Contracts Outline V2

A person who is unjustly enriched by another must make restitution (repay)

• Without a good reason, conferring a benefit doesn't require restitution
• Applies when parties could have entered a K but didn't
• Ex. Playing music outside your window and asking for payment

• In the absence of circumstances indicating otherwise, it is inferred that a person who requests another to perform services for him or to transfer property to him thereby bargains to pay therefore

If a person offers aid to someone who can't consent, and has intent to charge for such aid, he is entitled to restitution

• Who performs, supplies, or obtains professional services required for the protection of another's life or health is entitled to restitution from the other as necessary to prevent unjust enrichment.
• Only if circumstances justify decision to intervene w/out request
• UE under this section is measured by a reasonable charge for services in question

• A person who takes action to protect another's property from harm is entitled to restitution from the other to prevent UE , if circumstances justify decision to intervene w/out request.
• Justified only when it is reasonable to assume the owner would wish the action performed
• UE under this section is measured by loss avoided or by reasonable charge for the services provided, whichever less.

• D hospitalized involuntarily after makes threats to his wife. Signed hospital release from. Refuses to pay hospital bill.
• Court stated that since he was "impaired" (reason for the court ordered evaluation) that he couldn't consent, and thus under R2§ 116 & 117, he's required to pay

• Restitutions = liability in absence of a promise

Restitutions = liability in absence of a promise

• Rule: when sub-con suing the owner (cutting out the gen con), need to have:
• (a) exhausted other resources,
• (b) the owner didn't pay in full

• if owner fulfilled their K with gen con, no point in going after them

• Permits recovery of compensation for services rendered even if no K formed
• Applies when a benefit is conferred w/out any K
• Promissory restitution is unjust enrichment plus a promise in recognition of a benefit
• Supports the enforcement of a promise based on past consideration or moral obligation

• Supports the enforcement of a promise based on past consideration or moral obligation

• Unjust enrichment plus a promise in recognition of a benefit.

a. Promise made where the promise is;
b. In recognition (backward looking)
c. Benefit
d. Justice must demand enforcement (4 factors - R86 cmt. b)

Justice must demand enforcement (4 factors - R86 cmt. b):
(1) Definite & substantial character of benefit received
(2) Reliance on the promise or probability of reliance
(2) FOrmality in making the promise
(4) PArt performance (property only)

(1) Not a gift
(2) Can't be disproportionate to past consideration received
(3) Scope of the K (if outside original scope, can't sue)

• Court ordered completion of payment b/c
• There was a promise to pay as consideration for saving his life, was benefit of saved life,
• Would be unjust if Webb wasn't paid,
• the payment wasn't made as gift,
• Not disproportionate to saving a life,
• Original K for payment didn't exist

(1) Promise
(2) Recognition of consideration of benefit previously conferred
(3) Justice must demand enforcement

If parties had a K and the benefit at issue was supposed to be conferred within the K, Rest. 86 restitution doesn't apply.

• Benefit at issue must have been conferred outside the scope of the K for R§ 86 to apply.
(1) Benefit conferred independent of any K
(2) Benefit conferred
(3) Promise made in recognition of benefit conferred

• A promise to a pay a debt, even when the statute of limitations has been exceeded, is a contract

Yes, A's promise of \$500 is binding

Rest. 2d Contracts 82 - Promise to pay Debt/Statute of Limitations

• Debts discharged by bankruptcy, then promised to pay, are enforceable

• A promise to perform a contract which was previously void (like one made while being a minor) is enforceable if promise to perform is given when not voidable (after coming of age)

• A promise made in recognition of a benefit previously received is binding if necessary to prevent injustice; except if benefit conferred is a gift and to the extent that the value is disproportionate to the benefit

• Couple held themselves out to be married (joint taxes, changed name);
• Upon separation, Sue wanted to split assets but they were in James's name;
• Court ruled contributions in housework and as helpmate, helping at the business, contribution of personal property, and reliance on him in giving up her own career, he was UE and thus owed her restitution

Promissory Restitution there is a promise made after the benefit is conferred

No, Promissory Restitution and R§86 aren't recognized by many jurisdictions.

