American Contract Law for a Global Age, 2017a

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In the modern world, the question of who made the offer and who made the acceptance is often irrelevant because the existence of mutual assent is so clear. When you carry the goods to the checkout counter, or click the “buy” button on a web site, or buy a burger at a fast-food window, or haggle with your friend about buying her car, the question of whether you are the offeror or offeree in such transactions makes little difference. Yet while issues of offer-and-acceptance are relatively unimportant in some transactions, they are critical in others—especially in a world in which parties deal with each other at great distances. You need think back only to Augsberg v. Leslie, in the last unit, to recall the argument that Ryan Leslie’s internet pleas were not offers. Asynchronous Contracts. The issue of contracts entered into by exchanges of communications at a distance is a comparatively new thing in the many centuries of the common law. Until there were reliable means of exchanging communications (the post and the telegraph) and recipients who could actually read, contracts were rarely formed at a distance. In the rapidly industrializing 19th century, however, such contracts began appearing with some frequency. One obvious question was how the minds of two parties can meet if they are not acting at the same time. As commerce in England was more advanced than that in the young United States, English courts often dealt with these issues before their American counterparts, and their decisions had a substantial impact. Another important point addressed in Augsberg v. Leslie is the idea that a public offer of a reward is (in the legal sense) an offer—as Mr. Leslie discovered. This rule was settled in important English cases like Williams v Carwardine, 10 E.R. 590 (K.B. 1833). That the mere fact that the reward seems extravagant does not necessarily let the offeror off the hook, as another English court held in Carlill v. Carbolic Smoke Ball Co., 1 Q.B. 256 (C.A. 1892), which also held that a newspaper advertisement could be an offer. “If a person chooses to make extravagant promises,” wrote Lord Justice Bowen, “he probably does so because it pays him to make them, and, if he has made them, the extravagance of the promises is no reason in law why he should not be bound by them.” You will meet Carbolic Smoke Ball again in the cases below. 1 Offer Inviting Acceptance. We now start with the idea of the “offer.” What kinds of statements qualify as “offers” for purposes of contract law? As you will see, there are no magic words—everything depends on wording of the communication and 1 [The infamous advertisement—which you can easily find online—stated that a £100 “reward will be paid by the Carbolic Smoke Ball Company to any person who contracts the increasing epidemic influenza, colds, or any disease caused by taking cold, after having used the ball three times daily for two weeks, according to the printed directions supplied with each ball.” 1 Q.B. at 257. Mrs. Louisa Elizabeth Carlill used the vapor-emitting ball in her nose three times daily for about two months before she contracted the flu. Upon Carlill’s demand for £100—equivalent to about $30,000 as these materials are written—Carbolic refused to pay, claiming, among other things, that the advertisement was not an offer. They lost. – Eds.] ______________________________________________________________________________ 56 CHAPTER II: CONTRACT FORMATION
the context in which it is made. Nevertheless, there are some basic rules and guidelines which the following cases are designed to help you uncover. You may want to review sections 22, 24, 26, and 29 of the Restatement (Second) of Contracts in connection with this unit. If you would like to get an idea of the bigger picture for offer and acceptance, note that the Restatement devotes a whopping 47 sections to specific rules regarding offers (§§ 24-49), and acceptances (§§ 50-70). Spending some time skimming over these sections—do not bother reading them intently quite yet—will give you some context for the issues you are likely to run across in this and the remaining units on contract formation. ______________________ Cases and Materials LEONARD v. PEPSICO, INC. United States District Court for the Southern District of New York 88 F. Supp. 2d 116 (S.D.N.Y. 1999) WOOD, U.S.D.J.: Plaintiff brought this action seeking, among other things, specific performance of an alleged offer of a Harrier Jet, featured in a television advertisement for defendant's “Pepsi Stuff” promotion. Defendant has moved for summary judgment pursuant to Federal Rule of Civil Procedure 56. For the reasons stated below, defendant's motion is granted. Background Because whether the television commercial constituted an offer is the central question in this case, the Court will describe the commercial in detail. The commercial opens upon an idyllic, suburban morning, where the chirping of birds in sun-dappled trees welcomes a paperboy on his morning route. As the newspaper hits the stoop of a conventional two-story house, the tattoo of a military drum introduces the subtitle, “MONDAY 7:58 AM.” The stirring strains of a martial air mark the appearance of a well-coiffed teenager preparing to leave for school, dressed in a shirt emblazoned with the Pepsi logo, a red-white-and-blue ball. While the teenager confidently preens, the military drumroll again sounds as the subtitle “T-SHIRT 75 PEPSI POINTS” scrolls across the screen. Bursting from his room, the teenager strides down the hallway wearing a leather jacket. The drumroll sounds again, as the subtitle “LEATHER JACKET 1450 PEPSI POINTS” appears. The teenager opens the door of his house and, unfazed by the glare of the early morning sunshine, puts on a ______________________________________________________________________________ UNIT 4: OFFERS TO CONTRACT 57
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Notices This is the first edition o
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About CALI eLangdell Press The Cent
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Unit 19: Conditions ...............
