLracLual agreemenL LreaLed procedurally as a conLracL
4 uefendanL recelves beneflL
4 AppreclaLlon/knowledge by defendanL of beneflL
4 under clrcumsLances LhaL would make lL un[usL for Lhe defendanL Lo reLaln Lhe
beneflL wlLhouL paylng for lL
Quasi-Contract Distinguisbed From a Contract Implied in Fact
ConLracL lmplled ln law ls an acLual conLracL
4 no dlfference ln Lhe legal naLure or effecL of an express conLracL and a conLracL
lmplled ln facL
only dlfference ls manner and evldence of conLracL formaLlon
4 Lxpress conLracL parLles arLlculaLe agreemenL ln wrlLLen or oral words
4 ConLracL lmplled ln facL parLles do noL express agreemenL ln words buL lL ls
apparenL from a reasonable lnLerpreLaLlon of Lhelr conducL vlewed ln conLexL
LhaL Lhey lnLended Lo make a conLracL
Elements of Un|ust Enricbment
4 Lconomlc beneflL
8ecelvlng goods/servlces/neL galn
Can also be slLuaLlon where Lhere ls no longLerm flnanclal advanLage (le
geLLlng a bag of preLzels)
Cccurs whenever someLhlng of value ls recelved even lf lL does noL
dlrecLly enlarge Lhe reclplenL's neL worLh
When ls enrlchmenL un[usL?
4 !usLlce only offended lf Lhe conferral of Lhe enrlchmenL meeLs Lwo crlLerla
ClalmanL musL have lnLended Lo charge for lL
MusL noL have lmposed lL on Lhe reclplenL
4 lnLenL Lo charge
LnrlchmenL nC1 un[usL lf beneflL conferred wlLh graLulLous lnLenL
Measured by Lhe manlfesLaLlon of Lhe conducL of Lhe person conferrlng
Lhe beneflL ln llghL of all Lhe clrcumsLances
O 8eclplenL's reasonable expecLaLlons should be proLecLed
1ake lnLo conslderaLlon Lhe relaLlonshlp of Lhe beneflL Lo Lhe
Lrade/professlon of Lhe conferrer when declded wheLher Lhere was
graLulLous lnLenL
O le docLor v lay person admlnlsLerlng medlcal aLLenLlon
4 lmposlLlon
8eneflL noL offlclous lf lL was requesLed by Lhe reclplenL
When beneflL has noL been requesLed by Lhe reclplenL lL ls llkely Lo be
offlclous unless Lhere was some good reason Lo confer Lhe unaskedfor
O usually saLlsfled ln emergency slLuaLlon
O 1he greaLer Lhe urgency and Lhe more aL sLake Lhe more llkely
LhaL unrequesLed acLlon wlll be [usLlfled
Measurement of Benefit
1he 8emedlal Alm of 8esLlLuLlon
4 ulfferenL from conLracL
ConLracLual damages are based on Lhe breach vlcLlm's expecLed galns
under Lhe conLracL and are calculaLed Lo approxlmaLe Lhe moneLary value
of Lhe beneflL LhaL he or she would have reallzed had Lhe conLracL noL
been breached
rlmary focus of resLlLuLlon ls 8LCllLn1'S CAln
AlLernaLlve MeLhods for Measurlng LnrlchmenL
4 MarkeL value C8 neL galn
4 MarkeL value
lf beneflL conslsLs of recelpL of properLy or servlces value musL be
esLabllshed by evldence of Lhelr prlce on Lhe markeL
O ;uantum meru|t markeL value of servlces (as much as
O ;uantum va|ebant markeL value of goods (as much as Lhey are
4 8eclplenL's neL Caln
AcLual amounL by whlch Lhe reclplenL's wealLh ls lncreased (could be
more or less Lhan value of Lhe servlces)
O Measured wlLh reference Lo Lhe acLual reclplenL Laklng lnLo
accounL reclplenL's needs clrcumsLances and lnLenLlons
O WorLh of Lhe beneflL ln markeL Lerms
MarkeL value Lends Lo be preferred measure of recovery because lL ls llkely Lo be Lhe
falresL and mosL balanced basls for compensaLlng Lhe conferrer aL a rake LhaL could
reasonably be expecLed by Lhe beneflclary
Moral Ubligation {Restitution wben a promise is based on a prior benefit]
8esLlLuLlon noL dependenL on Lhe obllgor havlng made any promlse
4 redlcaLed on un[usL enrlchmenL raLher Lhan commlLmenL
moral obllgaLlon" someLhlng of a hybrld
4 Covers slLuaLlons ln whlch Lhe facLs do noL fully supporL resLlLuLlonary recovery
buL [usLlflcaLlon for glvlng rellef ls bolsLered by a promlse made afLer Lhe recelpL
of Lhe beneflL
4 blends resLlLuLlonary concepLs and promlse
ln Lhe absence of conslderaLlon an obllgaLlon cannoL be enforced as a conLracL even lf lL
ls morally blndlng
4 8ellef under promlssory esLoppel and resLlLuLlon also requlre more Lhan moral
Powever Lhls should noL be confused wlLh moral obllgaLlon"
4 romlse LhaL saLlsfles Lhe prereqs of Lhe docLrlne of moral obllgaLlon" ls
enforceable desplLe Lhe absence of conslderaLlon
4 8ecause of confuslon courLs someLlmes use Lerm maLerlal beneflL rule" or
promlse for beneflL recelved"
8eneflL conferred noL requesLed?
8esLlLuLlon as basls for llablllLy
Traditional Scope of "Moral Ubligation"
CourLs have applled Lhls concepL Lo speclflc slLuaLlons lnvolvlng a subsequenL promlse Lo
honor a preexlsLlng buL unenforceable legal obllgaLlon
4 le prlor debLs dlscharged ln bankrupLcy and prlor voldable debLs
Tbe Broad "Material Benefit" Rule
Jebb v McCowoo
4 CourL deemed Lhe deLrlmenL Lo be conLemporaneous wlLh Lhe promlse
8esLaLemenL Second 86
4 1) Lhe promlsor has been un[usLly enrlched by a beneflL prevlously recelved
from Lhe promlsee
4 2) Lhe beneflL was noL glven as a glfL
4 3) Lhe promlsor subsequenLly makes a promlse ln recognlLlon of Lhe beneflL
lf Lhese requlremenLs meL Lhe promlsels blndlng Lo Lhe exLenL necessary Lo prevenL
4 1ake lnLo accounL relaLlonshlp beLween Lhe value of Lhe beneflL and Lhe amounL
4 Clear and volunLary raLlflcaLlon of Lhe beneflL acLs as a counLerwelghL Lo Lhe
meddllng and changes Lhe equlLles ln favor of enforcemenL (ln Lhe book's weed
pulllng nelghbor example)

BAILEY v. WEST {Bascom's folly]
acLs u purchases lame horse whlch ends up carlng for senL u monLhly bllls whlle
u alleges lL was noL hls horse anymore ConLracL lmplled ln facL beLween and u unLll
noLlfled LhaL Lhls was no longer u's horse u argues lower courLs erred ln flndlng
conLracL lmplled ln facL 1hls courL agrees
lssue was Lhere really an lmplled ln facL conLracL?
4 Source of obllgaLlon ln conLracL lmplled ln facL ls lnLenLlon of Lhe parLles
4 Pere Lhere was no muLual agreemenL and lnLenL Lo promlse beLween Lhe
Pow can clalm conLracL when he dld noL know who lL was wlLh (he
lnqulred mulLlple Llmes as Lo who Lhe owner was)?
8ased on u's conducL can'L assumed he lnLended Lo enLer lnLo conLracL
4 Cuasl conLracL?
ueflnlLlon no reference Lo Lhe lnLenLlons or expresslons of Lhe parLles
obllgaLlon lmposed ofLen desplLe lnLenLlon nelLher promlse nor prlvlLy ls
CbllgaLlon arlses from Lhe law of naLural lmmuLable [usLlce and equlLy
uuLy LhaL forms Lhe foundaLlon of quaslconLracLual obllgaLlon ls docLrlne
of un[usL enrlchmenL
LlemenLs beneflL conferred upon u by appreclaLlon by u of such
beneflL accepLance and reLenLlon of such beneflL under clrcumsLances
LhaL would make lL lnequlLable Lo reLaln beneflL wlLhouL paymenL
4 can'L recover under quasl conLracL because beneflL was noL deslred by u
lf accepL beneflL knowlngly and keep lL lL ls un[usL Lo keep lL wlLhouL
lf don'L have cholce Lo deny Lhen can'L be held llable
4 L|ements of ;uas| k
8eneflL conferred upon u by
AppreclaLlon by u of such beneflL
AccepLance and reLenLlon by u of such beneflL under such clrcumsLances
LhaL lL would be lnequlLable Lo reLaln Lhe beneflL wlLhouL paymenL of Lhe
value Lhereof

MILLS v. WYMAN {moral obligation]
acLs AfLer plalnLlff cared for defendanL's lll adulL son defendanL promlsed Lo pay and
Lhen dld noL
lssues ls moral obllgaLlon sufflclenL for conslderaLlon?
4 romlse ln Lhls case had no legal conslderaLlon
4 1here has Lo be preexlsLlng obllgaLlon Lo form basls for an effecLlve promlse
Lxpress promlses founded on preexlsLlng equlLable obllgaLlons may be
under whaL clrcumsLances should a promlse noL supporLed by conslderaLlon buL
moLlvaLed by a pasL beneflL conferred be enforceable as a conLracL?
4 kestatement Second 86 (romlssory 8esLlLuLlon)
1) a promlse made ln recognlLlon of a beneflL prevlously recelved by Lhe
promlsor from Lhe promlsee ls blndlng Lo Lhe exLenL necessary Lo prevenL
2) a promlse ls noL blndlng under 1) lf Lhe promlsee conferred Lhe
beneflL as a glfL or for oLher reasons Lhe promlsor has noL been un[usLly
enrlched or Lo Lhe exLenL LhaL lLs value ls dlsproporLlonaLe Lo Lhe beneflL
4 1reaLs glfLs worse Lhan nongraLulLous glfLsls Lhls rlghL?

WEBB v. MCCUWIN {rescuer's recompense]
acLs ln[ured when savlng u's llfe by dlverLlng 73 lb block of wood u agrees Lo care
for for Lhe resL of hls llfe (pays hlm money) u dles and sues for resL of money
lssues ls moral obllgaLlon Lhe necessary conslderaLlon?
4 1hls case dlsLlngulshable from Lhose cases where conslderaLlon ls mere moral
4 Pere promlsor recelved a maLerlal beneflL consLlLuLlng a valld conslderaLlon for
hls promlse
lmpllclL assumpLlon LhaL people would llke for Lhelr llves Lo be saved
4 Pow does courL flnd conslderaLlon?
8eneflL + Moral CbllgaLlon + SubsequenL romlseConslderaLlon
4 McCowln's express promlse Lo pay for servlces rendered ls an afflrmance of
whaL Webb had done ralslng Lhe presumpLlon LhaL Lhe servlces had been
rendered aL McCowln's requesL
McCowln beneflLLed Webb ln[ured
Differences between Mills and Webb:
ln Mllls Lhlrd parLy made Lhe promlse
Webb collecLed and defendanL ln Mllls never dld
4 arLlal performance/afflrmance

HARRINCTUN v. TAYLUR {deflected axe]
acLs seeks Lo recover promlse made by u u's wlfe abouL Lo decaplLaLe hlm buL
saves hlm [usL ln Llme buL ln process muLllaLes her hand u orally promlses Lo pay her
damages buL afLer small some gave her noLhlng else
lssue ls Lhere conslderaLlon sufflclenL Lo supporL Lhe promlse?
4 CourL says humanlLarlan acL of Lhls klnd volunLarlly performed ls no
conslderaLlon for Lhe promlse
4 CraLulLous promlse based largely on Lhe envlronmenL
AL home raLher Lhan work envlronmenL
4 lf parLy lnLends as glfL Lhere can be no enforceable promlse? Was Lhls an
lnLended glfL?

Restatement 8 and tbe Future of Moral Ubligation
romlse for 8eneflL 8ecelved"
4 1) a promlse made ln recognlLlon of a beneflL prevlously recelved by Lhe
promlsor from Lhe promlsee ls blndlng Lo Lhe exLenL necessary Lo prevenL
4 2) a promlse ls noL blndlng under subsecLlon 1
A) lf Lhe promlsee conferred Lhe beneflL as a glfL or for oLher reasons Lhe
promlsor has noL been un[usLly enrlched
8) Lo Lhe exLenL LhaL lLs value ls dlsproporLlonaLe Lo Lhe beneflL

A promlsor may be held accounLable for a promlse wlLhouL conslderaLlon and Lhe courL
may enforce lL elLher Lo Lhe same exLenL as lf a conLracL was made or Lo Lhe exLenL
necessary Lo remedy Lhe unfalr resulL of rellance on lL
LssenLlal elemenLs
4 A promlse coupled wlLh deLrlmenLal rellance on LhaL promlse
1ransacLlons where Lhere ls subsLanLlal unbargalned for rellance on Lhe promlse
Tbe Nature of Promissory Estoppel as an Independent Basis of Relief or as a
Consideration Substitute
lf a promlse ls supporLed by conslderaLlon and Lhere are no oLher problems dlsquallfylng
Lhe promlse as conLracLual promlssory esLoppel ls noL needed
4 When analyzlng problem flrsL conslder lf a conLracL has been formed and Lhen
Lurn Lo promlssory esLoppel only lf LhaL quesLlon ls answered negaLlvely
8ecause Lhls allows for enforcemenL of promlse wlLhouL conslderaLlon Lhls ls
someLlmes called subsLlLuLe for conslderaLlon"
8esLaLemenL Second 90
4 (1) a promlse whlch Lhe promlsor should reasonably expecL Lo lnduce acLlon or
forbearance on Lhe parL of Lhe promlsee or a Lhlrd person and whlch does lnduce
such acLlon or forbearance ls blndlng lf ln[usLlce can be avolded only by
enforcemenL of Lhe promlse
4 oeot b depends on Lhe reasonableness of promlsee's rellance on lLs
deflnlLe and subsLanLlal characLer ln relaLlon Lo Lhe remedy soughL on Lhe
formallLy wlLh whlch Lhe promlse ls made on Lhe exLenL Lo whlch Lhe
evldenLlary cauLlonary deLerrenL and channellng funcLlons of form are meL by
Lhe commerclal seLLlng or oLherwlse and on Lhe exLenL Lo whlch such oLher
pollcles as Lhe enforcemenL of bargalns and Lhe prevenLlon of un[usL enrlchmenL
are relevanL
4 oeot J a promlse blndlng under Lhls secLlon ls a conLracL and fullscale
enforcemenL by normal remedles ls also approprlaLe 8ellef may be llmlLed Lo
resLlLuLlon or Lo damages or speclflc rellef measured by Lhe exLenL of Lhe
promlsee's rellance raLher Lhan by Lhe Lerms of Lhe promlse
Some courLs say Lhls ls an alLernaLlve and lndependenL basls for enforclng Lhe promlses
a separaLe Lheory of obllgaLlon based noL on bargaln buL on accounLablllLy for
conducL LhaL lnduces rellance
4 Sees lL as more of a redress for ln[ury suffered ln rellance Lhan as a consensual
Tbe Difference in Remedial Empbasis Between Contract and Promissory Estoppel
ConLracL based docLrlne vS lndependenL LorLllke Lheory
lf promlssory esLoppel creaLed conLracLual llablllLy normal rellef would be f
eofoceeot of Lhe promlse
lf you focus on Lhe proLecLlon of rellance Lhen remedy should usually be llmlLed Lo
relmbursemenL of Lhe acLual loss
1hese Lwo dlfferences could make a dlfference ln recovery
4 ConLracL damages look Loward Lhe fuLure and Lry Lo place promlsee ln poslLlon
he would have been ln had Lhe conLracL been honored
Clve promlsee beneflL of Lhe bargaln"
4 1orLllke damages look Loward Lhe pasL and Lry Lo resLore Lhe sLaLus quo by
relmbursemenL of expenses and losses
Equitable Estoppel and its link to Promissory Estoppel
LqulLable esLoppel
4 arLy Lo be esLopped musL be apprlsed of Lhe facLs
4 Pe musL lnLend LhaL hls conducL shall be acLed upon or musL so acL LhaL Lhe
parLy asserLlng Lhe esLoppel has a rlghL Lo belleve lL was so lnLended
4 1he oLher parLy musL be lgnoranL of Lhe Lrue sLaLe of facLs and
4 Pe musL rely upon Lhe conducL Lo hls ln[ury
LssenLlal funcLlon of L ls Lo provlde rellef for [usLlflable rellance on a promlse glven
wlLhouL conslderaLlon
L derlves from older prlnclple of LqulLable LsLoppel
4 8aslc purpose preclude a person from asserLlng a rlghL when by dellberaLe
words or conducL he has mlsled Lhe oLher parLy lnLo Lhe [usLlflable bellef LhaL
Lhe rlghL does noL exlsL or would noL be asserLed
4 lnvolves balanclng of Lhe equlLles beLween Lhe parLles and a comparaLlve
evaluaLlon of Lhe faulL and responslblllLy of Lhe parLles
4 Cenerally only bars rellef when Lhe parLy asserLlng Lhe rlghLs dellberaLely
engaged ln Lhe mlsleadlng behavlor wlLh knowledge or reason Lo know lL was
mlsleadlng and would llkely lnduce rellance by Lhe oLher
4 1he oLher parLy unaware of Lhe Lrue facLs musL have eleJ on Lhe
mlsrepresenLaLlon ln a way LhaL would resulL ln some loss or pre[udlce lf Lhe
clalmanL ls permlLLed Lo asserL Lhe rlghL
LsLoppel noL based on fraud buL on accounLablllLy for dellberaLe words or conducL LhaL
lnduced rellance and consequenL ln[ury
ulfference beLween equlLable esLoppel and promlssory esLoppel
4 LqulLable rellance on lncorrecL facLual asserLlon (noL orlglnally held appllcable
Lo promlses)
4 romlssory rellance on a promlse (fuLure)
romlsor esLopped from asserLlng a lack of conslderaLlon for Lhe promlse
hence conslderaLlon deemed presenL
8esLaLemenL second recognlzed Lhe Jetleoto elooce oo tbe polse
as Lhe basls for enforclng lL
Tbe Range of Promissory Estoppel: Cifts and Commercial Transactions
3 Lypes of slLuaLlons where promlssory esLoppel may be appllcable Lo a commerclal
4 romlse made for good conslderaLlon ls noL enforceable because of
noncompllance wlLh legal formallLy such as Lhe sLaLuLe of frauds
4 romlssory esLoppel may be used Lo hold a parLy Lo a promlse made durlng
negoLlaLlons for an aborLlve conLracL
When parLles negoLlaLe Lhey may make LenLaLlve commlLmenLs
4 romlssory esLoppel may afford rellef for rellance on a promlse LhaL falls shorL of
becomlng conLracLual because of some defecL or omlsslon ln Lhe agreemenL
formed by Lhe parLles
CuesLlon of wheLher falrness demands accounLablllLy even ln Lhe
absence of a blndlng conLracL
Elements of Promissory Estoppel
8esLaLemenL Second 90
4 A promlse whlch Lhe promlsor should reasonably expecL Lo lnduce acLlon or
forbearance on Lhe parL of Lhe promlsee or a Lhlrd person and whlch does lnduce
such acLlon or forbearance ls blndlng lf ln[usLlce can be avolded only by
enforcemenL of Lhe promlse 8emedy granLed for breach may be llmlLed as
[usLlce requlres
romlse musL have been made
4 ManlfesLed (raLher Lhan acLual) lnLenL ls whaL ls deLermlnaLlve
4 lnLenL gauged by ob[ecLlve LesL
CuesLlon noL whaL promlsor acLually lnLended buL whaL Lhe promlsee
was [usLlfled ln undersLandlng LhaL lnLenL Lo be based on promlsor's
romlsor Should 8easonably Pave LxpecLed Lo romlse Lo lnduce AcLlon or orbearance
by Lhe romlsee
4 romlsor's [usLlflable undersLandlng of Lhe llkely lmpacL of Lhe promlse
1he romlse MusL Pave lnduced !usLlflable AcLlon or orbearance by Lhe romlsee
4 2 quesLlons
lf Lhe promlse dld ln facL lnduce Lhe promlsee's acLlon or forbearance
Lven lf Lhe promlse dld lnduce Lhe promlsee's conducL he should noL be
glven rellef unless hls parLlcular response was a [usLlflable reacLlon Lo Lhe
O C wheLher a reasonable person ln Lhe promlsee's poslLlon would
have so acLed or refralned from acLlng as a resulL of Lhe promlse
4 1he sLronger Lhe sense of commlLmenL Lhe greaLer Lhe llkellhood of a
reasonable expecLaLlon of lnducemenL and consequenLly of [usLlflable rellance
1he romlse ls 8lndlng lf ln[usLlce can be Avolded only by lLs LnforcemenL
4 ueLrlmenL/harm suffered by Lhe promlsee ln relylng on Lhe promlse
4 romlsee musL have suffered some speclflc and measurable loss by relylng on
Lhe promlse
LxpendlLure sacrlflced opporLunlLy commlLmenL eLc
Tbe Remedy Wben Promissory Estoppel is Applied
Whlle courLs may granL Lhe promlsee full expecLaLlon damages Lo compensaLe for Lhe
loss of bargaln resulLlng from Lhe breach lL has Lhe dlscreLlon Lo provlde a lesser
8ellance how much person acLually relled on Lhe promlse
4 WheLher Lhls measured by ouL of pockeL expendlLures forgone opporLunlLles or
Promissory Estoppel as a Means of Enforcing Promises Made in Negotiations
Lven Lhough a sLaLemenL made durlng negoLlaLlons may sound llke a promlse a
reasonable parLy should normally reallze LhaL lL ls noLhlng more Lhan an expresslon of
lnLenLlon or a proposal for a Lerm LhaL wlll become an underLaklng ln Lhe conLracL lf Lhe
negoLlaLlons culmlnaLe ln a flnal agreemenL
romlssory LsLoppel and Lhe uuLy Lo negoLlaLe ln Cood alLh
4 romlse and rellance founded on relaLlonshlp of LrusL LhaL arlses ln negoLlaLlons
romlssory LsLoppel and ALWlll LmploymenL AgreemenLs
4 LmploymenL ls aL wlll lf elLher parLy can LermlnaLe Lhe employmenL aL any Llme
for any reason
uefaulL rule under common law employmenL ls aL wlll unless Lhe parLles
agree Lo employmenL for a deflnlLe Lerm eLc
4 Lven where employmenL has been offered and accepLed courLs commonly hold
LhaL before Lhe employmenL acLually beglns Lhere ls no conLracL because
conslderaLlon ls absenL
Slnce boLh parLles have Lhe ablllLy Lo LermlnaLe nelLher parLy has any
fuLure commlLmenL
4 1yplcally damages here are hard Lo prove
8ellef usually conflned Lo acLual ouL of pockeL losses llke movlng