• Mills tries to help sailor, sailor dies, Father told him he'd pay him, never did
• Verbal promise can't be enforced
• Gratuitous promise
• Son wasn't infant—accountable for his debts, and thus his father's promise to pay for his past care isn't valid
• Past "Consideration"/ Prior Consideration = ISN'T consideration

Benefit must be conferred within the K, if promise for benefit is not in K, it is not enforceable - (new promise to perform K)
(1) Benefit conferred pursuant to a K
(2) Parties enter k
(3) X supposed to do something, Y supposed to do something that will confer benefit to X
(4) For some reason, K isn't enforceable (Statutory bar to enforcement)(I.E., bankruptcy, SOL runs out)
(5) Y makes new promise to perform original K

PR: (1) Promise made where promise is; (2) In recognition (backward looking); (3) Benefit; (4) Justice must demand enforcement

PE: (1) Promise made where promisor; (3) foresees (forward looking); (4) Reliance; (5) Injustice; (5) Any other moral factor

(1) Promise made where promisor;
(2) Foresees (forward looking);
(3) Reliance;
(4) Injustice;
(5) Other moral factor

(1) Reasonableness of promise
(2) Extent of reliance
(3) Extent of benefits to promisor
(4) Formality: Was it in writing?

PR Justice (4 factors - R86 cmt. b) (DR. FOPA)
(1) Definite & substantial character of benefit received
(2) Reliance on the promise or probability of reliance
(2) FOrmality in making the promise
(4) PArt performance (property only)

PE Injustice (REEF) (4 factors - R90 cmt b)
(1) Reasonableness of promise
(2) Extent of reliance
(3) Extent of benefits to promisor
(4) Formality: Was it in writing?

• To make K nonrevocable - use offer estoppel
• True even if specific promise to keep offer open
• Used in two cases:
(1) General Contractor and Sub Contractor context; OR
(2) Extreme reliance (R87III. 4)

• Used in two cases:
(1) General Contractor and Sub Contractor context; OR
(2) Extreme reliance (R87III. 4)

• To make K nonrevocable

Promissory Estoppel

Use in two cases
(1) Massive reliance; and
(2) Injustice analysis - would allowing PE swallow K law if this was allowed? (IF YES, CAN'T USE PE) (Pop's Cones or bust)

Use in two cases
(1) Massive reliance; and
(2) Injustice analysis - would allowing PE swallow K law if this was allowed? (IF YES, CAN'T USE PE) (Pop's Cones or bust)

• Sometimes there's just no way to recover
• Danger of using PE or OE is danger that doctrines will swallow K law
• Worry is it becomes to easy to rely on offer, people hesitant to enter negotiations
• Want to rely on an offer? Enter an option K (Berryman)
• No option? Reliance normally not foreseeable

• The language used must be intended as an expression of fixed purpose to make a definite offer.
• Further expression of assent on the part of Offeror is not definite offer.
• Lonergan sent a letter saying money was in escrow - this was the offer, but Scolnick had already sold and thus no contract because Scolnick never accepted

• Ads are generally seen as invitations to offer, but here, the court reasoned that a reasonable person would believe the ad was an offer b/c it wouldn't require any additional negotiations;

• and deceptive ads (bait-and-switch) are interpreted as offers to protect the consumer

• Manifestation of willingness to enter a bargain is not an offer if the other party knows the first party does not intend assent to conclude the bargain

(a) Generally, advertisements are not intended to be offers
(b) A quote invites an offer based on a price given by the bidder
(c) Words like "make me an offer" generally invite offersids

Offer is a manifestation of willingness to enter into a bargain, inviting assent

(1) An offer gives the offeree power to complete the manifestation of mutual assent by acceptance of the offer
(2) Offeree gets continuing power to complete manifestation of mutual assent by acceptance