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hired Corleone family thugs 4 or an
Page 14 and 15: described herein, and agrees to fre
Page 16 and 17: 6. MARY BETH WHITEHEAD, Surrogate,
Page 18 and 19: Surrogate and WILLIAM STERN, Natura
Page 20 and 21: 10. Consider paragraph 5. Should th
Page 22 and 23: The two court opinions that follow
Page 24 and 25: Venue Venue is a concept of place
Page 26 and 27: Their first child, Ryan, was born o
Page 28 and 29: Subsequent to entering into the sur
Page 30 and 31: The sixth and final argument sugges
Page 32 and 33: It is argued by amicus that the $ 1
Page 34 and 35: no stated public policy on surrogac
Page 36 and 37: IN RE BABY M Supreme Court of New J
Page 38 and 39: adoption; the sole purpose of the c
Page 40 and 41: The surrogacy contract violates the
Page 42 and 43: Problems Donald Donor is a single,
Page 44 and 45: An Introduction to CONTRACT FORMATI
Page 46 and 47: particular obligation? In Europe, i
Page 48 and 49: The evidence is undisputed that pla
Page 50 and 51: After some negotiation a price of $
Page 52 and 53: The answer of A.H. Zehmer admitted
Page 54 and 55: no, that is beer and liquor talking
Page 56 and 57: on the Zehmers as well as on himsel
Page 58 and 59: offer and of the reward and its sub
Page 60 and 61: your professor. You will come acros
Page 62 and 63: car title you’re holding there. I
Page 66 and 67: pair of sunglasses. The drumroll th
Page 68 and 69: This letter was apparently sent onw
Page 70 and 71: Because these cases generally invol
Page 72 and 73: teenager’s schoolmates gape in ad
Page 74 and 75: Review Question 3. Note how Judge W
Page 76 and 77: cash in ten days,” it must be dee
Page 78 and 79: “Before a contract can be complet
Page 80 and 81: for the purpose of doing the work a
Page 82 and 83: accidentally being bound to unwante
Page 84 and 85: ___________________________________
Page 86 and 87: Here, we have a counter-offer. The
Page 88 and 89: parties.” Metropolitan Sports Fac
Page 90 and 91: court. See Minn. R. Civ. App. P. 10
Page 92 and 93: Thus, it clearly appears that the d
Page 94 and 95: with distribution. The parties ulti
Page 96 and 97: all essential terms. See, e.g., Sit
Page 98 and 99: Enclosed, we beg to hand you contra
Page 100 and 101: to call for an acceptance particula
Page 102 and 103: than identify himself, Dealer says,
Page 104 and 105: offer.” More often, they nod, sha
Page 106 and 107: The next attack will be my end, I a
Page 108 and 109: from all the facts and circumstance
Page 110 and 111: Notice to the agent, within the sco
Page 112 and 113: 2. Written approval by United State
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contrary in the offer, the acceptan
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HOBBS v. MASSASOIT WHIP CO. Supreme
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stranger may impose a duty upon ano
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contract in this case come into exi
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An Introduction to CONSIDERATION Th
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and you are free to change your min
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Ridge Runner that she lacked the pr
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We conclude that the territory enco
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He further answered, that it was gi
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This action was brought upon an all
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consideration does in fact benefit
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Review Question 5. The promisors in
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The distinction between such a cond
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Vincent refuses. Fritz eventually s
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enefit was money received, the subs
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they stopped work in a body, and de
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supervise this building. Under the
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The day before trial the plaintiffs
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General rules of law established fo
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For the foregoing reasons we are al
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WEBB v. McGOWIN Court of Appeals of
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100 P. 631 (Kan. 1909); Edson v. Po
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McGowin’s adult child, would that
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efuses, saying, “We had a deal.
