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Contracts Full Course Outline

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This is an extract of our Contracts Full Course Outline document, which we sell as part of our Contracts Outlines collection written by the top tier of Harvard Law School students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Contracts Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:

*NB: This outline accords with Knapp, Problems in Contract Law: Cases and Materials (8th ed.)

Table of Contents
Objective theory of contract (book p. 5-46).............................................................................2
Mutual assent/unilateral contracts (book p. 46-75).................................................................7
Other methods of reaching mutual assent (book p. 75-96)....................................................19
Consideration (book p. 98-144)..............................................................................................22
Contract formation under the UCC (book p. 144-158)............................................................27
Battle of the forms & Electronic contracting (book p. 159-207)..............................................33
Promissory estoppel (book p. 213-281)..................................................................................40
Restitution and promissory restitution (book p. 282-325)......................................................51
Statute of Frauds (book p. 333-380).......................................................................................57
Principles and sources of interpretation (book p. 381-412)....................................................62
Parole evidence rule (book p. 412-442)..................................................................................66
Implied obligation of good faith (book p. 472-524)................................................................73
Warranties (book p. 530-550)................................................................................................76
Minority and incapacity (book p. 555-584)............................................................................79
Undue influence, misrepresentation and nondisclosure (book p. 584-622).............................82
Syester v. Banta (1965) Iowa Supreme Court.........................................................................83
Unconscionability (book p. 622-661)......................................................................................85
Public Policy (book p. 661-702)..............................................................................................87
Mistake (book p. 702-724).....................................................................................................87
Impossibility, impracticability, frustration of purpose (book p. 724-782)................................88
Express conditions, material breach (book p. 785-836)..........................................................90

1. Basis of contractual obligation a. Mutual assent i. Objective theory of contract 2.

3. 4.

5. 6.

7. 8.

ii. Unilateral contracts iii. Other methods of reaching mutual assent b. Consideration c. Formation under the UCC
i. Mutual assent ii. Battle of the forms (qualified acceptance)
d. Electronic contracting
Liability in the absence of bargained-for exchange a. Reliance on gratuitous promises i. Promissory estoppel: family ii. Promissory estoppel: commercial b. Unaccepted offers i. Limiting the offeror's power to revoke c. Liability for benefits received i. Restitution ii. Promissory restitution
Statute of frauds a. Common law b. Sale of goods under UCC §2-201
Meaning of the agreement a. Principles and sources of interpretation b. Parol evidence rule i. Classical view ii. Modern view iii. UCC
Supplementing the agreement a. Implied terms b. Obligation of good faith c. Warranties
Avoiding enforcement a. Minority and incapacity b. Bargaining misconduct i. Duress and undue influence ii. Misrepresentation and nondisclosure c. Unconscionability d. Public policy
Justifications for nonperformance a. Mistake b. Changed circumstances i. Impossibility ii. Impracticability iii. Frustration of purpose c. Contractual modifications
Consequences of nonperformance a. Express conditions b. Material breach c. Anticipatory repudiation

Objective theory of contract (book p. 5-46)
Allen v. Bissinger & Co (1923)
Supreme Court of Utah

1. Rule of Law a. If a party's words or acts, judged by a reasonable standard, manifest an intention to agree to the matter in question, that agreement is established, and it is immaterial what may be the real but unexpressed state of the party's mind upon the subject.

2. Facts a. Plaintiff: Allen. Resided in NY. Official reporter for Interstate Commerce
Commission.
b. Defendant: Bissinger & Co. Corporation buying and selling furs in Salt Lake City,
Utah.
c. P seeks to recover fees for furnishing D copy of report of proceedings before ICC.
d. No substantial conflict in evidence, which mostly consists of written communications between parties.
e. P offered copy of proceedings; D ordered copy. P sent first quarter, then second quarter. D rejected second quarter, and requests cancellation of order. P replies that P cannot accept cancelation for part of report, since labor was already expended. P continues to send third and fourth quarters of report. P sends bill for full report. D says D will not pay.
f. D argues that correspondence did not create a contract, since offer in P's letter was not accepted: P offered to furnish copy of hearings, D agreed to take copy of an "official report of the different changes in the handling of freight." Therefore,
says D, parties did not refer to same thing in transaction.

