1. 2/2/2006Class 111 Class 11, Thursday, Feb. 2 Announcements Friday, please read pp. 208-20, including problems 3-1 and 3-2 Today’s agenda Q & A on Problem 2-2 James Baird v. Gimbel Bros. Drennan v. Star Paving Berryman v. Kmoch

2. 2/2/2006Class 112 Today is a good day to talk about options.

3. 2/2/2006Class 113 Legal basis for claim 1.breach of K 2.promissory estoppel 3.restitution a.w/out promise b.w/ promise

4. 2/2/2006Class 114 Typical Executory K prelim.executory negotiationsperiod -----------------|-------------------------|---------------------- t K formation performance due (1) mutual assent (2) consideration

5. 2/2/2006Class 115 Offer/acceptance Preliminary negotiationsK formation --------|------------------|--------------|-------------- offeracceptance termination of power of acceptance?

6. 2/2/2006Class 116 Option K 1.Express option K 2.Option K formed under §45—limited to unilateral K offer 3.By statute—e.g., 2-205 and firm offers

7. 2/2/2006Class 117 James Baird Co. v. Gimbel Bros., Inc. United States Court of Appeals 64 F.2d 344 (2d Cir. 1933)

8. 2/2/2006Class 118 owner general contractor subcontractor

9. 2/2/2006Class 119 Who is suing whom? For what kind of damages? What is the legal basis for the claim? What is the factual basis for the claim? Arguments/defenses?

10. 2/2/2006Class 1110 sequence of events bid sent on dec. 24 reached D on dec. 28 D incorporated it into its bid which it submitted that day later on 28th, P telegraphed all contractors including D of its mistake dec. 30, D’s bid was accepted dec. 31, D received a letter from P confirming its withdrawal of its bid P formally accepted D’s offer on Jan. 2--why did P do this?

11. 2/2/2006Class 1111 What happened at trial? What happened on appeal? Issue? Authorities/Rule? Application to facts in case? What policies does it further/ignore?

12. 2/2/2006Class 1112 Judge Learned Hand

13. 2/2/2006Class 1113 Symmetry “If, for example, the successful one had repudiated the contract with the public authorities after it had been awarded to him, certainly the defendant could not have sued him for breach.” p. 191, middle of page

14. 2/2/2006Class 1114 Express language D’s offer—”If successful in being awarded this contract, it will be absolutely guaranteed.” “... we are offering these prices for reasonable [sic] prompt acceptance after the general contract has been awarded.”

15. 2/2/2006Class 1115 How could P have protected itself?

16. 2/2/2006Class 1116 Promissory estoppel

17. 2/2/2006Class 1117 Option

18. 2/2/2006Class 1118 Note 1 Why doesn’t use of a subcontractor’s bid by a general contractor constitute acceptance?

19. 2/2/2006Class 1119 Note 3 Mistake

20. 2/2/2006Class 1120 Drennan v. Star Paving Co. California Supreme Court 51 Cal. 2d 409, 333 P.2d 757 (1958)

21. 2/2/2006Class 1121 Who is suing whom? For what kind of damages? What is the legal basis for the claim? What is the factual basis for the claim? Arguments/defenses?

22. 2/2/2006Class 1122 What happened at trial? What happened on appeal? Issue? Authorities/Rule? Application to facts in case? What policies does it further/ignore?

23. 2/2/2006Class 1123 Roger Traynor

24. 2/2/2006Class 1124 Option K 1.Express option K 2.Option K formed under §45—limited to unilateral K offer 3.By statute—e.g., 2-205 and firm offers 4.Reliance

25. 2/2/2006Class 1125 §87 (2)An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.

26. 2/2/2006Class 1126 Problem Set 1, 21 "I offer to sell you Blackacre for $10,000, offer to remain open until Friday." You spend money and time to do a title search and other activities in preparation for acceptance. You come to me on Thursday, and before you can say, "I accept," or to hand over the money, I say, "I revoke." Is this revocation effective?

27. 2/2/2006Class 1127 Berryman v. Kmoch Supreme Court of Kansas 221 Kan. 304, 559 P.2d 790 (1977)

28. 2/2/2006Class 1128 Who is suing whom? For what kind of damages? What is the legal basis for the claim? What is the factual basis for the claim? Arguments/defenses?

29. 2/2/2006Class 1129 What happened at trial? What happened on appeal? Issue? Authorities/Rule? Application to facts in case? What policies does it further/ignore?

30. 2/2/2006Class 1130 Distinguishing cases Talbott v. Nibert –what fact makes Talbott off point with regard to Berryman v. Kmoch Steel v. Eagle –what fact makes Steel distinguishable from Berryman?

31. 2/2/2006Class 1131 Recital of consideration see note 3, p. 206

32. 2/2/2006Class 1132 Nominal consideration see note 2, p. 206

33. 2/2/2006Class 1133 mailbox rule and options note 5, p. 207

34. 2/2/2006Class 1134 End of class for Friday: 208-20; including problems 3-1 and 3-2