Acceptance is assent to the terms made by the offeree in the manner invited

(1) Unless otherwise indicated, an offeror invites acceptance in any manner reasonable in the circumstances
(2) Offeror is the master of his offer and can require acceptance come in a certain form or manner (if expressly stated)

The manifested intent of the offeror determines who has the power of acceptance; only the recipient of the offer may accept

An offeree's power of acceptance may be terminated by:
(1) rejection or counter-offer,
(2) lapse of time,
(3) revocation by offeror, or
(4) death or incapacity of offeror or offeree

(1) Counter-offer is an offer made by offeree relating to the same matter as the original offer, and proposing a substituted bargain
(2) An offeree's power of acceptance is terminated by his making a counter-offer

Power of acceptance is terminated at time specified by offer or after a reasonable time

Power of acceptance is terminated when offeree receives from offeror a manifestation not to enter into the proposed contract

(1) Unless the offer provides otherwise, an acceptance under an option contract is not operative until received by the offeror
(2) The mailbox rule applies to accepting the main offer kept open by the option K in this class

(1) Rejection or counter-offer by mail/telegram does not terminate power of acceptance until it reaches the offeror
(2) Acceptance after sending rejection or counter-offer is only a counter-offer unless the acceptance is received by the offeror before he receives the rejection or counter-offer

A common law rule:
(a) Offer is accepted as soon as the acceptance is deposited in the mailbox
(b) The offeror cannot revoke the offer once the acceptance is in the mailbox
(c) Must be reasonable - giving it to a mail clerk is not yet "in the mail"; not having correct postage is not "in the mail"
(d) Offeror can stipulate how to accept - thus, acceptance may not be allowed through the mail
(e) Sent (1) acceptance, then (2) rejection/counter offer

An acceptance must comply with the requirements set forth by the offeror

An acceptance that is conditional on additional terms is not an acceptance, but a counter-offer

An acceptance requesting a change in terms is not invalidated unless it is conditional on the changing of the terms

Offeree's power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect

(1) Offer
(2) Acceptance
(3) Preliminary Negotiations
(4) Reject
(5) Revoke
(6) Counter-Offer

Normile put in an offer on Miller's real estate with a provision that it must be accepted by a certain date and time; Miller made a counter-offer; Miller subsequently contracted with someone else to sell the property; Normile's agent told him "you snooze, you lose" and that it was sold; Miller initialed the counter-offer by Miller and took it to the bank to pay for the property;

Court ruled that Miller had contracted with someone else (thus no intention to contract with Normile) and that Normile had been informed of this contract (through his agent)

A contract to keep an offer open for a specified period of time without changing the terms; is reliant on consideration

• Offeror makes a promise, offeree performs as a way of acceptance

• Contract is made after offeree finishes performance

(1) Unilateral contract is only enforceable after offeree completes performance

(2) Gives the greatest protection to offeror; he can revoke the offer after the offeree has begun performance - even at the last second before completion

(1) In cases of doubt, offeree can accept through promise to perform or through performance

(2) When an offeree begins performance, then the offer can no longer be revoked—becomes an option contract—getting ready to perform though is not enough, performance must have begun

In cases of doubt [if the offer is ambiguous], acceptance can be through promise to perform, or through actual performance

Meaning it's either a bilateral or unilateral contract

(1) When an offer invites acceptance through performance, and does not invite promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it
(2) Reliance is not enough - has to be performance to make promise irrevocable

Same as promissory estoppel, except that the first element an offer, instead of a promise
(1) Offer
(2) Foreseeability
(3) Reliance - must be substantial character
(4) Injustice

Only allowed (1) in the general contractor/subcontractor context, and (2) in truly extreme circumstances involving massive reliance)

An offer is binding as an option contract if it
(1) Is in writing, signed by the offeror, recites a purported consideration, and proposes an exchange on fair terms within a reasonable time; or
(2) Is made irrevocable by statute