RICKETTS v. SCUTHURN {foregoing employment]
acLs grandfaLher promlses granddaughLer money for glvlng up" employmenL
alleges noLe glven Lo her Lo lnduce her Lo abandon her occupaLlon
noLes courL says noLe noL glven ln conslderaLlon of Lhe plalnLlff pursulng or agreelng Lo
pursue any klnd of conducL ( laLer goL a [ob agaln by asslsLance of grandfaLher)
4 Would have been dlfferenL lf he had sald l wlll glve you Lhls money lf you qulL
your [ob"
4 no promlse on Lhe parL of Lhe plalnLlff Lo do or refraln from golng anyLhlng
(graLulLous promlse Lhen?)
4 CulLLlng of [ob by was noL done ln fulflllmenL of any conLracL obllgaLlon
assumed when she accepLed Lhe noLe
4 Can you use equlLable esLoppel here?
CourL sLreLches Lhe deflnlLlon here
Pow Lhls declded under 8esLaLemenL 90?
4 Would be reasonable expecLaLlon LhaL grandpa's promlse would lnduce acLlon
4 8easonable for her Lo qulL? resumably
CrandfaLher's promlse" lnduced Lhe rellance
4 8u1 blndlng only lf ln[usLlce can be avolded Was Lhere ln[usLlce?
no she wenL back Lo work whlle sLlll geLLlng Lhe money
kestatement second 139

BLINN v. BEATRICE {promised employment]
acLs recelves [ob offer goes Lo currenL employer Lo seek assurance abouL
permanency of presenL [ob u says we've goL aL leasL 3 more years of work Lo do"
asked Lo reslgn a year laLer alleges represenLaLlons made Lo hlm by employer
sufflclenL Lo modlfy hls sLaLus as aLwlll employee 8urden of proof lays on here
lssue wheLher assurances glven Lo consLlLuLed offer of unllaLeral conLracL
noLes no conLracL clalm s assurances too vague]|ndef|n|te to be offer
4 uld employer manlfesL clear lnLenL Lo make a promlse of an offer of
4 8uL have valld promlssory esLoppel clalm
under nebraska law no requlremenL of deflnlLeness ln acLlon based on
promlssory esLoppel
Cnly requlres rellance be reasonable and foreseeable
O Lven lf promlsor dld noL lnLend Lo be bound
4 When a promlse ls made buL a conLracL ls noL formed because of a lack of
conslderaLlon reasonable rellance by Lhe promlsee can sLlll render Lhe promlsor
llable for breach of Lhe promlse
romlsee's rellance on Lhe promlse replaces Lhe mlsslng conslderaLlon
4 LmploymenL conLracLs
CfLen quesLlon ls wheLher employee relled on promlse by employer Lo
change Lhe aL wlll" sLaLus of Lhe employmenL
4 ConLemporary enslon lans
L8lSA's sLaLuLory proLecLlon and enforcemenL procedures ln Lhls area
preempL sLaLe law whlch enforced vesLlng on Lheorles of bargaln conLracL
or promlssory esLoppel
4 ulfferenLlaLes beLween requlremenLs for k and for L

CUHEN v. CUWLES MEDIA CU {source's identity exposed]
acLs supplles lnfo Lo newpaper abouL gubernaLorlal candldaLe ln reLurn for
confldenLlallLy lnfo leaks and 's name revealed as Lhe source flred from [ob sues
for breach of conLracL and wlns
noLes no real conLracLual llablllLy ln Lhls slLuaLlon alLhough elemenLs are Lhere
4 CourL conslders enforcemenL of confldenLlallLy promlse under docLrlne of L
LnforcemenL necessary Lo prevenL ln[usLlce?
?es losL hls [ob because u dldn'L keep promlse
O 8esulLanL harm Lo requlres remedy Lo avold ln[usLlce us llable
for broken promlse
4 uamages
or L Lhe remedy granLed may be llmlLed as [usLlce requlres
4 CourL says promlse has Lo be clear and deflnlLe
4 no conLracL breach buL use promlssory esLoppel
no clear and deflnlLe agreemenL

ALL-TECH TELECUM v. AMWAY {breacb of researcb warranty]
acLs clalms lnLenLlonal and negllgenL mlsrepresenLaLlon and promlssory esLoppel
noLes All1ech sLresses as basls for lLs clalm of promlssory esLoppel LhaL Amway had
Lhoroughly researched lLs 1eleCharge program before offerlng lL Lo dlsLrlbuLors does
noL flL
4 1hls warranLs pasL or exlsLlng condlLlon raLher Lhan commlLLlng Lo a fuLure
acLlon and ls beLLer descrlbed as warranLy Lhan as a promlse
4 A warranLy can lnduce reasonable rellance lLs breach can be Lhe basls for a clalm
of promlssory esLoppel
8uL only ln llmlLed clrcumsLances
4 WarranLy ls sLaLemenL abouL exlsLlng sLaLe of affalrs noL promlse
4 Amway's promlse was for pasL acLlon noL fuLure
4 L meanL Lo flll gap here no gap because Lhere ls conLracL llablllLy
Can'L geL Lwo chances for recovery (L Anu conLracL)
L used when Lhere ls no conLracL
O ln Lhls case proves breach buL can'L prove damages
1hlng Lo remember an acLlon on a L Lheory musL be ln conLracL raLher Lhan ln LorL
where Lhe lnduced rellance resulLs on ln economlc lass
4 Lven Lhough promlsor promlsed lnLendlng Lo lnduce rellance and even Lhough
Lhere ls noL consenL by Lhe promlsee Lhe law of LorLs does noL apply
1here ls no place for promlssory esLoppel where Lhe clalmed acLlonable rellance was ln
facL bargalned for by Lhe promlsor
arLy who makes a represenLaLlon (warranLy) LhaL becomes parL of a bargaln promlses
Lo pay damages lf Lhe warranLy ls noL saLlsfled
L can'L be used for fuLure acLlons only pasL acLlons

