Contracts -Review -offer

1st Issue Ask: Did the parties form an agreement? Offer Acceptance There can be no true contract unless the actions and words of the traders manifest a mutual and objective assent to be bound by the terms of the agreement.

2nd & 3rd Issue Ask: Is their agreement a K? K is a legal status. Whether it’s come into existence, depends on: Presence of valuable consideration bargained for legal detriment on both sides of the exchange. Absence of defenses which would preclude K formation.

4th Issue Ask: Do the terms of that K or the subsequent actions of either of the parties who fought, confer any duties or any rights upon non-traders? =>

5th Issue Ask: Have the performance obligations created by the K matured? Have the K obligations matured? Use law of conditions . Express Conditions implied-in-fact Conditions implied-at-law Has performance been excused ? - objectively impossible - commercially impracticable - Frustration of purpose.

6th Issue If performance has not been excused, and in the fact pattern, it has not been tendered, you are in the presence of breach and you must discuss the law of remedies. Breach by anticipatory repudiation. Breach by voluntary disablement. Restitution Reimbursement If no adequate remedy at law, the aggrieved party may sue for: Declaratory judgment Specific performance decree Injunction

Offer and Acceptance Has a contract been formed? At the time of acceptance, was the offer still outstanding? Was there a defective acceptance? Positive bias in terms of finding contract reformation Objective theory of contract formation Look for a stipulation that an offer is outstanding in the multistate. If it’s not stipulated, you must find an objective manifestation on the part of one of the traders of the present intention to form a contract.

3 Elements to an Offer Intent Consent Communication Form a present contract State of mind fact patterns Preliminary negotiation Offer or negotiation? Consent Communication

State of mind fact patterns One of the parties spoke in jest, in anger, in hysteria. Could the person be manifesting a present intention to enter into a K ? - CA bar exam question. Woman’s father is involved in a car accident. She is shaking the doctor saying that he must perform the operation which is needed to save her father’s life after doctor at first refuses. She says he must operate and that she wouldn’t mind paying $25,000. Was there an offer here? Reasonable person test under these same circumstances.

Preliminary negotiation fact patterns D wrote M; I need these parts by this date. M wrote by mail, your order is accepted. A week later, the manufacturing seller realizes he overlooked one of the specifications requiring a far more expensive technique. Manufacturing seller was guilty of a manufacturing miscalculation

Consent Offeror must set forth the essential terms of the offer, expressly or within the range of permissible implication, she must identify parties to the proposed contract, subject matter of the proposed exchange, time for performance, and the price. Common law: Anything lacking here, too indefinite to find an offer. But! !

Common law reform If, total silence of the traders with respect to one of the essential terms of the bargain, the court will salvage the transaction by treating their mutual total silence as a consent to trade on a reasonable term. - Reasonable term: If these parties had done business before, a reasonable term would be deduced on their prior history. - If these parties had not done business before, then the court would find a reasonable term based on the customs and morays of the business trade.

If the parties half spoke to the missing term, then at common law, they wouldn’t inject any interpretation b/c it might interject a meaning the parties didn’t attend. UCC  merchants are free to adopt term setting machinery which will fix the content of an essential term in the future. EX) If D writes to M and says to him: I need these machine products by D ec. 1st, but it’s mid-November, he’s unwilling to commit to a price and states to M I’d be willing to pay for them for a price that’s set in the trade journals.

Answer Under UCC, if M agrees to abide by trade journals’ price quotation, the parties have formed a K – the 17th of November, even though they don’t know of the price term. => Also, agreement to agree in the future about essential term, this is binding as far as the UCC is concerned. Q: What if the trade journal does not publish in the future …. or the buyer says that I don’t agree to any price the seller will assent to….nothing can be done to defeat formation of the K; K is still November 17th =>

Communication If you prepare a writing that by its terms manifests a present intent as to the present K and is totally detailed as to present terms and you place the agreement on your K. And the intended offeree reads the communication …. person reads it before offeror actually reads it. Ex: X loses wedding ring. X says I offer $50 to return the lost ring. Person returns lost ring. Does the person have claim to breach of K?