Industry custom shows that there is reliance; there is an implied promise to keep the offer open until the GC can accept after being given the job

(1) If the offer said it was revocable
(2) If the GC had reopened the bid after he won the job (no bid shopping allowed)
(3) If the GC had tried to get a lower bid from SC (bid chopping)
(4) If the GC had reason to believe the SC's bid was in error
(5) If the SC had told GC that this was not a firm bid (a preliminary quote)

(1) The doctrine of promissory estoppel can be invoked to enforce an option contract that is not supported by consideration.
(2) An "option" without consideration is just a continuing offer that can be revoked.
(3) Time and expenses spent trying to find a buyer can be considered consideration but ONLY where the "if/then" structure is met
(4) "Nominal" consideration (\$1, \$0.50) ACTUALLY PAID is okay when dealing with an option contract
(5) Some courts - Consideration not paid = still consideration because promise is implied

• Any symbol executed or adopted by a party with present intention to authenticate a writing
• Oral communication is never a signature

• Printing, typewriting or any intentional reduction to tangible form
• Complete symbol not necessary;
• Symbol may be printed, stamped or written;
• May be initials or thumbprint.
• On any part of the document and in a billhead or letterhead.

Person who deals in goods and holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transactions

• All things (including specially manufactured goods) which are movable at the time of identification to the contract for sale (not including the money in which the price is to be paid, investment securities, and things in action)
• Also includes unborn young of animals and growing crops and other identified things attached to realty

• Contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties that recognizes such contract
• Agreement which constitutes a contract for sale may be found even though the moment of its making is undetermined

(1) An offer by a
(2) merchant to
(3) buy or sell
(4) goods in a
(5) signed
(6) writing which by its terms
(7) give assurance that it will be held open is not revocable, for lack of consideration,
(8) during
(a) the time stated or
(b) if no time is stated for a reasonable time, but
(c)in no event may such period of irrevocability exceed three months; but any such term of assurance on a
(9) form
(a) supplied by the offeree must be
(b) separately signed by the offeror.

Unless clearly indicated by the language or circumstances
(1) An offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;

(2) An order or other offer to buy goods for prompt or current shipment shall be construed as inviting acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods

In Context A the terms &conditions are given before the exchange of money, whereas in Context B, the terms and conditions are not given until after the buyer pays,

In Context B, the terms & conditions are not given until after the buyer pays, whereas in Context A the terms and conditions are given before the exchange of money

(1) Used online with a checkbox that says "I Agree to Terms &Conditions"
(2) Beside is usually a link to the terms and conditions
(3) As long as you have reasonable notice that more terms are coming, then they are part of the contract (such as "click the box to accept the terms")

(1) Terms on a website that are terms of use for the website
(2) Terms are generally accessible, however there is no encouragement to read them
(3) Browsing equals acceptance of the terms
(4) Usually, there is something noticeable on the page that says there are more terms (banner or something when you enter the website) in this case, you are bound (reason to come across the terms)
(5) When the terms are on the bottom of the page and you had no reason to scroll down, not bound.

UCC 2-204(1) is the key statute to this case
(1) The UCC gives the parties flexibility in how the contract will be formed
(2) When a purchaser places an order (for hardware, software) (whether online or in person) the vendor/seller makes the offer (not the buyer) - this makes the vendor/seller the master of the offer

(1) Vendor was selling CD's
(2) The wrap listed how the contract would be formed
(3) The buyer has knowledge of this because they have the wrapper (even if the buyer doesn't know, the law says they should know)
(4) Terms and Conditions are part of the contract

(1) No contract was formed during the phone call
(2) No contract when the goods were delivered
(3) The contract was formed when the buyer kept everything
(5) The acceptance is when the buyer keeps the product (therein, the vendor was the offeror)
(6) Terms and Conditions are part of the contract

• Forbids enforcement of certain types of contracts unless there is a signed writing by the defendant (party to be charged)

• Failure to comply makes a K unenforceable; mere compliance is not sufficient to make a K enforceable