usually oral conLracLs can be enforceable as conLracLs however cerLaln Lypes of
conLracL fall ouLslde Lhls general rule and musL be wrlLLen and slgned Lo be enforceable
4 under whaL condlLlons ls a formal wrlLlng oecessoy for legal enforcemenL of a
uon'L enforce hlgh value conLracLs unless you have clear proof
8aslc rule a conLracL wlLhln lLs scope may noL be enforced unless a memorandum of lL ls
wrlLLen and slgned by Lhe parLy Lo be charged
4 1) Lhe sLaLuLe does noL requlre Lhe enLlre conLracL Lo be wrlLLen buL only a
memorandum of lL
4 2) only Lhe parLy agalnsL whom enforcemenL ls soughL needs Lo have slgned lL
4 3) consequence of noncompllance ls usually unenforceablllLy noL lnvalldlLy
4 4) dlsLlncLlons beLween whaL klnd of wrlLlngs" are adequaLe
SLaLuLe lnLended Lo prevenL a person from enforclng a falsely alleged conLracL Lhrough
per[ured LesLlmony
CrlLlques of Lhe sLaLuLe
4 WrlLlng requlremenL opens posslblllLy for fraud?
WrlLlng requlremenL does reduce fraudulenL asserLlons of promlse 8u1
lL can exacerbaLe Lhe fraudulenL denlals of a promlse (oral promlsers
learn LhaL Lhe wrlLlng requlremenLs allows Lhem freedom ln dlsclalmlng
Lhelr promlse wlLhouL legal penalLy)
Pow Lo proLecL agalnsL Lhls? Slmply demand oral promlse be made ln
wrlLlng before acLlng on lL
usefulness of wrlLlng requlremenL
4 useful Lo prevenL fraud by dellberaLe overreachlng regardlng Lerms of Lhe
4 resence of wrlLlng prevenLs Lo a large exLenL oLherwlse posslble lnnocenL
mlsundersLandlng of whaL acLually were Lhe Lerms of Lhe bargaln
4 rovldes exacL wordlng of Lhe Lerms
4 ls agreemenL wlLhln sLaLuLe of frauds?
4 ls Lhere sufflclenL wrlLlng?
Some courLs accepL formallsL approach (need wrlLlng) buL oLhers look Lo
purpose (lf can auLhenLlcaLe recordlng Lhen Lhls ls good evldence)
CurrenL Lrend ls away from formallsL approach
4 ls Lhere an excepLlon?
Tbe First Inquiry: Is tbe Contract of a Type tbat Falls Witbin tbe Statute?
ConLracLs for Lhe Sale of Land or an lnLeresL ln Land
4 SLaLuLe applles noL only Lo a conLracL Lo sell land buL also Lo any oLher conLracL
under whlch land ls dlsposed of as well as a Lransfer of an lnLeresL ln land shorL
of full ownershlp (llke Lhe granL or Lransfer of an easemenL or morLgage)
4 Applles Lo any" lnLeresL ln land
ConLracLs LhaL CannoL be erformed WlLhln a ?ear
4 1o fall wlLhln Lhe words of Lhe provlslon Lhe agreemenL musL be one of whlch lL
can Lruly be sald aL Lhe very momenL LhaL lL ls made 1hls agreemenL ls noL Lo
be performed wlLhln one year"
4 Any conLracL musL comply wlLh Lhe sLaLuLe lf lL cannoL be performed wlLhln a
year of lLs execuLlon
noL conflned Lo conLracLs ln whlch Lhe performance lLself wlll Lake over a
year buL lncludes any conLracL ln whlch Lhe performance wlll noL be
compleLed wlLhln a year of conLracLlng
8elaLes Lo perlod beLween maklng of Lhe conLracL and Lhe end of
4 Lnsure LhaL longerLerm conLracLs are recorded
8eflecLs concern LhaL parLles cannoL be expecLed Lo remember
unrecorded Lerms as Llme passes
4 A conLracL LhaL ls Lo conLlnue for Lhe llfeLlme of one of Lhe parLles ls of lndeflnlLe
Lerm and ls LreaLed by some courLs as sub[ecL Lo Lhe sLaLuLe
ConLracLs for Lhe Sale of Coods
4 2201 requlres compllance wlLh Lhe sLaLuLe where Lhe prlce of Lhe goods under
Lhe sale conLracL ls $300 or more ($3000 or more ln 2003 revlslon)
4 MosL courLs apply predomlnanL purpose LesL" Lo declde lf Lhe conLracL ls
sub[ecL Lo uCC arLlcle 2
ArLlcle 2 applles lf Lhe sales componenL ls domlnanL buL lL does noL apply
lf Lhe cenLral purpose of Lhe conLracL ls Lhe supply of servlces wlLh goods
furnlshed lncldenLally Lo Lhe servlce
4 A wrlLlng ls noL lnsufflclenL because lL omlLs or lncorrecLly sLaLes a Lerm agreed
upon buL Lhe conLracL ls noL enforceable under 2201(1) beyond Lhe quanLlLy of
goods shown ln such wrlLlng
4 2201(3) a conLracL whlch does noL saLlsfy Lhe requlremenLs of subsecLlon (1)
buL whlch ls valld ln oLher respecLs ls enforceable (a)lf Lhe goods are Lo be
speclally manufacLured for Lhe buyer and are noL sulLable for sale Lo oLhers ln
Lhe ordlnary course of Lhe seller's buslness and Lhe seller before noLlce of
repudlaLlon has made elLher subsLanLlal beglnnlng of Lhelr manufacLure or
commlLmenLs for Lhelr procuremenL
4 2006 verslon
record" replaces wrlLlng Lhus lncludes elecLronlc recordlng
ConLracL noL enforceable beyond quanLlLy of goods shown ln Lhe record
2201(4) emphaslzes LhaL a conLracL enforceable under Lhls secLlon ls
noL rendered unenforceable merely because lL ls noL capable of belng
performed wlLhln one year or any oLher appllcable perlod afLer lLs maklng
4 goods" all Lhlngs (lncludlng speclally manufacLured goods) whlch are movable
aL Lhe Llme of ldenLlflcaLlon Lo Lhe conLracL for sale oLher Lhan Lhe money ln
whlch Lhe prlce ls Lo be pald
Also lncludes mlnerals LhaL have already been severed from Lhe land
4 Coods speclflcally manufacLured C8 Lhe buyer (even lf noL manufacLured by Lhe
seller) are nC1 wlLhln uCC 2201 lf
1hey are noL sulLable for sale Lo oLhers ln Lhe ordlnary course of Lhe
seller's buslness
And Lhe seller before noLlce of repudlaLlon ls recelved and under
clrcumsLances whlch lndlcaLe LhaL Lhe goods are for Lhe buyer has made
elLher a subsLanLlal beglnnlng of Lhelr manufacLure or commlLmenLs for
Lhelr procuremenL
le sLandard whlLe shlrLs under sLaLuLe buL by addlng company logo noL
under Lhe sLaLuLe
ConLracLs Lo Answer for Lhe uebL or CbllgaLlon of AnoLher
4 1hls covers sureLyshlp conLracLs
SureLy ls a person who promlses Lhe credlLor Lo pay anoLher person's
debL so LhaL lf Lhe oLher person falls Lo pay Lhe debL Lhe sureLy ls
obllged Lo pay lL
Secondarlly llable
4 ormallLy of Lhe wrlLlng serves a cauLlonary funcLlon by alerLlng Lhe sureLy LhaL
she ls underLaklng a serlous legally enforceable commlLmenL
4 Serves Lhe usual evldenLlary funcLlon of Lhe sLaLuLe of frauds by prevenLlng Lhe
asserLlon of a posslbly bogus clalms LhaL a person agreed Lo pay Lhe debL of
ConLracLs of LxecuLors or AdmlnlsLraLors Lo Answer for Lhe uuLy of Lhelr uecedenLs
4 LxecuLor/admlnlsLraLor assumes personal llablllLy on a credlLor of a decedenL for
a debL or obllgaLlon lncurred by decedenL before hls deaLh
4 Applles only Lo debLs LhaL decedenL lncurred noL Lo new debLs lncurred by Lhe
esLaLe lLself
ConLracLs upon ConslderaLlon of Marrlage
4 uoes noL cover Lhe promlse of marrlage (whlch ls usually oral)
4 8elaLes Lo a conLracL ln conslderaLlon of marrlage ln whlch Lhe prospecLlve
spouses agree Lo a marrlage seLLlemenL or Lo flnanclal arrangemenLs relaLlng Lo
Lhe marrlage
4 SLaLuLe applles only Lo prenupLlal conLracLs moLlvaLed by Lhe lmpendlng
Tbe Second Inquiry: If tbe Statute Applies, is tbe Contract Reflected in a Writing tbat
Satisfies tbe Requirements?
A wrlLLen memorandum
4 record" lnformaLlon LhaL ls lnscrlbed on a Langlble medlum or LhaL ls sLored
ln an elecLronlc or oLher medlum and reLrlevable ln percelvable form
4 1here ls no parLlcular formallLy needed for Lhe wrlLlng as long as lL conLalns Lhe
sLaLuLe's mlnlmum requlred conLenL and slgnaLure
lcy v 2ebe
O Land sale conLracL wrlLLen on back of a resLauranL check
O A memorandum wrlLLen and slgned by [usL one of Lhe parLles only
saLlsfles Lhe sLaLuLe Lo Lhe exLenL LhaL enforcemenL ls soughL
agalnsL Lhe parLy who slgned lL
4 WrlLLen memo of conLracL need noL be slngle documenL
osslble Lo saLlsfy sLaLuLe by serles of correspondence or oLher llnked
MusL all refer Lo Lhe same LransacLlon
Cral LesLlmony can be used Lo prove LhaL Lhe slgnaLure was lnLended Lo
auLhenLlcaLe Lhe conLenL of Lhe unslgned wrlLlngs
O obtee v lzobetb AJeo
4 2 year employmenL conLracL saLlsfled Lhe sLaLuLe of frauds
where Lhe Lerms of employmenL were summarlzed ln an
unslgned noLe made by a secreLary when Lhe agreemenL
was negoLlaLed and Lhe employer's slgnaLure appeared on
Lwo payroll cards LhaL clearly relaLed Lo Lhe same
LransacLlon buL dld noL conLaln all Lhe essenLlal Lerms of
Lhe conLracL
4 Lven lf wrlLlng losL aL Llme of llLlgaLlon sLaLuLe can sLlll be saLlsfled
Can prove by oral LesLlmony
ConLenL of Lhe Memorandum
4 LvldenLlary adequacy has a low bar
All you need ls enough wrlLlng Lo sufflclenLly show Lhe exlsLence of a
WrlLlng does noL have Lo lnclude every Lerm of Lhe conLracL
4 Common law
Cenerally requlred LhaL wrlLlng musL aL leasL ldenLlfy Lhe parLles and Lhe
naLure of Lhe exchange and lL musL seL ouL all or aL leasL mosL of Lhe
maLerlal Lerms
4 uCC
Cnly Lerm LhaL musL be sLaLed ln wrlLlng ls pootlty of Lhe goods sold so
LhaL Lhe conLracL ls noL enforceable beyond Lhe sLaLed quanLlLy
4 nC1L lmporLanL Lo recognlze LhaL a wrlLlng sufflclenL for Lhe purposes of Lhe
sLaLuLe may noL be clear and full enough Lo ulLlmaLely convlnce Lhe facLflnder
LhaL a conLracL was made on Lhe Lerms alleged
Compllance wlLh Lhe sLaLuLe ls a dlfferenL lssue from adequaLe proof of
Lhe conLracL for Lhe purpose of rellef
Caps ln conLracL musL be Lhen supplemenLed by lnLerpreLaLlon and
persuaslve exLrlnslc evldence
4 8aslc rule of SlgnaLure
noL necessary LhaL Lhe enforclng parLy slgned Lhe wrlLlng because Lhe
evldenLlary role of Lhe sLaLuLe ls saLlsfled as long as Lhe parLy dlspuLlng
Lhe exlsLence of Lhe conLracL has slgned lL ln person or Lhrough an agenL
slgnaLure" any mark or symbol placed by Lhe parLy on Lhe paper wlLh
Lhe lnLenLlon of auLhenLlcaLlng lL
When wrlLlng conslsLs of several dlfferenL pleces of paper lL ls noL
necessary LhaL every plece has been slgned [usL have Lo relaLe Lo Lhe
same LransacLlon
4 LlecLronlc SlgnaLures
1here have been many federal and sLaLe sLaLuLes passed deallng wlLh
elecLronlc slgnaLures (eslgn)
O ederal and sLaLe sLaLuLes glve legal effecL Lo elecLronlc
slgnaLures and Lhey declare LhaL a slgnaLure or oLher record
relaLlng Lo a LransacLlon may noL be denled legal effecL solely
because lL ls ln elecLronlc form
elecLronlc slgnaLure" an elecLronlc sound symbol or process aLLached
Lo or loglcally assoclaLed wlLh a conLracL or oLher record and execuLed or
adopLed by a person wlLh Lhe lnLenL Lo slgn Lhe record
ulsLlncLlon beLween ldenLlfylng symbol LhaL ls auLomaLlcally generaLed by
Lhe compuLer (le sender's lu on Lop of a fax) and a dellberaLe placlng of
slgnaLure on Lhe communlcaLlon
4 LxcepLlon Lo Lhe SlgnaLure 8ule Where 8oLh arLles are MerchanLs
2201(2) recognlzes one slLuaLlon ln whlch a wrlLlng can be enforced
agalnsL Lhe parLy who dld noL slgn lL
O 1he followlng requlremenLs musL be meL
4 8oLh parLles are merchanLs
4 WlLhln a reasonable Llme of Lhe oral conLracL one of Lhe
parLles sends a wrlLLen conflrmaLlon Lo Lhe oLher whlch ls
slgned by Lhe sender and oLherwlse saLlsfles Lhe sLaLuLe as
agalnsL Lhe sender
4 1he reclplenL has reason Lo know lLs conLenLs
4 8eclplenL does noL glve wrlLLen noLlce of ob[ecLlon Lo lL
wlLhln 10 days of recelpL
AlLhough Lhe conLracL could normally only be enforced agalnsL Lhe
sender (as slgnaLory) when boLh parLles are merchanLs Lhe nonslgnlng
reclplenL ls also bound by Lhe conducL of falllng Lo proLesL afLer recelvlng
a wrlLlng LhaL should have been read
Tbe Tbird Inquiry: If tbe Statute Applies and is Not Complied Witb, Does tbe Ural
Contract Fall Witbin Any of Its Exceptions?
lf conLracL falls wlLhln sLaLuLe and falls Lo comply wlLh lL Lhe conLracL ls unenforceable
however Lhere are a few excepLlons LhaL permlL enforcemenL desplLe Lhe lack of a
sufflclenL slgned wrlLlng
1he arL erformance LxcepLlon
4 ollowlng oral conLracL Lhe parLles may begln performance whlch may provlde
rellable evldence LhaL a conLracL was made
4 Lven lf sLaLuLe applles performance saLlsfles lLs funcLlon
4 Some courLs recognlze an excepLlon only lf Lhe parLy seeklng enforcemenL has
fully performed
4 2201(3)(a)
Covers cases ln whlch Lhe seller has begun Lhe manufacLure of goods LhaL
are speclally made for Lhe buyer and noL oLherwlse easlly saleable
4 2201(3)(c)
Allows enforcemenL of Lhe conLracL only Lo Lhe exLenL paymenL for Lhe
goods has been made and accepLed or goods LhaL have been dellvered
and accepLed
O lf one parLy has performed and Lhe oLher has accepLed LhaL
performance Lhe parLy who performed can enforce Lhe conLracL
Lo recover Lhe conslderaLlon due for Lhe performance rendered
1he !udlclal Admlsslon LxcepLlon
4 2201(3)(b) permlLs enforcemenL of a conLracL agalnsL a parLy desplLe non
compllance wlLh Lhe sLaLuLe lf LhaL parLy admlLs ln pleadlng LesLlmony or
oLherwlse ln courL" LhaL a conLracL was made
4 ConLracL enforceable only Lo Lhe exLenL of Lhe quanLlLy of goods admlLLed
1he roLecLlon of 8ellance LsLoppel and romlssory LsLoppel
4 under some clrcumsLances equlLable esLoppel may be used Lo proLecL rellance
on a false facLual asserLlon
4 romlssory esLoppel ls more useful when Lhere ls no facLual represenLaLlon
lnduclng rellance buL one of Lhe parLles [usLlflably relles on Lhe oral conLracL as a
promlse Lhereby sufferlng some deLrlmenL
8esLaLemenL 139 (elemenLs of promlssory esLoppel)
O A promlse reasonably expecLed Lo lnduce rellance Lhe
lnducemenL of [usLlflable rellance on Lhe promlse by Lhe oLher
parLy and Lhe need Lo enforce Lhe promlse Lo prevenL ln[usLlce
O Cne addlLlonal facLor
4 WheLher Lhe promlsee's conducL ln rellance or oLher
avallable evldence corroboraLes Lhe exlsLence of a
SuggesLs LhaL even where parL performance does
noL on lLs own creaLe an excepLlon Lo Lhe sLaLuLe lL
could be a relevanL facLor ln decldlng on wheLher
Lo granL promlssory esLoppel rellef
4 1here ls dlsagreemenL over wheLher promlssory esLoppel ls avallable Lo save an
oral conLracL for sale under uCC 2201
Tbe Impact of Non-Compliance Witb tbe Statute
noncompllanL conLracL ls someLlmes sald Lo be lnvalld or vold a legal nulllLy of no
force or effecL
4 SomeLlmes lL ls called unenforceable a conLracL LhaL ls valld buL cannoL be
sued on and enforced ln courL
4 More generally accepLed LhaL noncompllance wlLh Lhe sLaLuLe does noL vold Lhe
conLracL buL merely makes lL unenforceable
lf Lhe conLracL ls unenforceable for noncompllance wlLh Lhe sLaLuLe Lhe parLy seeklng
Lo rely on Lhe sLaLuLe as a defense cannoL ralse lL by a general denlal
4 MusL be speclflcally pleaded as an afflrmaLlve defense
lf Lhls defense ls ralsed and succeeds Lhen conLracL cannoL be enforced
lf nelLher parLy has glven or done anyLhlng under Lhe conLracL Lhe pracLlcal effecL of
nonenforcemenL for mosL purposes ls Lo puL an end Lo any obllgaLlons LhaL Lhe parLles
mlghL oLherwlse have had under Lhe conLracL
lf Lhere has been some sorL of parL performance by one of Lhe parLles and Lhe conLracL
ls laLer deemed unenforceable Lhe parLy who recelved Lhe performance no longer has a
rlghL Lo keep lL and lL can be reLurned under prlnclples of resLlLuLlon
Tbe Effect of tbe Statute of Frauds on Modifications of a Contract
A conLracL can always be modlfled by agreemenL beLween Lhe parLles
4 ModlflcaLlon ls a conLracL ln lLself dlsLlncL from Lhe orlglnal conLracL LhaL lL
4 SLaLuLe of frauds applles Lo modlflcaLlons
WheLher or noL Lhe orlglnal conLracL was sub[ecL Lo Lhe sLaLuLe lf Lhe
conLracL as modlfled falls wlLhln Lhe sLaLuLe Lhe modlflcaLlon musL be
recorded ln a wrlLlng sufflclenL Lo saLlsfy lL

If contract does not fall witbin MYLECS, it is governed by UCC
uCC 2201 need quanLlLy Lerm and may noL need slgnaLure of Lhe parLles Lo be charged

acLs clalms breach of conLracL enLered lnLo agreemenL glvlng hlm salary lncrease
every year
lssue uoes sLaLuLe of frauds bar Lhe enforcemenL of Lhls conLracL (le ls Lhere sufflclenL
noLes uefense argues Lhere was noL sufflclenL wrlLlng Lo enforce Lhe employmenL
4 WrlLlngs 2 payroll cards welcome wlre Lelephone order blank
Lach alone noL sufflclenL 8u1 courL can connecL Lhem Lo form basls for
one conLracLual agreemenL (uses parol evldence)
O arol evldence porLray clrcumsLances surroundlng Lhe maklng of
Lhe memorandum
1he wrlLlngs musL have Lhe essenLlal elemenLs of Lhe conLracL
4 MulLlple documenLs CAn saLlsfy Lhe sLaLuLe buL you MuS1 flnd Lhe llnks
beLween Lhem
SLaLuLe doesn'L requlre memorandum be one documenL
CourL polnLs ouL LhaL some [urlsdlcLlons requlre all wrlLlngs have Lo be
slgned (Lhls ls Lhe necessary connecLlon for Lhem)
CLher poslLlon sufflclenL connecLlon beLween Lhe papers ls esLabllshed
slmply by a efeeoce lo tbe to tbe soe sbject otte o toosoctloo
4 CourL says parol permlsslble Lo furnlsh explanaLlon
kestatement second 132 Lhe memorandum may conslsL of several wrlLlngs lf one of
Lhe wrlLlngs ls slgned and Lhe wrlLlngs ln Lhe clrcumsLances clearly lndlcaLe LhaL Lhey
relaLe Lo Lhe same LransacLlon
D 2201 (1) only Lerm LhaL has Lo appear ls Lhe quanLlLy Lerm and LhaL doesn'L
have Lo be accuraLely sLaLed
4 unless Lhere ls a flnal record Lhe alleged Lerms are provable as parL of Lhe
agreemenL by relevanL evldence from any credlble source

DF ACTIVITIES CURP v. BRUWN {Frank Lloyd Wrigbt cbair]
acLs wanLs chalr LhaL u refused Lo sell clalms excepLlon Lo sLaLuLe of frauds (of u
admlLs ln LesLlmony LhaL Lhere was conLracL) u denles under oaLh LhaL conLracL had
been made
lssue wheLher sworn denlal ends Lhe case or may press on and lnslsL on dlscovery
noLes we see excepLlon Lo sLaLuLe of frauds lf admlL orally aL Lrlal LhaL Lhere was ln
facL a conLracL Lhen can be held llable for lL
4 Pere safeLy valve" of 2201(3)(b) ls closed
4 Pere osner uses a pollcy argumenL ln refuslng Lo permlL furLher dlscovery
(would be wasLe of Llme and resources)

1he dlscusslon here presupposes LhaL a valld and enforceable conLracL has been enLered
lnLo and LhaL one of Lhe parLles has maLerlally breached LhaL conLracL
1ypes of breach that tr|gger remed|es fa|| |nto three categor|es
4 allure wlLhouL [usLlflcaLlon Lo perform a conLracLual promlse or bargaln aL Lhe
Llme agreed
4 8epudlaLlon of Lhe promlse or bargaln
4 8ad falLh ln Lhe form of prevenLlng or hlnderlng Lhe oLher parLy's performance or
falllng Lo cooperaLe
Angloamerlcan law has a preference for moneLary compensaLlon lnsLead of speclflc
rlmary purpose of conLracL remedles however measured ls Lo compensaLe Lhe
aggrleved parLy for losses suffered raLher Lhan Lo punlsh Lhe conLracL breacher
4 1hus punlLlve damages rarely awarded
Tbe Basic Coal of Remedies for Breacb: Enforcement of tbe Expectation Interest
The Natuie of Expectation Inteiest
A valld and enforceable conLracL [usLlfles a fuLure expecLaLlon by each of Lhe parLles
(boLh enLlLled Lo expecL LhaL Lhe oLher wlll honor Lhe conLracLual promlse made and wlll
perform as underLaken)
4 Cne parLy breaches Lhe expecLaLlons of Lhe oLher have been dlsappolnLed
4 undamenLal goal of Lhe remedy for Lhe breach cure Lhe dlsappolnLmenL by
glvlng Lhe vlcLlm of Lhe breach exacLly whaL was promlsed and [usLlflably
expecLed under Lhe conLracL
1hls damage compensaLes for someLhlng LhaL was noL galned whaL Lhe plalnLlff should
have had
lace Lhe vlcLlm of breach ln Lhe poslLlon LhaL she would have been ln had no breach
LxpecLaLlon lnLeresL value of Lhe performance Lo her based on Lhe purpose of Lhe
4 lnLerpreLed ob[ecLlvely noL whaL Lhe parLy sub[ecLlvely belleved Lhey should geL
from Lhe conLracL
eans of Enfoicement: Piimacy of onetaiy Compensation ovei Specific Peifoimance
MosL dlrecL and accuraLe way of enforclng Lhe plalnLlff's reasonable expecLaLlons under
Lhe conLracL would be for Lhe courL Lo granL order for speclflc performance of Lhe
4 uefendanL requlred Lo perform as promlsed
Powever speclflc performance ls noL Lhe norm (reserved for unusual cases where
damages are shown Lo be lncapable of adequaLely compensaLlng Lhe plalnLlff)
Why does Lhe law prefer money equlvalenL?
4 Award of money damages was a remedy LhaL could be granLed by courLs of law
whereas speclflc performance was granLed only by a courL of equlLy
CourLs of equlLy were lnLended Lo lnLervene only when Lhe avallable
remedles aL law were lnadequaLe and Lherefore a plalnLlff who soughL
Lhe equlLable rellef of speclflc performance was requlred Lo show LhaL
Lhe naLure of Lhe expecLaLlon lnLeresL was such LhaL Lhe only means of
achlevlng adequaLe rellef was by Lhe speclflc enforcemenL of Lhe conLracL
4 lalnLlff awarded sum of money LhaL alms as closely as posslble Lo puL her ln
Lhe economlc poslLlon she would have been ln had Lhe conLracL been performed
eliance anu estitution as Alteinatives to Expectation
AlLhough expecLaLlon damages are Lhe prlmary remedy for breach of conLracL Lhey can
only be recovered Lo Lhe exLenL LhaL Lhe plalnLlff can prove LhaL Lhe breach deprlved her
of an economlc galn LhaL would have resulLed from Lhe performance promlsed by Lhe
defendanL ln Lhe conLracL
PCWLvL8 a plalnLlff's lnablllLy Lo prove expecLaLlon damages does noL always end Lhe
maLLer of rellef because she may be able Lo show LhaL she has suffered losses oLher
Lhan her defeaLed expecLaLlon
Llke expecLaLlon concelved of as a remedy based on afflrmaLlon of Lhe
8ellance damages alm Lo refund expenses wasLed or equlvalenL losses by
Lhe plalnLlff ln rellance on Lhe conLracL Lhereby resLorlng her Lo Lhe
sLaLus quo anLe (Lhe poslLlon she would have been ln had no conLracL
been enLered)
remlsed on Lhe Lheory of dlsafflrmance LreaLs Lhe breach as havlng
caused Lhe conLracL Lo fall away
Seeks Lo reLurn Lo Lhe plalnLlff Lhe value of Lhe beneflL conferred on Lhe
defendanL under Lhe breached conLracL
ocuses on Lhe exLenL of defendanL's enrlchmenL aL her expense
1he value of Lhe us promlsed performance generally Lhe conLracL prlce mlnus
whaLever beneflLs (expendlLures) lf any Lhe plalnLlff recelved from noL havlng Lo
compleLe hls own performance
Speclflc performance
nomlnal llke $1 damages ln name only dld someLhlng wrong buL dldn'L hurL anybody
negoLlaLed/llquldaLed damages A sum sLlpulaLed and agreed upon by Lhe parLles aL
Lhe Llme of enLerlng lnLo a conLracL as belng payable as compensaLlon for loss suffered
ln Lhe evenL of a breach
unlLlve damages