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Giles had no right to use it. But t
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BLICESTER: That’s crazy. JUDGE: N
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A. She took the piece of paper and
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According to the undisputed proof,
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We recognize that upon different fa
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was discussed with compensation to
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CONRAD v. FIELDS Court of Appeals o
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her job at Qwest and enroll in law
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Seth Wyman’s estranged son Levi i
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An Introduction to ALTERNATIVE REGI
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consistency. Some provisions have p
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TOUSLEY-BIXLER CONSTRUCTION CO. v.
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of goods within this Article whethe
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differently from other contracts? F
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nine units was delivered and paid f
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think they have struck a deal.” Q
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more sense for contract formation t
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COMMERCIAL CODE § 2-206:12 (3D ED.
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face of which appears the notation,
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Problem 10.3 On June 1, the sales d
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except for personal use. If, howeve
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[T]he plain reading of the statute
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not lubricated in any way. Without
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we also note that Best Bolt’s vic
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(c) are fit for the ordinary purpos
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This purchase order represents the
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provision would cause no “surpris
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FLENDER CORPORATION v. TIPPINS INTE
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well that the reservations each par
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The alternate approach, recognized
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(a) Is Ivy League University a “m
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and ratified a treaty called the Un
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(2) The fact that the parties have
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e. Manufacturer in Texas contracts
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an authorized distributor of Defend
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undisputed that each of these alleg
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Treaty Text Note. Read Articles 18,
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*4 (S.D. Ohio Mar. 26, 2009); see a
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perform a substantial part of his o
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shall be settled by binding arbitra
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An Introduction to CONTRACT DEFENSE
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which extended even to being able t
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Dickerson, 72 Ala. 318 (1882). In t
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loss from the transaction, includin
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this definition. Whether other area
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ORTELERE v. TEACHERS’ RETIREMENT
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medicine, this physician “judged
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The avoidance of duties under an ag
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7. What is my total service credit?
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Review Question 5. In McGovern v. C
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will pay the full listed price of $
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endeavoured to be upheld by Perjury
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Y Contracts that cannot be performe
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you think the consideration doctrin
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NICKELS, J., dissenting. I disagree
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contracts. What is the real purpose
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At the ensuing trial, defendant den
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There may be cases in which it woul
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professional. Things were really ge
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GUENTHER v. AMER-TEX CONSTRUCTION C
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(b) Subsection (a) of this section
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Problem 14.3 Van der Rohe USA, Inc.
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sold, the terms of the sale, the na
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the judgment of a vulnerable party.
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The first issue is whether the labe
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some point or on some occasion it w
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As a matter of law, based on the fa
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or, more particularly, in cases suc
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“deprived Loral of its free will.
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As to mistake, the amended complain
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In Weger v. Rocha, 32 P.2d 417 (Cal
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I had brought back the topaz, and h
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May 5, 1886, plaintiff went out to
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arren cow is substantially a differ
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prior to the sale was Buyer aware t
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Against Public Policy. In many situ
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HANKS v. POWDER RIDGE RESTAURANT CO
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interest adversely, and identified
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illogical, in these circumstances,
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_____________________ Review Questi
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construed against the employer). Th
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acquired by virtue of effort and ex
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_____________________ Review Questi
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Mere inadequacy of consideration wi
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District of Columbia Court of Appea
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In determining reasonableness or fa
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Problems Problem 16.1 The Californi
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position to all of his patients (or
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An Introduction to TERMS AND INTERP
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contract itself. Thus written docum
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consideration of the simultaneous a
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the contract on the basis of which
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The subject-matter of the written c
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understandings or agreements.” 3
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little time to compose it . . . . A
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expressed in the writing. KN Energy
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Article 8 UNITED NATIONS CONVENTION
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contracts or that parol evidence re
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percent (50%) protein, as tested on
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get the deal they intended, and the
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Cases and Materials W.W.W. ASSOCIAT
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do so because of some identified am
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The truth is that whatever virtue a
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Absent strong public policy conside
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FRIGALIMENT IMPORTING CO. v. B.N.S.