3. Procedural History a. Trial court resulted in findings and judgment for P, which D has appealed.

4. Legal Question a. If a party's words or acts, judged by a reasonable standard, manifest an intention to agree to the matter in question, is the real but unexpressed state of the party's mind upon the subject relevant to determining whether there was an agreement?

5. Holding and Reasoning: Cherry, J.
a. No, based on application of 13 C.J. 265 b. Rule in 13 C.J. 265: "The apparent mutual assent of the parties, essential to the formation of a contract, must be gathered from the language employed by them,
and the law imputes to a person an intention corresponding to the reasonable meaning of its words and acts. It judges of his intentions by his outward expressions and excludes all questions in regard to his unexpressed intention. If his words or acts, judged by a reasonable standard, manifest an intention to agree to the matter in question, that agreement is established, and it is immaterial what may be the real but unexpressed state of his mind upon the subject."
c. P offered one specific thing, an "official report." D asked for "your official report of the different charges […]" D's letter does not describe report exactly, but can be reasonably understood to refer to the official report, since no other report is referred to in P's offer, and it is in response to P's offer. D's responses to P
referred to uselessness and expense, rather than to misrepresentation or fraud,
until this action was filed.
d. Trial court judgment affirmed.
Lonergan v. Scolnick (1954)
California District Court of Appeal

1. Rule of Law a. If the promisee knows or has reason to know that the promisor does not intend it as an expression of his fixed purpose until he has given a further expression of assent, the promisor has not made an offer.

2. Facts a. Defendant: Scolnick. Placed ad in LA newspaper to sell a property in Joshua Tree.
b. Plaintiff: Longergan. Lived in New York. Responded to ad.
c. P seeks $3581, the difference between D's stated price ($2500) and the value of the land ($6081).
d. P inquired after ad for further details. On March 26, D wrote to P describing the property, giving directions, and stating his price ($2500). On April 7, P responded that he was unsure he found the property, asking for a legal description and about certain geographical characteristics, and suggesting a bank as an escrow agent "should [P] desire to purchase the land." On April 8, D responded that P
had found the property, that the bank "is OK for escrow agent," and that P "will have to decide fast as [D] expect[s] to have a buyer in the next week." D sold the property to a third party on April 12. P received April 8 letter on April 14, and responded on April 15 that he would proceed to deposit $2500 with the escrow
"in conformity with [D's] offer." When P learned that the property had been sold, P filed suit.

3. Procedural History a. Issue of whether or not a contract was entered into between the parties was first tried, reserving the other issues for a further trial if that became necessary.
The issue as to the existence of a contract was submitted upon an agreed statement, including certain letters between the parties, without the introduction of other evidence.
b. Trial court found that an offer of sale was made, but that it was conditioned upon prompt acceptance by P, which P failed to accomplish. Thus, P and D did not enter into a contract.
c. Judgment in favor of D.

4. Legal Question a. Whether a party makes an offer when asking another party if he is interested in purchasing a piece of property.

5. Holding and Reasoning a. No, since the negotiations were preliminary and did not express fixed purpose until further assent was given.
b. There can be no contract unless the minds of the parties have met and mutually agreed upon some specific thing. This is usually evidenced by one party making an offer which is accepted by the other party.
c. If from a promise, or manifestation of intention, or from the circumstances existing at the time, the person to whom the promise or manifestation is addressed knows or has reason to know that the person making it does not intend it as an expression of his fixed purpose until he has given a further expression of assent, he has not made an offer d. The advertisement in the paper was a mere request for an offer. The language used by the defendant in his letters of March 26 and April 8 rather clearly discloses that they were not intended as an expression of fixed purpose to make a definite offer, and was sufficient to advise the plaintiff that some further expression of assent on the part of the defendant was necessary.
e. Lower court affirmed.
Ray v. William G. Eurice & Bros., Inc. (1952)
Court of Appeals of Maryland

1. Rule of Law a. A contract may still be enforced even though one of the parties made a unilateral mistake in interpreting the agreement.