SULLIVAN v. UCUNNUR {failed nose |ob]
acLs geLs nose [ob doesn'L llke lL sues for breach of conLracL 2 counLs enLers lnLo
conLracL wlLh u where u promlses Lo perform plasLlc surgery and enhance appearance
u falls ln Lhls causlng paln and convenLlonal malpracLlce sulL
noLes [udge lnsLrucLs [ury LhaL enLlLled Lo ouL of pockeL expenses lncldenL Lo Lhe
operaLlon and she could also recover damages flowlng naLurally from u's breach of
4 CourL says you can'L really recover for paln because some paln ls always
expecLed from surgery
unless puL ln more paln Lhan would have had Lo ordlnarlly endure
4 ulfferenL and more lenlenL way of awardlng damages Lo recover any
expendlLures made by hlm and for oLher deLrlmenL followlng proxlmaLely and
foreseeably upon Lhe us fallure Lo carry ouL hls promlse
nelLher resLlLuLlon nor expecLaLlon
8LLlAnCL (value of orlglnal nose mlnus value of nose she has now)
(resLlLuLlon Loo meager (money for surgery) and expecLaLlon excesslve)
recovers for paln and sufferlng from Lhlrd operaLlon menLal dlsLress
Lnd of case notes
4 Why proLecL expecLaLlon? (le why have lL aL all?)
roLecLlng expecLaLlons rewards rlsk Laklng ln markeL LransacLlons and
Lherefore conLrlbuLes Lo allocaLlve efflclency
ueLers Lhe lnefflclenL breach (breach where value derlved when Lhe
breachlng parLy reemploys resources commlLLed Lo Lhe conLracL ls
equaled or exceeded by Lhe loss Lo Lhe promlsee
When law proLecLs expecLaLlon lnLeresLs parLles can plan more
effecLlvely aL Lhe Llme of conLracLlng
4 8esLlLuLlon docLor glvlng back expenses Lo plalnLlff
4 8ellance expenses Lo dr expenses Lo Lhlrd parLy any provable commerclal
losses menLal ln[urles and paln and sufferlng
Comment p.
roperLy rules deLer 3
parLles from nonconsensually Laklng enLlLlemenL
4 unlLlve ln naLure
4 1hese rules moLlvaLed by compensaLlon
LlablllLy rules compensaLe an enLlLlemenL holder for Lhe loss of an enLlLlemenL LhaL ls
nonconsensually Laken
4 1hese rules moLlvaLed by deLerrence
Calabresl and Melamed suggesL LhaL properLy rule proLecLlons more efflclenL when
LransacLlon cosLs low and llablllLy rules more efflclenL when LransacLlon cosLs hlgh
LlablllLy rules make more sense when parLles don'L have an opporLunlLy Lo conLracL
4 le ln a LorL seLLlng

second cenLral conLrlbuLlon of law and economlcs Lo conLracLual analysls
Coase 1heorem
4 ln a world wlLh no legal LransacLlon cosLs Lhe cholce of legal rules would noL
affecL efflclency because prlvaLe parLles would always bargaln Lhelr way Lo
opLlmal behavlor
SuggesLs LhaL lf renegoLlaLlon were cosLless properLy rules and llablllLy
rule proLecLlons would be equally efflclenL
4 ConLracLual promlse was merely Lhe duLy Lo perform or Lo pay (compensaLory)
Coase Lheorem lnvlLes Lrladlc concepLlon of promlse
4 erform
4 ay damages
4 8enegoLlaLe your way ouL of performance

Comment p. : restitution as remedy for breacb of contract
ln Sulllvan clalmed and recovered boLh Lhe paymenL made and oLher ouL of pockeL
cosLs as rellance expendlLures
would also have been enLlLled Lo resLlLuLlon
ln cases where Lhe paymenL of money ls noL lnvolved whaL ls Lhe measure of Lhe
beneflL conferred on Lhe defendanL?
4 ls lL reasonable value of servlces measured ln markeL Lerms or Lhe value Lo Lhe u
of whaL was recelved or someLhlng else?
8esLlLuLlon as a measure damages for breach of conLracL vs resLlLuLlon as a separaLe
cause of acLlon ln slLuaLlons of un[usL enrlchmenL
4 ln un[usL enrlchmenL law of nonconsensual or nonbargalned beneflLs

Manifestation of Mutual Assent
8argaln relaLlonshlp (Lhese Lwo are conslsLenL wlLh Lhe concepL of conslderaLlon)
4 AgreemenL
4 erformance
negoLlaLlon over Lerms may precede Lhe flnal expresslon of agreemenL
4 AssumpLlon lndlvldual bargalners wlll deflne Lhelr wanLs ln a raLlonal way and
seek Lo saLlsfy Lhem Lhrough a process of volunLary exchange
4 AssumpLlon boLh parLles wlll galn from Lhe compleLed exchange
Cnce negoLlaLlons have commenced Lo whaL exLenL ls one parLy prlvlleged Lo wlLhdraw
for any reason wlLhouL llablllLy?
kestatement 24 Mutua| Assent
3 common |aw requ|rements for Mutua| Assent
4 Serlous lnLenLlon by Lhe offeror Lo be bound
4 1erms musL be reasonably cerLaln or deflnlLe
4 Cffer musL be communlcaLed

Ascertainment of Assent: tbe Ub|ective Test
acLs belleves u exLended hls employmenL k by saylng you're all rlghL" when sald
he would qulL Lhe [ob conLlnued worklng four monLhs laLer was flred sued for breach
of k
noLes uld whaL was sald consLlLuLe a conLracL of reemploymenL on Lhe prevlous Lerms
lrrespecLlve of Lhe |ntent|on]purpose of Lhe employer?
4 1o consLlLuLe a k there must be a meet|ng of the m|nds of Lhe parLles and boLh
musL agree Lo Lhe same Lhlng ln Lhe same sense
4 lnner lnLenLlon of Lhe parLles cannoL make a k lf Lhe words used lndlcaLe
lnLenLlon of Lhe parLles ln express conLracLs ls Lo be deduced from words
LhaL parLles have used
Applles Lo oral and wrlLLen ks
4 MeeLlng of Lhe mlnds ls an essenLlal parL of k
4 SLandard would a reasonable man Lake Lhese words Lo mean Lhere was a k?
ln Lhls case ?LS

LUCY v. ZEHMER {|oking offer]
acLs says u agreed Lo sell hlm a LracL of land u says he was drunk and Lhe k does noL
counL u alleges Lhls was [oke buL Lhere was evldence of negoLlaLlon beLween Lhe
parLles k ls valld
noLes wenL and ralsed Lhe money necessary Lo pay u (LhoughL lL was a leglLlmaLe k)
4 Pave Lo look Lo ouLward expresslon of a person as manlfesLlng hls lnLenLlon
raLher Lhan Lo secreL and unexpressed lnLenLlon
1he law lmpuLes Lo a person an lnLenLlon correspondlng Lo Lhe
reasonable meanlng of hls words and acLs"
O undlsclosed lnLenLlon does noL counL
4 !udge by a sLandard of reasonableness
CLher noLes
4 Cb[ect|ve test proLecLs Lhe sLablllLy of conLracLual relaLlonshlps by enabllng
one Lo acL upon reasonable appearance
4 lnLenL derlved from conslderaLlon of Lhelr words wrlLLen and oral and Lhelr
acLlons secreL hopes and wlshes counL for noLhlng
4 CourLs musL place Lhemselves ln Lhe same poslLlon Lhe parLles occupled when
Lhe k was enLered lnLo and vlew Lhe Lerms and lnLenL of Lhe agreemenL ln Lhe
same llghL ln whlch Lhe parLles dld when Lhe same was formulaLed and accepLed

WRENCH v. TACU BELL {duplicate Cbibuabuas]
acLs sulng for breach of k by u 1aco 8ell u used Chlhuahua LhaL had orlglnally
LhoughL of ln a markeLlng campalgn
noLes Imp||ed |n Iact ontract
4 lnLenLlon Lo enLer lnLo a k ls noL manlfesLed by dlrecL or expllclL words beLween
Lhe parLles buL lnsLead ls gaLhered by lmpllcaLlon or proper deducLlon from Lhe
conducL of Lhe parLles language used or Lhlngs done by Lhem or oLher
perLlnenL clrcumsLances aLLendlng Lhe LransacLlon"
8equlres muLual assenL and conslderaLlon
8equlres all Lhlngs LhaL express conLracL requlres
4 lmplled ln facL conLracLs ofLen arlse where one accepLs a beneflL from anoLher
for whlch compensaLlon ls cusLomarlly expecLed
romlse Lo pay falr value may be lmplled
4 CourL focuses on evldence LhaL Lhere was conLracL lmplled ln facL (sollclLaLlon of
ldeas wrlLLen proposals eLc)
lf proves facLs Lhere ls lmplled ln facL conLracL
CLher noLes
4 kestatement Second 24
1he man|festat|on of w||||ngness to enter |nto a barga|n so made as to
[ust|fy another person |n understand|ng that assent to that barga|n |s
|nv|ted and w||| conc|ude |t
4 Cffer creaLes a power of accepLance ln Lhe offeree lf
Serlous lnLenLlon by Lhe offeror Lo become bound
1erms musL be reasonably cerLaln or deflnlLe
Cffer musL be communlcaLed
4 ;DASI k v IMLIL IN IA1 k
lmplled ln facL
O 1here ls no express proof
O lf you can esLabllsh Lhere ls a k Lhere ls no dlfference beLween
LhaL and normal k
O MuLual assenL
Cuasl k
O ConLracL lmplled ln law
O 8ased upon un[usL enrlchmenL
O Cne parLy unfalrly enrlched
O ln Lerms of elemenLs
4 never had manlfesLaLlon of muLual agreemenL
4 Won'L be acLlng conducL LhaL allows courL Lo deLermlne
LhaL Lhere was acLual k lnvolved
Cuasl k and conLracL lmplled ln law MLAn 1PL SAML 1PlnC

acLs sLems from alleged refusal of u Lo sell Lo a fur plece whlch lL had offered for sale
ln a newspaper adverLlsemenL 2 adverLlsemenLs 2 coaLs for $1 fur sLole responds Lo
ad on Lwo separaLe occaslons and Lold by sLore LhaL Lhey were only selllng Lo women
sLore's house rule"
noLes courL says sufflclenL muLuallLy of obllgaLlon Lo consLlLuLe conLracL of sale offer
by u of Lhe sale of Lhe fur was clear deflnlLe expllclL and lefL noLhlng open for
4 u says ad was unllaLeral offer"
Can be wlLhdrawn wlLhouL noLlce
Says ads are noL offers whlch become ks as soon as any person Lo whose
noLlce Lhey may come slgnlfles hls accepLance by noLlfylng Lhe oLher LhaL
he wlll Lake a cerLaln quanLlLy ofLhem
O Ads are lnvlLaLlon for offer of sale accepLance by seller makes lL a
noL supporLed by conslderaLlon and could be wlLhdrawn aL wlll and
wlLhouL noLlce
4 When ad ls clear and deflnlLe ln Lerms Lhls can be consLrued Lo be an offer
AccepLance compleLes Lhe k
lrsL ad up Lo $100 (no deflnlLe value buL offer was clue)
Second ad x amounL aL x prlce flrsL come flrsL serve (enforce second one and noL Lhe

LEUNARD v. PEPSICU {Harrier et Ad]
acLs sees epslSLuff commerclal and belleves Lhls consLlLuLes offer of a Parrler !eL lf
he can geL enough polnLs u epsl re[ecLs hls money as Lhe [eL was noL menLloned as
one of Lhe Lhlngs you can geL ln Lhe epsl SLuff caLalog sues for speclflc performance
of an alleged offer of a Parrler !eL feaLured on epsl's Lv adverLlsemenL
noLes uld Lv commerclal consLlLuLe an offer?
4 CourL clLes Lhree reasons why s demand cannoL prevall as a maLLer of law
Commerclal was merely ad noL a unllaLeral offer
Ad would noL lead reasonable person Lo conclude LhaL a sofL drlnk
company would glve away a [eL as parL of a promoLlon
no wrlLlng beLween Lhe parLles sufflclenL Lo saLlsfy SLaLuLe of rauds
4 8uLL adverLlsemenL does noL consLlLuLe an offer
kestatement second 26 advert|sements of goods by d|sp|ay s|gn
handb||| newspaper rad|o or te|ev|s|on are not ord|nar||y |ntended or
understood as offers to se||
Such ads are undersLood Lo be mere requests to cons|der and exam|ne
and negot|ate and no one can reasonably regard Lhem as oLherwlse
unless Lhe clrcumsLances are excepLlonal and Lhe words used are plaln
and clear
O lf ad ls deflnlLe and expllclL and leaves noLhlng open for
negoLlaLlon Lhen lL ls an offer
4 1hls commerclal noL sufflclenLly deflnlLe
1hls commerclal soughL
O kLIkCAL kCMISL expressed Lhrough accepLance of and
compllance wlLh Lhe Lerms of Lhe Crder orm
user of epsl polnLs can only geL sLuff by way of Lhe caLalog
CLher noLes
4 k lmplled ln facL vs k lmplled ln law
lmplled ln facL same as normal conLracL (expecLaLlon Lhe same)
lmplled ln law only geL resLlLuLlon (value Lhe defendanL goL)

PRUBLEM p. 8: Wben is a Price Solicitation an Uffer?
uCC does have provlslons concernlng offer buL never acLually deflnes whaL lL ls
4 ln lnsLances where uCC sllenL go Lo resLaLemenL (here 24)
CuesLlon of language used ln LransacLlon
4 Seller has obllgaLlon Lo be clear
4 ConLexL seems Lo lmply whaL ls meanL by Lhe offer"

SUUTHWURTH v. ULIVER {land offer]
acLs u approaches Lo lnqulre abouL hls posslble lnLeresL ln purchaslng grazlng land
lnLeresLed buL prlce and permlLs noL deLermlned u sends leLLer wlLh lnfo abouL Lhe
properLy Lo (also sends leLLer Lo Lwo oLher people) responds l accepL your offer" u
responds by saylng Lhls was noL offer buL served as sLarLlng polnL for furLher
noLes under all Lhe clrcumsLances and facLs surroundlng Lhe Llme Lhe leLLer was
recelved would a reasonable person ln poslLlon of undersLand Lhe leLLer Lo be an offer
Lo sell Lhe land? Was u's leLLer acLually an offer?
4 CourL says ?LS because of surroundlng clrcumsLances"
4 rlce quoLaLlons
alLhough a prlce quoLaLlon sLandlng alone ls noL an offer Lhere may be
clrcumsLances under whlch a prlce quoLaLlon when consldered LogeLher
wlLh facLs and clrcumsLances may consLlLuLe an offer whlch lf accepLed
wlll resulL ln a blndlng conLracL"
Can make lL Lo more Lhan one person
4 SLrongesL gulde ls Lo look aL whaL reasonable man ln Lhls Lype of slLuaLlon would
1hls ls anoLher manlfesLaLlon of Lhe ob[ecLlve LesL
4 Look aL language does expresslon name parLles? lf so more llkely Lo be
consLrued as an offer
1he more deflnlLe a proposal Lhe more reasonable lL ls Lo greaL Lhe
proposal as lnvolvlng a commlLmenL
Can look aL sub[ecLlve lnLenL of buL also have Lo Lake lnLo conslderaLlon
prevlous lnLenLlon ln selllng Lhe land
ManlfesLaLlon of prevlous lnLenLlon ls whaL ls conLrolllng ln Lhls Lype of
slLuaLlon raLher Lhan person's acLual lnLenL"
4 SLaLuLe of rauds?
Sale of land covered by sLaLuLe
ls Lhere sufflclenL wrlLlng? WrlLlng slgned by person agalnsL whom
enforcemenL ls soughL

acLs and u communlcaLe abouL sale of sLock sends deLalled lnsLrucLlons abouL
selllng Lhe sLock and Lerms of accepLance of hls offer Lo buy u wanLs anoLher
counLeroffer lnvlLes Lo conLlnue negoLlaLlons Lrled Lo accepL offer" buL Lhls has no
legal slgnlflcance slnce Lhere was no offer Lo be accepLed Meanwhlle execuLes
agreemenL wlLh Lhlrd parLy based on bellef LhaL he had Lhe sLock from u
lssue wheLher u's leLLer could reasonably be consLrued as an offer C8 wheLher lL was
merely lnvlLaLlon for Lo renew offer Lo u
4 PCLu u's leLLer was lnvlLaLlon Lo conLlnue negoLlaLlons
LeLLer sald Lhey remalned recepLlve Lo offer" from 8reLz
nC CL8
4 LhoughL he had k because he execuLed agreemenL wlLh Lhlrd parLy on lLs basls
4 CourL says Lhere was no k aL Lhe Llme made k wlLh Lhlrd parLy