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persuasive if sustained by the reco
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and there is force in defendant’s
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RANDOM HOUSE, INC. v. ROSETTA BOOKS
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language of the grant was broad, en
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F.3d at 1095, would conclude that t
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When Hurricane Rubin strikes the lo
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the business. The contract was sile
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party argues ambiguity), the loan f
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accordance with the terms of this c
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of the advance payments, or the num
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imbibe alcoholic beverages and stil
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significant satisfied requirement o
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TOWN OF FAIRFIELD v. D’ADDARIO Su
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damages. The notice of Kant’s act
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who had turned down lucrative offer
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were to suggest some express provis
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notice of ninety days. The plaintif
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Review Question 2. What was Judge C
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exercising discretion under the con
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NANAKULI PAVING AND ROCK CO. v. SHE
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§ 490:1-102(2)(b). The drafters of
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trade existed in Hawaii in 1969 and
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1978) (unpublished opinion) (holdin
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Plaintiff does not contest its stat
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product. The concept of “merchant
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discovery by defendant of the defec
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Unfortunately, Plumber’s work doe
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An Introduction to PERFORMANCE AND
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doctrine, so that close-enough perf
Page 438 and 439:
the number of joists used in all th
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JACOB & YOUNGS, INC. v. KENT Court
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transgressor must accept the penalt
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was for requiring this kind of pipe
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The evidence is undisputed that the
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eing a new roof. We are not prepare
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This case is simple if the perfect
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yacht remained located at SIYS’ f
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happens by mere operation of law; s
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Problems Problem 21.1 Actor is a ve
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processor for the same price as the
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venue. Under Paradine v. Jane, this
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At trial, the court allowed IH’s
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In order for a supervening event to
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The court interpreted this passage
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economic circumstances sufficiently
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A cancellation order given by her o
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e entitled to judgment. They certai
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performance is excused when unfores
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caused to communications and transp
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Following the closing of the above-
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performance. 407 East 61st Garage,
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Canal, across the Mediterranean thr
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An Introduction to REMEDIES We now
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multiplication and (very rarely) di
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It was also erroneous and misleadin
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and we turn to the question of whet
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testified that the total gas, oil,
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BRANDEIS MACHINERY & SUPPLY CO., LL
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PEEVYHOUSE v. GARLAND COAL & MINING
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explanation as to why a measure of
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work; however, where the contract p
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clear and unambiguous and the parti
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pool contractor to finish the pool
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Page 510 and 511:
Nevertheless, the English courts he
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perform the work. As Lee failed to
Page 514 and 515:
UNITED STATES ex rel. COASTAL STEEL
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emanded for those findings. When th
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the substance is that the plaintiff
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the agreement would continue on a m
Page 522 and 523:
Review Question 7. Note the paralle
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product that would be fully functio
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car to the Country Music Museum for
Page 528 and 529:
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Restatement (Second) of Contracts s
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Harrahs brings the instant action a
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contest payment for same if constru
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This is in accord with the earlier
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Defendant’s sole defense to this
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particular. Certainly, none of the
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sustained where, from the nature of
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ut will be happy to try to help in
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the full $7,500 price of admission
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Problem 25.2 Mina is a second-year
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other types of specific performance
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imposed as the remedy for breach of
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certainty, then S&M should be compe
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There is simply no requirement in t
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“other proper circumstances” th
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fence plaintiff erected to discoura
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y no means certain, at the time of
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cannot use that method of self-help
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contract price of $533,000) that La
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teacher resigned at the beginning,
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eaching its lease with Perez by the
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An Introduction to CONTRACT NONPART
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fraud, mistake, and illegality. If
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may be the diversity of opinion els
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given him by the will for a particu
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since Lawrence v. Fox in a desire t
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workers’ compensation benefits),
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to divide a lawyer’s loyalty betw
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Review Question 9. Lawyers do many
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Problems Problem 27.1 Hank and Hild
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interested in jumping into such a b
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limitations barred the claims. She
Page 602 and 603:
assigned their claim to recover the
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application to this contract as it
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A breach of contract has been defin
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moved to Arizona and had no further
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It is evident from the express lang
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contracted to assume, and the assig
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March 1 for the conveyance of Purpl
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