EQUITABLE LIFE v. FIRST NATIUNAL BANK {ability to balt an auction]
acLs courL orders properLy Lo be sold aL publlc aucLlon uay before sale owners of Lhe
Lwo morLgages enLer lnLo agreemenL and one agrees Lo wlre money Lo pay off Lhe
debLs rlor Lo Lhe wlrlng sherlff ln charge of aucLlon was Lold LhaL sale mlghL be called
off and he would be conLacLed prlor Lo Lhe sale ALLorney for LqulLable aLLempLs Lo
conLacL sherlff wlLh no answer and flnds ouL sale golng on sherlff conLlnues Lo aucLlon
desplLe noLlce
noLes Can a properLy owner cancel a sale afLer blddlng beglns?
4 ?es ln aucLlon wlLh reserve
efau|t assumpt|on ls LhaL aucLlon ls wlLh reserve unless oLherwlse
4 8uLL seller may wlLhdraw aL any Llme before bld ls accepLed
ower of sale ls ln Lhe person Lo whom Lhe morLgager glves lL LhaL ls Lhe
O Pere sherlff does noL have Lhls power
4 WlLhouL reserve" afLer aucLloneer calls for blds on an arLlcle or loL LhaL arLlcle
or loL cannoL be wlLhdrawn unless no bld ls made wlLhln a reasonable Llme
4 WlLh reserve" may wlLhdraw properLy from aucLlon
4 noLlce of sale rlghLfully wlLhdrawn by LqulLable and person LhaL bld on Lhe
properLy had no offer Lo accepL
4 8ldder noL bound unLll Lhere ls a manlfesLaLlon of lnLenL Lo accepL (le gavel
goes down)
4 AucLlon conLracLlng Lechnlque lnvoked mosL frequenLly by sellers of goods or
land Lo sLlmulaLe prlce compeLlLlon
1erms of sale usually seL ouL ln adverLlsemenLs and oLher wrlLlngs before
Lhe aucLlon ls conducLed
4 ln mosL aucLlons only lmporLanL Lerm lefL for agreemenL ls prlce
1he law supporLs Lhe seller an adverLlsemenL descrlblng properLy Lo be
sold Lo Lhe hlghesL bldder aL a sLaLed Llme and place ls noL an offer even
Lhough Lhe power Lo wlLhdraw Lhe goods ls noL expressly reserved
AdverLlsemenLs merely sollclL offers whlch Lhe seller ls prlvlleged Lo
4 D 2328(3) provldes LhaL Lhe hlgh bldder may reLracL Lhls bld unLll Lhe
aucLloneer's announcemenL of compleLlon of Lhe sale" and LhaL Lhe reLracLlon
does noL revlve any prevlous blds whlch have lapsed upon Lhe maklng of a hlgher
4 "w|thout reserve" language lnforms prospecLlve bldders LhaL Lhe owner ls
dlspenslng wlLh a broad power Lo wlLhdraw goods once Lhey are puL up for sale
4 ub||c contract|ng
Sealed blddlng unfolds ln a serles of dlsLlncL sLeps
O ConLracLlng offlclals prepare an lnvlLaLlon for blds (l8) whlch
descrlbes Lhe governmenL's needs sLaLes Lhe baslc Lerms and
O l8 ls dlsLrlbuLed or oLherwlse publlclzed Lo a sufflclenL number of
prospecLs so as Lo lnsure adequaLe compeLlLlon
O 8ldders prepare and submlL Lhelr blds 1hls bld ls Lhe offer 1o be
ellglble for accepLance lL musL be submlLLed on Llme and conform
ln every maLerlal respecL Lo Lhe l8
4 le musL be responslve bld"
O blds are opened and evaluaLed by Lhe governmenL
4 bldder cannoL change bld unless a mlsLake has been made
4 offeree can re[ecL all blds lf Lhere ls compelllng reason"
O award ls made Lo Lhe successful bldder
4 award accepLance
EBAY in class example
Lbay ls a venue (noL aucLloneer)
8lndlng blds
4 LxcepL for lLems llsLed under Lhe nonblndlng bld pollcy lf you recelve aL leasL
one bld aL or above your sLaLed mlnlmum prlce (oraL or above Lhe reserve
prlce) you are obllgaLed as Lhe seller Lo compleLe Lhe LransacLlon wlLh Lhe
hlghesL bldderunless Lhere ls an excepLlonal clrcumsLance

Acceptance by Promise
AccepLance of an offer ls a manlfesLaLlon of assenL Lo Lhe Lerms Lhereof made by Lhe
offeree ln a manner requlred or lnvlLed by Lhe offeror kS 2
4 manlfesLaLlon of assenL" words acLs (rellance)
WhaL would reasonable offeror Lhlnk?
4 Lerms Lhereof" mlrror lmage rule
4 ln a manner requlred or lnvlLed by Lhe offeror" offeror masLer of Lhe offer

LASALLE NATIUNAL BANK v. VECA {failed land offer]
acLs confllcL over a real esLaLe k 1rusLee's purchaslng agenL and seller (vega) slgn Lhe
k buL noL slgned by Lhe LrusLee for Lhe purchaser (whlch was a provlslon of Lhe k)
noLes Lhe 1rusL dld noL execuLe Lhe documenL Lhere was no accepLance and Lhus no k
never had offer never had accepLance never blndlng k formed
4 CL8 an acL on Lhe parL of one person glvlng anoLher person Lhe legal power
of creaLlng Lhe obllgaLlon called a k
rom Lhe language here lL ls apparenL LhaL Lhere was Lo be no k unLll lL
was execuLed by Lhe LrusL
4 WhaL ls Lhls documenL?
lnvlLaLlon Lo make an offer when vega slgns becomes an offer Lo bank
4 Cfferor has compleLe conLrol over an offer and may condlLlon accepLance Lo Lhe
Lerms of Lhe offer
1he language of an offer may moreover govern Lhe mode of accepLance
requlred where lL requlres wrlLLen accepLance no oLher form may be
4 SollclLaLlon Lo make an offer only
4 uocumenL does noL have Lo be of your creaLlon ln order Lo be masLer of Lhe offer
HENDRICKS v. BEHEE {restricted real estate offer]
acLs SmlLhs and 8ehee negoLlaLe real esLaLe k Cffer malled Lo SmlLhs who slgned lL
8efore 8ehee noLlfled LhaL Lhe SmlLhs accepLed Lhe offer 8ehee wlLhdrew Lhe offer by
noLlfylng Lhe real esLaLe agenL of Lhe wlLhdrawal rlor Lo Lhls 8ehee recelves no noLlce
LhaL hls offer had been accepLed by Lhe SmlLhs
noLes no k unLll accepLance of an offer ls communlcaLed Lo Lhe offeror
4 uncommunlcaLed lnLenLlon Lo accepL an offer ls noL an accepLance (noLlce
always essenLlal)
4 CommunlcaLlon of accepLance of k Lo an agenL of offeree ls noL sufflclenL and
does noL blnd Lhe offeror
4 Cfferor may wlLhdraw hls offer aL any Llme before accepLance and
communlcaLlon of LhaL facL Lo hlm
4 8ehee's wlLhdrawal was proper
4 no efforL Lo communlcaLe accepLance no accepLace
CLher noLes
4 ffeo#s Mostey of ffe
Cfferor ls masLer of Lhe offer
Cfferor may sLlpulaLe Lhe Lerms upon whlch he or she ls wllllng Lo
bargaln and also prescrlbe Lhe meLhod by whlch Lhe offeree may accepL
(fashlons power of accepLance)

EVER-TITE RUUFINC v. CREEN {performance as acceptance]
acLs u wanLed Lo reroof home u execuLes documenL and seL ouL ln deLall Lhe work
Lo be done and prlce Lo be pald k says agreemenL shall become blndlng only upon
wrlLLen accepLance C8 upon commenclng performance of Lhe work" geLs Lhe
necessary credlL reporLs and maLerlals upon arrlvlng aL us house saw oLher workmen
already worklng !udgmenL for
noLes Was Lhere valld accepLance of Lhe k by u?
4 Who makes Lhe offer?
Cwner of Lhe house
Lver LlLe provldes sLandard form k
Creen slgns lL
MomenL Creen slgns lL Lransforms Lhe drafL k lnLo an offer
Lver 1lLe noL bound aL LhaL momenL however
4 ormal accepLance of k was noL made under Lhe slgnaLure and approval of an
agenL of plalnLlff
lL was however Lhe lnLenLlon of Lo accepL Lhe k by sLarLlng work
whlch was one of Lhe provlslons ln Lhe lnsLrumenL of accepLance
4 us aL no Llme noLlfled or aLLempLed Lo noLlfy of Lhelr lnLenLlon Lo LermlnaLe or
cancel Lhe k
no Llme llmlL speclfled ln k wlLhln whlch lL was Lo be accepLed or wlLhln
whlch work was Lo begln
4 8uLL offer proposed may be wlLhdrawn before lLs accepLance and LhaL no
obllgaLlon ls lncurred Lhereby
O ower Lo creaLe a k by accepLance of an offer LermlnaLes aL Lhe
Llme speclfled ln Lhe offer or lf no Llme speclfled aL Lhe end of a
reasonable Llme
O 8easonable Llme ls a quesLlon of facL dependlng on Lhe naLure of
k proposed
4 1hls k dld noL speclfy Llme wlLhln whlch lL was Lo be accepLed or when work Lo
See kestatement Second S3 and S4
Lxpectat|on damages

-{] - a K can be maue "in any mannei sufficient to show agieement"
- - acceptance scenaiios
- - allows uefinite acceptance with othei teims

acLs u manufacLurer of vacclne decldes Lo ralse cosLs ln anLlclpaLlon of lncreased
lnsurance flnds ouL abouL lmpendlng prlce lncrease and orders vacclnes before lL
Lakes effecL hoplng Lo avold lL
noLes u shlps less Lhan whaL asks for aL Lhe lower prlce Lhen says Lhe resL wlll be
shlpped aL Lhe normal prlce
4 uld u enLer lnLo k Lo sell Lhe orlglnal 1000 vlals?
Pow Lo characLerlze prlce llsL?
O lnvlLaLlon Lo make an offer
ls shlpmenL of Lhe 30 vlals accepLance?
O D 2206 Cffer and Acceptance
O 3 acceptance scenar|os
4 romlse
4 erformance
4 nonconformlng performance
O ShlpmenL of Lhe 30 vlals ls nonconformlng accepLance
4 shlpmenL of nonconformlng goods does noL consLlLuLe an
accepLance lf Lhe seller seasonably noLlfles Lhe buyer LhaL
Lhe shlpmenL ls offered only as an accommodaLlon Lo Lhe
4 Lederle had no obllgaLlon Lo make Lhe parLlal shlpmenL
and dld so only as a favor Lo Lhe buyer
O noL accepLance because u noLlfled lL was an accommodaLlon
O 1he shlpmenL ls a counteroffer
2207 a||ows def|n|te acceptance w|th other terms

CARLILL v. CARBULIC SMUKE BALL {medical warrantee]
acLs reward Lo be pald for person who uses carbollc smoke ball and sLlll geLs Lhe flu
uses Lhe ball and geLs Lhe flu wanLs Lhe reward
noLes Lhls ls offer Lo anyone who performs Lhe condlLlon named ln Lhe adverLlsemenL
and anybody who performs Lhe condlLlon accepLs Lhe offer
4 erformance of condlLlon accepLance of offer
4 unllaLeral promlse for performance
4 ls offer accepLed?
u argues nC
CourL says lL ls unreasonable Lo requlre people Lo wrlLe ln saylng Lhey
accepL Lhe offer
When does accepLance occur?
O When you buy Lhe ball and use lL accordlng Lo Lhe adverLlsemenL
RS Adoption
Sect|on S4 where an offer lnvlLes an offeree Lo accepL by renderlng a performance no
noLlflcaLlon ls necessary Lo make such an accepLance effecLlve unless Lhe offer requesLs
such a noLlflcaLlon

CLUVER v. EWISH WAR VETERANS UF US {reluctant unilateral volunteer]
acLs u offers reward for glvlng lnfo abouL a murderer noLlce of reward publlshed ln
paper 1hls ls an offer because no facLs remaln Lo be deLermlned ls clear and deflnlLe
8easonable person readlng Lhe noLlce as a maLLer of law ls enLlLled Lo Lhlnk Lhls ls an
offer Lhey can accepL (by performance) glves lnfo Lo pollce unaware of reward
afLerward learns of reward and Lrles Lo clalm lL u wlns
noLes slgn ls offer buL Lhere was no accepLance because of a lack of muLual consenL
and conslderaLlon
4 1here was no k because Lhere was no accepLance
4 Can'L be k unless clalmanL when glvlng Lhe deslred lnfo know of Lhe offer of Lhe
reward and acLed wlLh Lhe lnLenLlon of accepLlng such offer
Lack of muLual consenL and conslderaLlon (bargalnedfor exchange)
noL belng lnduced by promlse buL by Lhe pollce asklng quesLlons
4 lL ls lmposslble LhaL Lhere should be an accepLance unless Lhe offeree knows of
Lhe exlsLence of Lhe offer
CLher noLes
4 Mere offer or promlse Lo pay does noL glve rlse Lo a k LhaL requlres assenL or
meeLlng of Lwo mlnds and Lherefore ls noL compleLe unLll offer ls accepLed
Cnly becomes blndlng when anoLher mlnd has embraced and accepLed lL
4 Doloteo ootoct 5ope
unllaLeral conLracL offer whlch lnvlLes accepLance by performance of
Lhe bargalned for exchange and does noL lnvlLe accepLance by a promlse
4 ulsLlncLlon beLween reward/adverLlsemenL
4 Would have goLLen Lo same resulL by saylng Lhere was no conslderaLlon

CUMMENT: Acceptance by Performance under Restatement Second, p. 9
D 2206(1)(a) unless oLherwlse unamblguously lndlcaLed an offer shall be
consLrued as lnvlLlng accepLance ln any manner and by any medlum reasonable ln Lhe
Second resLaLemenL abollshes dlsLlncLlon beLween bllaLeral and unllaLeral ks
4 CharLs a mlddle ground for accepLance beLween assenL expressed by words of
promlse and assenL expressed by compleLlng a performance LhaL Lhe offeror
requlred excluslvely for accepLance
ConLracLual duLles may be dlscharged lf Lhe offeree has reason Lo know LhaL Lhe
offeror has no adequaLe means of learnlng of Lhe performance wlLh reasonable
prompLness and falls Lo exerclse reasonable dlllgence Lo noLlfy Lhe offeror of
accepLance" kestatement second S4(2)(a)

acLs uenney ls graln farmer Scoular ls graln company uenny grows Scoular buys and
resells arLles dlscuss forward k for 13000 bushels uenny wanLs $3 Scoular declares
prlce noL Lhen avallable our days laLer Scoular relylng on uenny's offer sold graln Lo a
buyer aL a raLe sufflclenL Lo meeL uenny's prlce unsuccessfully aLLempLs Lo conLacL
uenny uenny dellvers Lo anoLher graln operaLor CourL flnds for uenny
noLes uenny conLends under CC's uCC he should noL be bound Lo a k based only on
hls oral offer Lo sell Scoular's conLracLlng Lo Lhlrd parLy does noL consLlLuLe accepLance
lf k enLered lnLo noL enforceable because noL ln wrlLlng and slgned by boLh parLles
4 uenny had numerous deallngs wlLh Scoular ln Lhe pasL
spoL sale" basls
O WlLhouL negoLlaLlng k beforehand arrlve aL graln elevaLor wlLh
crop and bargalned for and recelved paymenL based on Lhe
markeL prlce prevalllng aL Lhe Llme
forward k' basls
O Agreed Lo dellver crop Lo elevaLor aL some laLer Llme for prlce
LhaL was locked ln as of Lhe daLe Lhe agreemenL was reached
4 When relylng on beglnnlng of performance as mode of accepLance have Lo
noLlfy of accepLance wlLhln reasonable Llme
Scoular's conLracLlng dld noL consLlLuLe performance
Scoular dld noL begln Lo pay uenny from Lhe 3
parLy k
4 course of conducL" Lhe way people ln graln world work Lhls consLlLuLes
leglLlmaLe buslness pracLlce
4 ls Lhere valld offer?
D 220S flrm offer wlLhouL conslderaLlon musL be ln wrlLlng
O nere there |s no wr|t|ng
4 uld enLerlng lnLo resale k consLlLuLe accepLance?
8eglnnlng performance ls wlrlng cash noL enLerlng lnLo anoLher k wlLh
Slnce dld noL offlclally begln performance Lhere ls no accepLance
4 CourL says LransacLlon wlLh 3
parLy Loo openended Lo consLlLuLe an
unamblguous expresslon on Scoular's parL Lo be bound Lo a k wlLh uenny

Silence as Acceptance
@be lobe of DooJeeJ MecbooJlse
4 Malllng of unordered merchandlse consLlLuLe unfalr meLhod of compeLlLlon and
unfalr Lrade pracLlce and are ln vlolaLlon of Lhe 1CA
4 Any klnd of malllng llke Lhls can be LreaLed as a glfL by Lhe reclplenL who shall
have Lhe rlghL Lo reLaln use dlscard or dlspose of lL ln any manner he sees flr
wlLhouL any obllgaLlon whaLsoever Lo Lhe sender
4 unordered merchandlse" merchandlse malled wlLhouL Lhe prlor expressed
requesL or consenL of Lhe reclplenL
kS2 69

AMMUNS v. WILSUN {KC sbortening]
acLs wanLs Lo buy shorLenlng from u acLs Lhrough agenL of u who submlLs order
buL Lhen flnds ouL order had been decllned 12 days laLer AgenL dld noL have auLhorlLy
Lo blnd Lhe shorLenlng company 8ooklng does noL quallfy as accepLance submlLs
order Lhls ls an offer
noLes CourL says should be up Lo Lhe [ury Lo declde of 12 days enough Lo reconslder an
offer Lo purchase shorLenlng
4 1yplcally sllence noL consldered accepLance because we do noL wanL Lo enforce
ks agalnsL offerees LhaL may noL have undersLood LhaL a k exlsLed
4 lf case Lrled Loday lL would be governed by uCC
4 Sllence as accepLance?
Would have Lo prove LhaL lL was reasonable Lo belleve LhaL sllence was
accepLance based on prlor deallngs beLween parLles
Sub[ecLlvely belleved offer had been accepLed (based on prevlous
acLlons of u)
4 lf noL applylng uCC kestatement Second 69
Cfferee's sllence and lnacLlon are an accepLance on|y
O Cfferee Lakes beneflL (wlLh opporLunlLy Lo re[ecL and knowlng
Lhey weren'L free)
O Cfferor has glven offeree reason Lo undersLand LhaL assenL may
be manlfesLed Anu offeree's sllence ls lnLended Lo accepL
O Where because of prevlous deallngs or oLherwlse lL ls reasonable
LhaL Lhe offeree should noLlfy Lhe offeror lf he does noL lnLend Lo
Pere seller should have noLlfled Lhe buyer
4 uCC appllcaLlon
rlor course of conducL ls relevanL
ln Lhls case uCC does noL have an appllcable provlslon so you go Lo
common law
CLher noLes
4 AcLual auLhorlLy prlnclpal confers Lhe auLhorlLy
ower of Lhe agenL Lo affecL Lhe legal relaLlons of Lhe prlnclpal by acLs
done ln accordance wlLh Lhe prlnclpal's manlfesLaLlons of consenL Lo hlm
O Lxpress spelled ouL by prlnclpal ln dlrecLlons Lo Lhe agenL
O lmplled lnferred from dlrecLlons Lo Lhe agenL cusLoms of Lrade
4 ApparenL auLhorlLy resulLs from prlnclpal's manlfesLaLlons Lo Lhlrd parLles (llke
rumor mlll)
4 1he one deallng wlLh agenL musL prove LhaL Lhe prlnclpal was responslble for Lhe
appearance of auLhorlLy by dolng someLhlng or permlLLlng Lhe agenL Lo do
someLhlng whlch reasonably led oLhers lncludlng Lhe plalnLlff Lo belleve LhaL
Lhe agenL had Lhe auLhorlLy he purporLed Lo have

CUMMENT: Tbe Role of Conduct As Evidence of Agreement in UCC Article
D 1201(3) agreemenL" bargaln of Lhe parLles ln facL as found ln Lhelr language or
by lmpllcaLlon from Lhe clrcumsLances lncludlng course of deallng or usage of Lrade or
course of performance as provlded ln Lhls AcL
conLracL" LoLal legal obllgaLlon whlch resulLs from Lhe parLles' agreemenL as affecLed
by Lhls AcL and any oLher appllcable rules of law
D 2206(1)(a) offer could be accepLed by prompL promlse Lo shlp" or by Lhe
prompL or currenL shlpmenL of conformlng goods"
4 lnvlLed meLhod of accepLance ls Lhe conducL of shlpmenL

ADAMS v. LINDSELL{misdirected missive]
acLs u sends leLLer Lo offerlng Lo sell wool buL lL ls mlsdlrecLed (mlslabeled)
wrlLes back accepLlng offer on us Lerms buL by Lhen u had already sold Lhe wool Lo
anoLher person CourL holds for because of us negllgence and Lhey are llable for Lhe
loss susLalned by
noLes u argues LhaL unLll Lhey recelved Lhe accepLance Lhey were noL bound CourL
re[ecLs Lhls argumenL
4 AL Lhe momenL accepLed offer u became bound
4 8r|ght ||ne ru|e accepLance ls effecLlve aL Lhe Llme when Lhe leLLer ls puL of Lhe
possesslon of Lhe offeree and placed lnLo Lhe mallbox
4 kestatement 63 acceptance by any med|um reasonab|e under the
c|rcumstances |s effect|ve on d|spatch
unless Lhe offer provldes oLherwlse (a) an accepLance made ln a
manner and by a medlum lnvlLed by an offer ls operaLlve and compleLes
Lhe manlfesLaLlon of muLual assenL as soon as puL ouL of Lhe offeree's
possesslon wlLhouL regard Lo wheLher lL ever reaches Lhe offeror"
4 1hls ls a defaulL rule you can conLracL around lL accepLance valld upon
4 8ound aL Lhe momenL of malllng of accepLance
Lven Lhough offeror dld noL know
1hls only applles Lo accepLance
uoes noL maLLer lf leLLer acLually recelved as long as offeree ls noL aL
faulL for Lhe delay ln accepLance
4 kestatement Second 67
4 lf offeror calls Lo revoke offer? 1oo laLe malled accepLance already fully forms
Lhe k
4 WhaL abouL counLeroffer?
Can only accepL once recelve counLeroffer (effecLlve when recelved)
4 lf you re[ecL vla mall Lhen call and accepL you have Lhe k formed
4 Mallbox rule CnL? ALlLS 1C ACCL1AnCLS all oLhers (revocaLlon
counLeroffer re[ecLlon musL be recelved by Lhe parLles)
4 Cfferee malls counLeroffer Lhen accepLance
knows counLeroffer noL effecLlve unLll recelved Lhen changes mlnd and
malls accepLance
ls Lhere k? depends on whlch arrlves flrsL
kestatement second 40 creaLes Lhls excepLlon
kestatement 42

MINNEAPULIS & ST LUUIS RR v. CULUMBUS {mirror image rule]
acLs asks u for prlce quoLe concernlng sale of lron ralls rlce quoLe ls sollclLaLlon of
offer u glves offer Lo sell beLween 2000 and 3000 Lons says he wanLs Lo buy 1200
Lons (alleged accepLance) u re[ecLs s offer Lhen accepLs offer for 2000 Lons buL
offer no longer on Lable can'L accepL a dead offer (no longer vlable because had
already kllled lL wlLh lLs counLeroffer) CourL rules for u
noLes no k ls compleLe wlLhouL muLual assenL of Lhe parLles
4 As long as Lhe offer has noL been accepLed/re[ecLed Lhe negoLlaLlon remalns
open and lmposes no obllgaLlon on elLher parLy
4 roposal Lo accepL LhaL ls dlfferenL from Lhe Lerms of Lhe offer ls a re[ecLlon of
Lhe offer unless Lhe offeror assenLs Lo Lhe modlflcaLlon (m|rror |mage ru|e)
4 1hls Case
varled Lerms ln hls alleged accepLance
O CounLeroffer kllls Lhe offer
M|rror |mage ru|e accepLance and offer musL maLch
O Any change or add|t|on term|nates the offer and |nstead creates
O Lhls rule ls modern LradlLlonal common law
4 modern courLs now say you need a MA1L8lAL CPAnCL
CLher noLes
4 ffects of epests o 5qqestloos
kestatement Second 61 an accepLance whlch requesLs a change or
addlLlon Lo Lhe Lerms of Lhe offer ls noL lnvalldaLed unless Lhe accepLance
ls made Lo depend on an assenL Lo Lhe changed or added Lerms
4 ?ou can conLracL around a defaulL mlrror lmage rule
4 @be 8otte of los Mlo loqe ooJ D 2207
ln Mlnneapolls k falled because of dlsagreemenL over a maLerlal
negoLlaLed Lerm Lhe quanLlLy of sLeel Lo be sold
ln baLLle of Lhe forms Lhe parLles engaged ln commerce have falled Lo
lncorporaLe lnLo one formal slgned k Lhe Lerms of Lhelr conLracLual
O lL ls only when Lhe good falLh expecLaLlons of Lhe parLles are
frusLraLed LhaL Lhe legal obllgaLlons and rlghLs of Lhe parLles musL
be preclsely deLermlned
O SomeLlmes parLles have sald Loo much yeL have expressly agreed
upon Loo llLLle
4 Modern Lrend Lrlvlal unlmporLanL changes do noL maLLer
Also conLexLdependanL when you are Lrylng Lo deLermlne Lhe degree of
Lhe maLerlal change
4 uCC re[ecLs Lhe ldea LhaL any change or addlLlon ls noL an accepLance and
furLher re[ecLs Lhe ldea LhaL lL LermlnaLes Lhe offer and acLs as a re[ecLlon
4 2207 does Lwo Lhlngs
App|y to quest|ons of k format|on
What the terms actua||y are

acLs sollclLs prlce quoLaLlons for plywood u was one of manufacLurers LhaL quoLed
Lhe lowesL prlce and u enLer lnLo oral k for sale u denles accepLlng order sends
wrlLLen purchase order Lo u for Lhe plywood uoes noL make reference Lo any
warranLles or remedles only speclfled prlce quanLlLy and shlpplng lnsLrucLlons u sends
reply sLaLlng on reverse slde LhaL k would be expressly conLlngenL on s accepLance of
all Lhe Lerms ln Lhe documenL brlngs acLlon for alleged breach of express and lmplled
warranLles u denles llablllLy clalmlng lL dlsclalmed Lhe warranLles ln Lhe k
noLes says k u says no k
4 us clause maLerlally alLered" Lhe agreemenL
4 8oLh parLles agree s purchase order consLlLuLed offer dlsagree over
u says Lhls was counLeroffer LhaL accepLed by recelvlng and paylng for
Lhe goods
4 CourL says before counLeroffer accepLed counLerofferee musL expressly assenL
Lo Lhe new Lerms (here Lhe dlsclalmer of warranLy)
4 k formed? ?es one parLy shlpped goods and Lhe oLher parLy pald for lL
4 lssue for 2207 ls PCW lL was formed (ln whaL way)
2207 Lells us Lhere are 3 ways
O Cral agreemenL (followed by conflrmaLlon addlng Lerms)
O Lxchange of wrlLlngs wlLh dlfferenL/addlLlonal Lerms (unless
expressly condlLlonal on assenL)
O ConducL of parLles deLermlnes Lerms (only accepL Lhe Lerms Lhe
parLles agree on and Lhen flll ln Lhe oLher Lerms from defaulL
2207(2) deLermlnes Lerms
O Cffer llmlLs accepLance Lo Lerms of Lhe offer
O WheLher maLerlal
O Crlglnal offeror lf Lhey haven'L ob[ecLed and lf don'L ob[ecL Lhen
Lhe addlLlonal Lerms are lncorporaLed (le k enLered lnLo)
uoes dlsclalmlng warranLy quallfy as addlLlonal Lerm? nC
WhaL lf you deLermlne no k?
O Look Lo parL 3 conducL of Lhe parLles (conducL manlfesLs k)
ec|s|on 1ree
O ormed under 1 secLlon 2 deLermlnes Lerms
O ormed under 3 secLlon 3 deLermlnes Lerms
4 Look aL Lhlngs parLles acLually agree on
4 1hen flll ln gaps wlLh uCC defaulLs (where can'L agree on
lf no uCC gapflllers use 8LS1A1MLn1
4 under uCC lf merchanL sllenL abouL warranLy Lhe uCC
provldes for lmplled warranLles
4 Why does u argue Lhere ls no oral agreemenL? LeLLer of acknowledgemenL
would serve as counLeroffer and Lherefore Lhelr Lerms of Lhe k could apply

acLs u sends purchase order Lo says Lhls was offer submlLs order
acknowledgmenL Lo u alleges Lhls was Lhe offer Crder acknowledgmenL senL by
conLalns forum selecLlon clause u says lL dld noL agree Lo forum selecLlon clause
beglns performance by asslgnlng englneers Lo Lhe pro[ecL (manlfesLaLlon of accepLance)
CourL says u noL bound by forum selecLlon clause (lL maLerlally alLered Lhe parLles' k
and noL enforceable agalnsL u)
noLes flrsL flgure ouL lf k formed under secLlon 1 or 3 of 2207
4 ln order for forum selecLlon Lo fall under Lhls provlslon accepLance musL be
Lx8LSSL? condlLlonal on offeror's assenL Lo Lhose Lerms
8ecause order acknowledgmenL noL expressly condlLlonal on us assenL Lo
Lhe addlLlonal Lerms Lhe addlLlonal Lerms are Lo be consLrued as
proposa|s for add|t|on to the k
4 argues that "order acknow|edgment" was re[ect|on and counteroffer
WhaL lf nonmerchanL ls one of Lhe parLles?
4 lf nonmerchanL doesn'L accepL Lhere ls no way lL becomes parL of Lhe k
4 or 2207 Lo apply 8C1P A81lLS PAvL 1C 8L ML8CPAn1S

ote to k footloo
4 3 rouLes Lo k formaLlon ln and around 2207
lrsL before Lhe comma ln subsecLlon 1
O varles common law mlrror lmage rule
Second ln subsecLlon 3
O ConslsLenL wlLh prlor law
1hlrd opens afLer comma ln subsecLlon 1
O D 2204(1) a conLracL for sale of goods may be made ln any
manner sufflclenL Lo show agreemenL lncludlng conducL by boLh
parLles whlch recognlzes Lhe exlsLence of such a conLracL
4 referred vlew 2207(3) conLrols ln all cases where no conLracL ls formed under
subsecLlon 1 and Lhe seller shlps and Lhe buyer accepLs Lhe goods
ooflotloo of o Aqeeeot
4 Some say 2207 poorly drafLed
4 1he wrlLLen conflrmaLlon ls sald Lo operaLe as an accepLance even Lhough lL
sLaLes Lerms aL varlance wlLh Lhose agreed upon
lf boLh parLles reached a prlor agreemenL was Lhere noL prlor
Jbot oe tbe tes of tbe ootoct?
4 ln mosL cases under 2207 a k has been formed by one rouLe or anoLher and Lhe
dlspuLe ls over whaL Lerms are parL of Lhe k
lffeeot @es
4 Cenerally assumed LhaL boLh Lypes of varlanL Lerms should be dlsposed of ln
accordance wlLh Lhe rules of subsecLlon 2
4 Cmlsslon of dlfferenL" from subsecLlon 2 has lnfluenced some courLs Lo apply
Lhe knockout doctr|ne
knock Cut ku|e even lf a conLracL ls formed under subsecLlon 1 Lhe
Lerms of Lhe conLracL aare noL Lhose conLalned ln Lhe offer" plus
whaLever Lerms are added by reason of subsecLlon 2 buL Lhose upon
whlch Lhe forms" agree
O |ffer|ng terms cance| each other
loteootlooo ootocts ooJ 5oes
4 ClSC re[ecLed approach of 2207
4 ArLlcle 19(1)
a reply Lo an offer whlch purporLs Lo be an accepLance buL conLalns
addlLlons llmlLaLlons or oLher modlflcaLlons ls a re[ecLlon of Lhe offer and
consLlLuLes a counLeroffer"
4 ArLlcle 19(2) sLaLes LhaL a k may be creaLed lf a purporLed accepLance conLalns
addlLlonal or dlfferenL Lerms whlch do noL maLerlally alLer Lhe Lerms of Lhe offer"
4 ArLlcle 19(3) aLLempLs Lo sLaLe Lhe Lerms LhaL are consldered Lo alLer Lhe Lerms
of Lhe offer maLerlally
4 Also employs knockouL rule

TEXTILE UNLIMITED v. BMH {battle of tbe forms]
acLs conLends LhaL Lhe Lwo parLles agreed Lo seLLle k dlspuLes by blndlng arblLraLlon
ln CA boughL goods from u ln approxlmaLely 38 LransacLlons Lach Llme followed
slmllar paLLern sends purchase offer (offer) Lo broker ln CA u responds wlLh lnvolce
followed by shlpmenL of yarn and order acknowledgmenL lnvolce conLaln addlLlonal
Lerms and condlLlonal" provlslon 8oLh Lhe lnvolce and order acknowledgmenL
conLalned addlLlonal Lerms LhaL had noL been on s purchase order lncludlng
agreemenL Lo arblLraLe ln CA
noLes CourL says no k Lo arblLraLe was made and LhaL Lhe seller made a counLeroffer
4 2207(1) an accepLance wlll operaLe Lo creaLe a k even lf addlLlonal or dlfferenL
Lerms are sLaLed unless Lhe accepLance ls expressly condlLloned on assenL Lo Lhe
new Lerms
|f acceptance express|y cond|t|oned on the new terms then th|s |s the
4 Lo quallfy as accepLance Lhere musL be speclflc and unequlvocal assenL" Lo
supplemenLal Lerms
lf new provlsos noL accepLed nC k C8MLu
4 CourL says Lhere ls no such k formed ln Lhls case
lf Lhe parLles exchange lncompaLlble forms all of Lhe Lerms on whlch Lhe
parLles do noL agree drop ouL and Lhe uCC supplles Lhe mlsslng Lerms
4 We know we have a k here buL quesLlon ls wheLher has Lo follow Lhe speclflc
Look aL how k formed Lo deLermlne Lhls
O lL ls noL 2207(1) k because no accepLance only someLhlng LhaL
purporLs Lo be accepLance
4 Made lL expressly condlLlonal on oLhers' consenL (Lhls ls
why doesn'L fall under 2207(1))
O 1hus sLarL wlLh 2207(3) knockouL rule
4 ConducL does noL lmply accepLance of Lhe flnal form
4 ArblLraLlon clause noL maLerlal

CUMMENT: Arbitration Terms and tbe Battle of tbe Forms, p.
ln arblLraLlon parLles agree ln wrlLlng Lo submlL deflned dlspuLes elLher exlsLlng or
fuLure Lo lndependenL 3
persons (arblLraLors) for a flnal declslon on Lhe merlLs
Cnce Lhe award ls made [udlclal revlew ls llmlLed award cannoL be vacaLed because Lhe
arblLraLors made errors of facL or law
3 layers of arblLraLlon law
4 lnLernaLlonal arblLraLlon
4 lnLersLaLe arblLraLlon (AA)
4 lnLrasLaLe arblLraLlon law
All 3 layers requlre aL a mlnlmum LhaL Lhe arblLraLlon agreemenL be ln a wrlLlng
assenLed (buL noL necessarlly slgned) by boLh parLles
AA provldes llLLle guldance on when a wrlLLen provlslon" ls conLalned ln a k or agreed
Lo by Lhe parLles Lhus resorL Lo sLaLe law ls necessary

Revised -, p. 8
SecLlon Lhree provldes LhaL a deflnlLe and seasonable expresslon of accepLance ln a
record operaLes as an accepLance even lf lL conLalns Lerms addlLlonal Lo or dlfferenL
from Lhe offer"
now Lhere ls no dlsLlncLlon beLween sLandard Lerms and negoLlaLed Lerms ln Lhe sLaLuLe

klnd of llke uCC for lnLernaLlonal sales applles when boLh parLles are ln ClSCapproved
counLrles (counLry has Lo slgn on Lo Lhls)
4 Pard Lo conLracL ouL of ClSC
4 Applles Lo movable goods (same as uCC)
uoesn'L apply Lo many oLher consumer LransacLlons (le posLcard buylng
ln Canada)
ArLlcle 19(1) a reply Lo an offer whlch purporLs Lo be an accepLance buL conLalns
addlLlons llmlLaLlons or oLher modlflcaLlons ls a re[ecLlon counLeroffer
4 Slmllar Lo common law
ArLlcle 19(2) a reply purporLlng Lo be an accepLance wlLh lmmaLerlal or dlfferenL Lerms
ls an accepLance unless Lhe offeror wlLhouL undue delay ob[ecLs
4 Modern common law
ArLlcle 19(3) a Lerm ls maLerlal lf lL relaLes lnLer alla Lo Lhe prlce paymenL quallLy and
quanLlLy of Lhe goods place and Llme of dellvery exLenL of one parLy's llablllLy Lo Lhe
oLher or Lhe seLLlemenL of dlspuLes"
ClSC uCLSn'1 uSL MAlL8Cx 8uLL

acLs dlspuLe over k provlslons wheLher or noL Lhere wlll be arblLraLlon ln 8ussla uoes
k requlre Lhe Moscow arblLraLlon?
noLes and u dlsagree over wheLher offer accepLed
4 8uyer argues Lhey accepLed by sllence
ArLlcle 18(1) ClSC sllence or lnacLlvlLy does noL amounL Lo accepLance
Same resulL under uCC?
4 robably uCC would have knocked ouL arblLraLlon proceedlngs
AL common law you end up reachlng resulL LhaL seller would llke accepLance doesn'L
operaLe as accepLance because of maLerlal change accepLance aL Llme of shlpmenL of
Lhe goods
ClSC follows blend of modern and LradlLlonal common law rules

HILL v. CATEWAY {acceptance by non-return]
orders compuLer from u keeps order for more Lhan 30 days before complalnlng
abouL lLs componenLs and performance u asks dlsLrlcL courL Lo enforce arblLraLlon
clause courL says no CourL rules for u ln Lhe end
lssue Pow and when k formed ln Lhls case
4 1here are many commerclal LransacLlons where people pay for producLs wlLh
Lerms Lo follow
k formed when consumer pays for Lhe sofLware
racLlcal conslderaLlons supporL allowlng vendors Lo enclose Lhe full legal
Lerms wlLh Lhelr producLs
4 argues LhaL uCC 2207(2) applles
CourL says no where Lhere ls only one form Lhls provlslon ls lrrelevanL
4 knew LhaL Lhey could seek ouL Lhe Lerms of Lhe k (us ads sLaLe Lhelr producLs
come wlLh llmlLed warranLles and llfeLlme supporL)
noLes whaL was Lhe offer?
4 Accordlng Lo Lhe courL offer made by u (CaLeway)
We wlll send you Lhls compuLer you have 30 days Lo accepL
4 Pow was flnal offer accepLed?
Wasn'L accepLed unLll 30 days afLer recelpL WhaL offer? Cffer LhaL
lncluded arblLraLlon clause
Consumer accepLs Lerms LhaL merchanL has glven Lhem
4 !udge makes efflclency argumenL resulL based upon pracLlcallLy more Lhan
anyLhlng else
4 2207 argumenL
uoesn'L apply when Lhere ls only one form
Powever nowhere ls lL menLloned ln Lhe acLual sLaLuLe LhaL you need
Lwo forms [udge lnfers Lhls
Also clalms vendor ls masLer of Lhe offer don'L know where he goL Lhls
4 8uyers have Lhree ways Lo dlscover seller's Lerms
Ask for advanced copy of warranLy Lerms
ConsulL publlc resources
lnspecL documenLs afLer dellvery

KLUCEK v. CATEWAY {acceptance by non-return]
acLs pald for and recelved a compuLer from CaLeway uemonsLraLes k for sale of a
lssue wheLher Lhe k lncludes Lhe SLandard 1erms as parL of Lhe agreemenL
noLes Lhls courL wlll apply 2207 says LhaL Lhls provlslon says noLhlng whlch requlres
anoLher form before Lhe provlslon becomes effecLlve
4 ln Lyplcal consumer LransacLlons purchaser |s offeror and vendor |s offeree
offered Lo purchase compuLer u accepLed s offer
4 SLandard 1erms consLlLuLe counLeroffer only lf CaLeway expressly made lLs
accepLance condlLlonal on s assenL Lo Lhe addlLlonal or dlfferenL Lerms
CaLeway dld noL Lell LhaL LransacLlon was condlLlonal on s accepLance
of Lhe SLandard 1erms
4 lS nC1 A ML8CPAn1
AddlLlonal/dlfferenL Lerms conLalned ln SLandard 1erms dld noL become
parL of parLles' agreemenL unless expressly agreed Lo Lhem
2207(2) only applles when Lhere are merchanLs (oLher provlslons do noL
make dlsLlncLlon beLween merchanL and consumer)
CLher noLes
4 eqotloq oloq ootocts
lnvolve exchange relaLlonshlps LhaL evolve over Llme wlLh one parLy
provldlng Lerms ln baLches
CuesLlon of when k formed beLween Lhe parLles
O lf k formed early ln Lhe deal (when $ exchanged for Lhe goods)
Lhen Lerms subsequenLly proposed by Lhe seller are offers Lo
modlfy Lhe k an offer whlch Lhe buyer can accepL/re[ecL
O lf k formed laLer Lhen no k formed unLll seller has proposed Lhe
lasL baLch or Lerms whlch buyer can accepL or re[ecL
4 2204 Plll's rule

Assent in Electronic Commerce
lf a dlspuLe arlses ln elecLronlc commerce 3 quesLlons llkely Lo be ralsed
4 WhaL abouL Lhe valldlLy of elecLronlc conLracLs whlch may be concluded
beLween compuLers and wlLhouL Lhe presence of a human belng and lnvolve
elecLronlc slgnaLures and records
8ely on LSlCn provlslons
4 lf valld when ls a k formed ln elecLronlc commerce and
4 lf a k ls formed whaL are lLs Lerms?
Answer Lo second and Lhlrd quesLlons whaL subsLanLlve law applles Lo Lhe elecLronlc
LransacLlon and wheLher LhaL law ls lnfluenced by Lhe manner ln whlch Lhe deal ls

SPECHT v. NETSCAPE {no "clickwrap"]
acLs s downloaded us program and laLer clalmed Lhe program vlolaLed prlvacy laws
u wanLs arblLraLlon per llcense Lerms WhaL law applles?
noLes as foundaLlonal maLLer noL clear LhaL Lhls ls a k
4 CourL seems Lo LreaL lL as such
4 uon'L know lf uCC or common law (many courLs apply common law wlLh
prlnclples of uCC)
4 Are s bound by Lhe llcense Lerms?
uld Lhey assenL? noL sure because of Lhe way webslLe seL up
4 8esulL 1here ls no assenL make lL so Lhey can'L download before readlng Lerms
merely assenLlng Lo Lhls ls enough Lo puL you on noLlce LhaL lL ls Lhere
Consumer cllcklng on download buLLon does noL communlcaLe assenL Lo
k Lerms lf Lhe offer dld noL make clear Lo Lhe consumer LhaL cllcklng on
Lhe download buLLon would slgnlfy assenL Lo Lhose Lerms
4 CourL holds s downloadlng of Lhls program dld noL consLlLuLe accepLance of us
llcense Lerms
CLher noLes
4 CuesLlon of whaL ls appllcable law plagues lnLerneL LransacLlons
4 Sale of goods uCC buL whaL are goods"
4 ls downloadable sofLware a Langlble" good?

Cffer musL be communlcaLed Lo be effecLlve
Cnce communlcaLed offer creaLes ln Lhe offeree a power of accepLance Lhe duraLlon of
whlch may be llmlLed by elLher Lhe Lerms of Lhe offer or some concepL of reasonable
1here ls a race beLween Lhe proper exerclse of Lhe power of accepLance by Lhe offeree
and perhaps lapse of Llme a change of mlnd by Lhe offeror or some oLher LermlnaLlng
4 1hls race can be demonsLraLed by Lhe mallbox rule (where k may be creaLed lf
leLLer of accepLance ls posLed before Lhe offeror's revocaLlon ls acLually recelved
by Lhe offeree)
1ermlnaLlon of offer
4 8e[ecLlon/counLeroffer/revocaLlon (lncludes Llmlng and communlcaLlon)
1ermlnaLlon by acLlons of Lhe parLles
4 1ermlnaLlon by operaLlon of law
Lapse of Llme
uesLrucLlon of sub[ecL maLLer

Words or acLs whlch expressly or by lmpllcaLlon sLaLe LhaL Lhe offeror no longer
lnLends Lo enLer lnLo Lhe proposed agreemenL
4 1lmlng when does revocaLlon become effecLlve?
4 CommunlcaLlon how ls Lhls lnformaLlon communlcaLed Lo offeree?
Pendrlcks v 8ehee dld 8ehee revoke hls offer before lL was accepLed?
4 usually flrsL deLermlne lf Lhere was an offer
kDLL unless Lhe offer ls supporLed by conslderaLlon an offeror may wlLhdraw hls offer
aL any Llme before accepLance and communlcaLlon of LhaL facL Lo hlm 1o be effecLlve
revocaLlon of an offer musL be communlcaLed Lo Lhe offeree before he has accepLed

DICKINSUN v. DUDDS {learning of a land sale]
acLs u dellvered slgned offer Lo offerlng Lo sell hlm a plece of properLy offer would
be lefL open unLll rlday 9AM decldes Lo accepL 1hursday buL doesn'L noLlfy u Lhen
lnformed LhaL u had offered and agreed Lo sell Lhe properLy Lo someone else Lrles Lo
leave formal accepLance wlLh u mulLlple Llmes buL lL ls Loo laLe CourL says falled Lo
prove Lhere was any klnd of blndlng k beLween Lhe Lwo parLles
noLes CourL says documenL was noLhlng buL an offer and unLll boLh parLles are bound
nelLher ls bound
4 ?ou don'L have Lo have an express wlLhdrawal of Lhe offer (kL1kA1ICN)
4 1here ls lndlcaLlon LhaL already knew u sold Lhe properLy and sLlll Lrled Lo
accepL Lhe offer
4 lf you recelve noLlce LhaL someone who had offered you someLhlng already sold
lL Lo someone else ln Lhe meanLlme can you sLlll make a blndlng k by accepLance
of Lhe offer? nC
4 1hls ls [usL a promlse wlLhouL conslderaLlon
8y speclfylng Llme Lhls does noL desLroy offeror's ablllLy Lo revoke Lhe
4 WhaL lf buyer hears seller ln negoLlaLlons wlLh anoLher parLy? SLlll have Lhe
power of accepLance as long as Lhe properLy noL SCLu
CLher noLes
4 kestatement Second 36 (1) an offeree's power of accepLance may be
LermlnaLed by
(a) re[ecLlon or counLeroffer by offeree or
(b) lapse of Llme or
(c) revocaLlon by Lhe offeror or
(d) deaLh or lncapaclLy of Lhe offeror or offeree
4 (2) ln addlLlon an offeree's power of accepLance ls LermlnaLed by Lhe non
occurrence of any condlLlon of accepLance under Lhe Lerms of Lhe offer
4 kestatement Second 43 An offeree's power of accepLance ls LermlnaLed when
Lhe offeror Lakes deflnlLe acLlon lnconslsLenL wlLh an lnLenLlon Lo enLer lnLo Lhe
proposed k and Lhe offeree acqulres rellable lnformaLlon Lo LhaL effecL
4 ewoJs
AuLhorlLles favor a pracLlcal rule whlch ln general obllges Lhe offeror Lo
glve Lhe noLlce of revocaLlon publlclLy equal Lo LhaL glven Lhe offer
4 lopse of ffe
An offer lapses of lLs own Lerms afLer Lhe explraLlon of Lhe Llme
sLlpulaLed ln Lhe offer or upon Lhe occurrence of a sLlpulaLed evenL or lf
Lhere ls no such sLlpulaLlon afLer a reasonable perlod of Llme (8S241)
O WhaL ls reasonable depends upon Lhe clrcumsLances
An offer made by one Lo anoLher ln face Lo face conversaLlon ls ordlnarlly
deemed Lo conLlnue only Lo Lhe close of Lhelr conversaLlon and cannoL
be accepLed LhereafLer

Somet|mes offers cannot be term|nated
3 forms
4 CpLlon ks
4 lrm Cffer 8ule (uCC 2203)
4 Cfferee's conducL
CpLlon k
4 Cfferor promlses Lo keep offer open
4 Cfferee pays Lhe offeror Lo keep Lhe offer open
rovldes conslderaLlon
4 2 key Lerms
1lme llmlL
O lf no Llme llmlL courL lmposes reasonable Llme llmlL on Lhe opLlon
under resLaLemenL all you need ls wrlLlng purporLlng Lo have conslderaLlon (even
Lhough ln reallLy you may noL)
kestatement Second 81 (1) Lhe facL LhaL whaL ls bargalned for does noL of lLself
lnduce Lhe maklng of a promlse does noL prevenL lL from belng conslderaLlon for Lhe
promlse (2) Lhe facL LhaL a promlse does noL of lLself lnduce a performance or reLurn
promlse does noL prevenL Lhe performance or reLurn promlse from belng conslderaLlon
for Lhe promlse
4 Can have nomlnal conslderaLlon as conslderaLlon
A flrm offer under 2203 "f|rm offer ru|e" an offer by a merchant to buy or se|| goods
|n a s|gned wr|t|ng wh|ch by |ts terms g|ves assurance that |t w||| be he|d open |s not
revocab|e for |ack of cons|derat|on dur|ng the t|me stated or |f not t|me |s stated for a
reasonab|e t|me but |n no event may such per|od of |rrevocab|||ty exceed three
months but any such term of assurance on a form supp||ed by the offeree must be
separate|y s|gned by the offeror
Cffer ls noL revocable for lack of conslderaLlon when
4 A merchanL makes wrlLLen slgned offer and sLaLes offer wlll be held open
4 Cfferee's conducL offeree's rellance on offer can serve Lo make lL enforceable

HUMBLE UIL v. WESTSIDE INVESTMENT {modified land option]
acLs seller gave u buyer excluslve and lrrevocable opLlon Lo purchase land WrlLLen k
wlLh $30 conslderaLlon wrlLes leLLer addlng addlLlonal lnducemenL (u lnsLalls uLlllLy
llnes) Lhen wrlLes anoLher leLLer saylng Lo dlsregard Lhe earller lnducemenL seeklng
speclflc performance u says Lhe offer LermlnaLed wlLh Lhe addlLlonal condlLlon CourL
upholds opLlon k enLlLled Lo speclflc performance
noLes Lhe mere facL LhaL parLles may choose Lo negoLlaLe before accepLance of an
opLlon k does noL mean LhaL Lhe opLlon k ls repudlaLed
4 Powever quallfled or condlLlonal accepLance lS a re[ecLlon of Lhe offer
Such an accepLance" ls a counLeroffer for new k
4 under an opLlon Lhe acL necessary Lo ralse a blndlng promlse Lo sell ls noL
accepLance of Lhe offer buL raLher Lhe performance of Lhe condlLlon of Lhe
opLlon k
4 1he opLlon k bound Lo do noLhlng buL granLed lL Lhe rlghL Lo accepL or re[ecL
Lhe opLlon ln accordance wlLh lLs Lerms wlLhln Lhe Llme and ln Lhe manner
speclfled by Lhe opLlon
4 "b|nd|ng opt|on" orlglnal offer lf lrrevocable offer counLeroffer rule does noL
CLher noLes
4 Lxpress re[ecLlon only closes opLlon k lf seller sLarLs dolng someLhlng else (le
relles on Lhe re[ecLlon Lo bulld a house on Lhe land)
4 ffect of ejectloo by optlooee
An opLlon holder may compleLe a k by communlcaLlng hls accepLance
desplLe Lhe facL LhaL he has prevlously re[ecLed Lhe offer (unless seller
relles on Lhe re[ecLlon Lo do someLhlng else)
CpLlon k ls noL LermlnaLed by re[ecLlon or counLeroffer by revocaLlon
or by deaLh or lncapaclLy of Lhe offeror unless Lhe requlremenLs are meL
for Lhe dlscharge of a conLracLual duLy
4 ptloo voletles
kestatement Second 2S "Cpt|on k" an opLlon conLracL ls a promlse
whlch meeLs Lhe requlremenLs for Lhe formaLlon of a k and llmlLs Lhe
promlsor's power Lo revoke Lhe offer
O May Lake Lhe form of a collaLeral k
O Can have nomlnal conslderaLlon
4 CondlLlonal k" lL does noL Lake Lhe form of an offer
accompanled by an enforceable promlse noL Lo revoke
buL prevalllng law sLlll LreaLs lL llke normal opLlon k
4 eclto of ooslJeotloo os lpleJ lolse to loy
Ma[orlLy rule offeror may prove LhaL Lhe conslderaLlon had noL been
pald and LhaL no oLher conslderaLlon had Laken lLs place
MlnorlLy rule (beLLer) even lf lL ls shown LhaL Lhe dollar was noL pald lL
does noL vold Lhe k
kestatement Second 82(1)(a) an offer ls blndlng as an opLlon k lf lL (a)
ls ln wrlLlng and slgned by Lhe offeror reclLes a purporLed conslderaLlon
for Lhe maklng of Lhe offer and proposes an exchange on falr Lerms
wlLhln a reasonable Llme
4 levocobllty by 5totte
D 220S can'L revoke for lack of conslderaLlon
O Cffer not revocab|e for |ack of cons|derat|on when
4 (1) MerchanL (2) makes a wrlLLen slgned offer and (3)
sLaLes LhaL Lhe offer wlll be held open
ISG Art|c|e 16(1)
4 Molbox e ooJ Acceptooce oJe ptloo k
A dlspaLched buL uncommunlcaLed accepLance may preclude revocaLlon
of Lhe offer for Lhe accepLance ls effecLlve upon dlspaLch
Should Lhe rule apply Lo opLlon k?
O kestatement Second 63(b) an accepLance under an opLlon k ls
noL operaLlve unLll recelved by Lhe offeror
O slnce Lhe opLlon k provldes for lrrevocablllLy of Lhe offer prlmary
reason for mallbox rule ls absenL
4 ptloos lo loteootlooo 5oes
Art|c|e 1S(1) an offer wheLher revocable or noL ls noL effecLlve unLll lL
reaches" Lhe offeror
Art|c|e 16(1) dlspaLchlng Lhe accepLance prevenLs revocaLlon even
Lhough an opLlon ls noL creaLed under arLlcle 16

DRENNAN v. STAR PAVINC {mistaken bid]
acLs ls conLracLor sollclLlng blds for a consLrucLlon pro[ecL u places lowesL bld
relles on offer Lo make masLer bld u Lhen lnforms Lhere was mlsLake ln calculaLlon
and aLLempLs Lo revoke offer uld s rellance on Lhe offer make lL lrrevocable? CourL
says bound hlmself on rellance Lo us Lerms because had no reason Lo know u had
made compuLaLlon mlsLake and Lhls mlsled
noLes Lhls was nelLher an opLlon supporLed by conslderaLlon nor a bllaLeral k blndlng
boLh parLles
4 kestatement Second 90 a promlse whlch Lhe promlsor should reasonably
expecL Lo lnduce acLlon or forbearance of a deflnlLe and subsLanLlal characLer on
Lhe parL of Lhe promlsee and whlch does lnduce such acLlon or forbearance ls
blndlng lf ln[usLlce can be avolded only by enforcemenL of Lhe promlse
4 urpose of th|s sect|on |s to make a prom|se b|nd|ng even though there was no
4 8ellance serves Lo make Lhe offer lrrevocable
4 kestatement Second 4S (1) where an offer lnvlLes an offeree Lo accepL by
renderlng a performance and does noL lnvlLe a promlssory accepLance an opLlon
k ls creaLed when Lhe offeree Lenders or beglns Lhe lnvlLed performance or
Lenders a beglnnlng of lL
4 Standard expectat|ons remedy
AccepLance noL requlremenL for promlssory esLoppel
4 ln a slLuaLlon where you make unllaLeral offer performance beglns Lhen you are
8eglnnlng performance ls accepLance when you have a bllaLeral k
4 Pere Lhere ls nelLher an opLlon supporLed by conslderaLlon nor a bllaLeral k
blndlng on boLh parLles
!udge Lhen proceeds Lo creaLe an opLlon under L docLrlne
CLher noLes
4 kestatement Second 87(2) an offer whlch Lhe offeror should reasonably
expecL Lo lnduce acLlon or forbearance of a subsLanLlal characLer by Lhe offeree
before accepLance and whlch does lnduce such acLlon or forbearance ls blndlng
as an opLlon k Lo Lhe exLenL necessary Lo avold ln[usLlce
4 lotectloo fo 5bcootocto?
CA vlew when geL awarded Lhe bld Lhen become bound

lf afLer Lhe negoLlaLlons have produced some agreemenL on Lhe proposed exchange
one parLy wlLhdraws because cerLaln maLerlal Lerms were noL agreed or were agreed ln
an lndeflnlLe way or were expllclLly lefL for fuLure agreemenL when lf ever wlll LhaL
wlLhdrawal expllclLly resulL ln llablllLy for damages cause?
4 Should k law provlde LhaL Lhere can be no k unLll clear and compleLe agreemenL
Lo all maLerlal Lerms ls reached?
noLe no k can be formed unLll clear and compleLe agreemenL ls reached on maLerlal
Lerms Lo a more flexlble sLandard
4 D2204 (2) an agreemenL ls sufflclenL Lo consLlLuLe a conLracL for sale may
be found even lf Lhe momenL of lLs maklng ls undeLermlned (3) even lf one or
more Lerms are lefL open a k for sale does noL fall for lndeflnlLeness lf Lhe
parLles have lnLended Lo make a k and Lhere ls a reasonably cerLaln basls for
glvlng an approprlaLe remedy
2correspondence does noL dlsclose Lhe exacL polnL aL whlch Lhe
agreemenL was formed buL Lhe conducL of Lhe parLles lndlcaLe LhaL a
blndlng obllgaLlon has been underLaken
3 lf Lhe parLles lnLend Lo enLer lnLo a blndlng agreemenL Lhls subsecLlon
recognlzes Lhe agreemenL as valld ln law desplLe mlsslng Lerms lf Lhere
ls any reasonably cerLaln basls for granLlng a remedy based on
commerclal sLandards of lndeflnlLeness
O 1he more terms the part|es |eave open the |ess ||ke|y |t |s that
the part|es have |ntended to conc|ude a b|nd|ng agreement
4 kestatement Second 33(2) Lerms of a k are reasonably cerLaln lf Lhey provlde a
basls for deLermlnlng Lhe exlsLence of a breach and for glvlng an approprlaLe
34(3) acLlon ln rellance on an agreemenL may make a conLracLual
remedy approprlaLe even Lhough uncerLalnLy ls noL removed
l@lv lMDlA@lN AN \l55lN l Al@AN @ ll55 l8lM
4 Cne parLy's asserLlon LhaL cerLaln defecLs" ln Lhe process of elLher formulaLlng
or expresslng an agreemenL [usLlfy wlLhdrawal or avoldance wlLhouL llablllLy
even Lhough Lhe agreemenL mlghL oLherwlse saLlsfy Lhe requlslLes for a k
4 MosL common slLuaLlon ls because words are amblguous
2 meanlngs
O A word lLself has Lwo meanlngs
O WheLher word falls lnLo LhaL deflnlLlon
4 roblem Lypes
lndeflnlLe parLles purporL Lo agree on a maLerlal Lerm buL haven'L
O 8affles
lncompleLe parLles are sllenL as Lo a maLerlal Lerm
O lf parLles are sllenL as Lo quanLlLy don'L have enforceable k
O lf parLles sllenL as Lo some oLher maLerlal Lerm Lhen courL can puL
ln gap flllers
O knock ouL rule Lwo wrlLlngs don'L agree on a Lerm boLh
knocked ouL and courL puLs ln defaulL rules
O ConLracL ls SlLLn1 haven'L declded how Lhey wlll reach
agreemenL on Lerms
4 MCM (gap flller)
ueferred parLles have agreed Lo agree buL don'L
O Slmllar Lo lncompleLe ln LhaL lf we slgn k and lnLend lL Lo be k
and asslgn some sorL of maLerlal Lerm lL can almosL be lmplled
LhaL Lhere wlll be some fuLure prlce/agreemenL
4 MarLln Cglebay
4 Pave Lo be reasonably cerLaln of Lhe maLerlal Lerms kestatement Second 33
D takes more ||bera| approach w|th 2204(3)

RAFFLES v. WICHELHAUS {peerless sbips]
acLs wrong shlp All we know from oplnlon ls LhaL us won
noLes parLles appear Lo have LhoughL Lhere was a k buL we are noL sure lf Lhere
acLually ls one
4 k lLself ls lnsufflclenLly deflnlLe (no consensus aL lLem" Lhey dldn'L agree Lo
Lhe same Lhlng)
8uyer Lhlnks one peerless shlp seller Lhlnks anoLher
4 8uLL when Lhere ls no sub[ecLlve agreemenL and Lhere ls no ob[ecLlve meanlng
we don'L have manlfesLaLlon of muLual assenL (meeLlng of Lhe mlnds)
4 ordered one Lhlng u expressed hls assenL Lo anoLher
CLher noLes
4 kestatement Second 20 Lhere ls no manlfesLaLlon of muLual assenL Lo an
exchange lf Lhe parLles aLLach maLerlally dlfferenL meanlngs Lo Lhelr
manlfesLaLlons and (a) nelLher parLy knows or has reason Lo know Lhe meanlng
aLLached by Lhe oLher or (b) each parLy knows or each parLy has reason Lo know
Lhe meanlng aLLached by Lhe oLher
4 (2) Lhe manlfesLaLlons of Lhe parLles are operaLlve ln accordance wlLh Lhe
meanlng aLLached Lo Lhem by one of Lhe parLles lf (a) LhaL parLy does noL know
of any dlfferenL meanlng aLLached by Lhe oLher and Lhe oLher knows Lhe
meanlng aLLached by Lhe flrsL parLy C8 (b) LhaL parLy has no reason Lo know of
any dlfferenL meanlng aLLached by Lhe oLher and Lhe oLher has reason Lo know
Lhe meanlng aLLached by Lhe flrsL parLy
4 If two part|es sub[ect|ve|y agree but man|festat|ons are d|fferent theoret|ca||y
we st||| have k

MCM v. SCHEIDER {TV series]
acLs and u negoLlaLed oral employmenL k for u Lo acL ln a 1v plloL and serles S of
klnd of k LhaL could noL be performed wlLhln a year (noL good defense because lL could
have been compleLed wlLhln a year) lnal agreemenL doesn'L lnclude sLarL daLe and
Llme of performance ls lmporLanL 1rlal courL says Lhere was k lL doesn'L maLLer lf Lhere
ls no daLe we wlll lmpose a gap flller
4 8uLL parLles have compleLed Lhelr negoLlaLlons of whaL Lhey regard as essenLlal
elemenLs and performance has begun ln good falLh LhaL agreemenL on unseLLled
maLLers wlll follow Lhe courL wlll flnd and enforce a k lf some ob[ecLlve meLhod
of deLermlnaLlon ls avallable
4 k wlll be enforced because parLles had negoLlaLed Lhe essenLlal elemenLs"

MARTIN v. SCHUMACHER {lease renewal]
acLs LenanL slgned a lease for a reLall sLore for 3 year Lerm aL graduaLed renL
wanLs Lo renew u quoLes huge prlce wanLs speclflc performance on lower prlce
4 8uLL a renewal clause ln a lease provldlng for fuLure agreemenL on Lhe renL Lo
be pald durlng Lhe renewal Lerm ls enforceable lf lL ls esLabllshed LhaL Lhe
parLles' lnLenL was noL Lo LermlnaLe ln Lhe evenL of a fallure Lo agree
CourL says Lhls ls noL clear ln Lhe presenL case
4 1hls would have been saLlsfled had Lhere been some sorL of meLhodology ln Lhe
lease of calculaLlng paymenLs or lf Lhere was some condlLlon/sLandard amounL
was made Lo depend on
Pere renewal clause does noL sLaLe any of Lhls
4 usually glve speclflc performance for land
4 Modern Lrend agreemenL Lo agree only enforceable lf behavlng ln good falLh
CLher noLes
4 rlce and Lerms of paymenL are essenLlal elemenLs ln a k for Lhe sale of real
properLy where an elemenL of Lhe conLemplaLed k such as prlce ls unseLLled
and lefL Lo fuLure negoLlaLlons Lhe agreemenL ls unenforceable under Lhe
sLaLuLe of frauds

UCLEBAY v. ARMCU {iron ore transport]
acLs u and ln long Lerm k Lo LransporL lron ore rlce usually recognlzed by leadlng
lron ore shlppers or by muLual agreemenL AfLer 30 years fallure Lo agree 1hls ls a
relaLlonal k (k over long perlod of Llme LhaL parLles are lnLendlng Lo deal) u wanLs Lo
geL ouL of shlpplng k Lhlnks k Lo shlp wlll conLlnued (Lhey accommodaLe u and lnvesL
mllllons ln Lhelr 88) Lhey are ln a conLlnuous buslness relaLlonshlp CourL seLs prlce aL
Lhls Llme buL wlll appolnL medlaLor ln Lhe fuLure lf confllcL arlses
noLes obllgaLlon Lo negoLlaLe ln good falLh by boLh parLles
4 Common law governs because Lhls ls servlce noL sale of goods
4 CourL flnds 4 Lhlngs
and u lnLend Lo be bound by k
rlce shall be reasonable under clrcumsLances aL Lhe Llme Lhe servlce ls
arLles musL conLlnue Lo comply wlLh Lhe prlclng provlslons ln Lhe orlglnal
k (look Lo lndusLry sLandards)
lf unable Lo agree appolnL medlaLor
CLher noLes
4 ln Lhls case courL relucLanL Lo LermlnaLe Lhe k unless boLh parLles clearly wanLed
Lo and mlghL Lry Lo preserve Lhe relaLlonshlp
1hls ls based on Lhe surroundlng clrcumsLances of Lhelr relaLlonshlp
4 loJeflolteoess ooJ peo @es oJe tbe D
CourL applles uCC provlslons by analogy
O Speclflcally 2204(3)
4 arLles musL have lnLended Lo make a k
4 1here musL be a reasonably cerLaln basls for glvlng an
approprlaLe remedy
LnforcemenL hlnges on wheLher Lhe parLles compleLed Lhelr prellmlnary
negoLlaLlons or lnLended LhaL agreemenL on Lhe open Lerms was Lo be a
condlLlon of conLracLual obllgaLlon
4 @be effect of oo oqeeeot to oqee oJe D ooJ estoteeot 5ecooJ
Lven wlLh an lnLenL Lo conLracL lack of agreemenL on Lhe quanLlLy Lerm
should supporL a concluslon LhaL Lhe k falled for lndeflnlLeness"
O no reasonably cerLaln basls for glvlng an approprlaLe remedy
CourL may flll ln a reasonable prlce" buL Lhls ls hard Lo do

LxcepL as oLherwlse provlded Lhe effecL of provlslons of Lhe uCC may be varled by
2204(3) suggesLs LhaL Lhe code has an lncllnaLlon Loward fllllng gaps raLher Lhan
sLrlklng down open ended ks for lndeflnlLeness
Powever noL all provlslons are conLracLable
4 Cood falLh
arLles by agreemenL may deLermlne Lhe sLandards by whlch good falLh
ls Lo be measured lf Lhose sLandards are noL manlfesLly unreasonable
allure Lo agree on each and every Lerm wlll noL resulL ln an unenforceable agreemenL
4 1he uCC fleshes ouL Lhe skeleLal k by provldlng Lerms whlch Lhe drafLers LhoughL
would mosL probably be ln Lhe mlnds of Lhe parLles

CUMMENT: How sbould tbe law set DEFAULT RULES? P.
hypoLheLlcal conLracLlng" approach Lo defaulL seLLlng
4 Clve Lhe parLles whaL Lhey would have conLracLed for lf Lhey had expressly
4 Powever hard for courLs Lo lnfer whaL parLlcular conLracLlng parLles would have
conLracLed for
CourL can lnfer whaL ma[orlLy of conLracLors ln a parLlcular seLLlng would
have done
O ma[orlLarlan" approach
4 conLra proferenLum" rule resolve conLracLual amblgulLy by lnLerpreLlng Lhe k
agalnsL Lhe drafLlng parLy
4 penalLy defaulL rule" rule LhaL Lhe conLracLors would noL have wanLed
Clves conLracLors Lhe lncenLlve Lo k around Lhe defaulL rule and choose
whlch k provlslon Lhey prefer
4 mlnorlLarlan" defaulL defaulL LhaL only mlnorlLy of conLracLlng parLles would

CUMMENT: Texaco, Pennzoil and Uutposts of K Law, p.
1exaco v ennzoll underscored Lhe vlablllLy of Lhe LorL clalm of lnLerference wlLh
conLracLual relaLlons and lllusLraLed a poLenL lnLersecLlon beLween k and LorL law

ln dlspuLes over lndeflnlLeness llablllLy and remedy lssues are lnLerLwlned
k wlll fall for lndeflnlLeness of Lhe courL ls unable Lo deLermlne wheLher Lhere has been
a breach or flnd a reasonably cerLaln basls for glvlng an approprlaLe remedy" 2204(3)
1wo polnLs
4 lf lncompleLe/lndeflnlLe agreemenL ls enforceable by whaLever LesL Lhe may
seek Lo proLecL Lhe expecLaLlon lnLeresL Lhrough speclflc performance or
4 lf Lhese remedles are noL avallable because of lndeflnlLeness ln Lhe agreemenL
alLernaLlve remedles proLecL Lhe rellance and lf all else falls Lhe resLlLuLlon

HUFFMAN v. RED UWL STURES {promised store]
acLs u repeaLedly Lells Poffman he can have franchlse relles on Lhls dollar flgure
keeps golng up ln Lhe end no franchlse 1rlal [ury awards rellance damages
noLes agreemenL was never reached on essenLlal facLors necessary Lo esLabllsh k
beLween and u
4 Can you use promlssory esLoppel?
L lnvoked as a subsLlLuLe for conslderaLlon renderlng a graLulLous
promlse enforceable as a k
4 kestatement f|rst 90
romlse doesn'L have Lo meeL requlremenLs of an offer
4 CourL says ln[usLlce would resulL lf s were noL granLed some rellef because of
fallure of us Lo keep Lhelr promlses whlch lnduced s Lo acL Lo Lhelr deLrlmenL
O no recovery for fuLure proflLs
O CompensaLlon for change ln prlce of grocery sLore LhaL had Lo
buy and Lhen sell
4 ulfference beLween falr markeL value and whaL he acLually
goL (age says Lhls ls sLrange)
CompensaLlon for s lncompeLence"
4 1yplcally when negoLlaLlons fall boLh parLles walk away wlLh Lhelr own losses