2. Facts a. Plaintiff: Mr. and Mrs. Ray. Owned a piece of property on which they wanted to build a home.
b. Defendant: John and Henry Eurice (the Eurice corporation). Homebuilders.
c. P seeks damages equal to the additional amount necessary to construct the house over and above the price called for in the agreement.
d. John Eurice and Mr. Ray met on January 9, 1951 and reviewed 7 pages of specifications. Changes were agreed to and noted in green ink on the original 7 pages. On February 14, Eurice corporation submitted its bid, which included 3 pages of specifications, many of which conflicted with those agreed to in the 7 pages of January 9. Ray's lawyer then drew a contract, which clearly referenced an attached, new set of 5 pages of specifications by designation, number of pages, and date (which was also February 14, like the 3-page set). The 5 pages were derived from the 7-page set, but incorporated the changed discussed
January 9. The contract stated that no deviation from the specifications was allowed with Ray's permission. On February 22, Ray and Eurice signed the contract after reviewing the contract and specifications. Ray submitted the plan and specifications to a bank for the purpose of obtaining financing. Eurice later signed the plan and specifications at the bank. On May 8, Eurice informed Ray that he had not seen the specifications and refused to build according to them.
Eurice brothers claimed that, when they signed the contract, they believed that they were agreeing to the three pages of specifications in their bid.

3. Procedural History a. The trial court, Circuit Court of Baltimore County, sitting without a jury, found for the defendant. The trial court held that there was a mutual mistake: since the plaintiff and defendant had different specifications in mind when they signed the agreement, there had not been a meeting of minds. Plaintiff appealed.

4. Legal Question a. Can a contract be enforced when a party has made a unilateral mistake in interpreting the agreement?

5. Holding and Reasoning: Hammond, J.
a. Yes, based on objective theory of contracts.
b. One who signs a contract, whether he reads it or not, is thereby bound, absent fraud, duress, or mutual mistake. It is not a mutual mistake, but a unilateral one.
A contract is enforceable despite one party's unilateral mistake. Claimed intent when interpreting a contract in immaterial of the clearly expressed language of the contract in unambiguous. It is not reasonable that D would not read the contract. It is reasonable that someone who read the contract would know that it required the 5-page specifications.
c. Trial court judgment reversed and judgment entered for P against D for
$5,933.40.



Assignment over the break: Draft a contract with neighbor
Words mean something. Eg: prof. driving red car says "I will sell you my red car." You assume that is the red car that will be sold.
Contracts begin with some sort of relationship or interaction. Plausible that contract occurs without speaking to one another, but there is some sort of interaction that creates some kind of mutual assent.

1. Parties can identify the substance of the interaction between them. Law determines whether that interaction is enforceable, the nature and obligations of interaction. Think of contracts as set of rights and duties owed to one another,
and that the law will recognize and enforce.
 Some promises are not enforced by law. In class we talk about things the law will, maybe will, and will not enforce and why. 



Precedent: decisions that have been made in similar case with similar facts. Judge rules consistently with that precedent. We have precedent due to common law system, and it allows for people to know what to expect. In the absence of precedent, judgments involve judge's values. Precedent involves a set of values, and codifies them. Contracts law relies heavily on judicial decisions.

1. What court are you in?: Courts follow precedents of higher or same court; other jurisdictions or lower courts are considered persuasive. Backwards-looking system, attached weight based on which court you are standing in front of.

2. Consistency: Allows people to know what to expect. Regulates expectations.

3. Externality: everyone is affected by another's action or nonaction. A system of precedent manages externalities and communicates signals that allows people to adjust their behavior.
Sources of contract law: Statutes; legal commentary; restatements of contract law;
judicial decisions.
Rules in common law system change very slowly. That's in part because of the value that markets place on consistency, the value that society places on the ability to have expectations. There are downsides to a system wherein rules change slowly and precedent is binding only on lower courts. In state, precedent applies only within a state; court in MA can't bind court in TX.
Role of lawyer where precedent is so important

1. Advocate: there's always a possibility that you will overrule a precedent. Use precedent or persuasively similar cases to make arguments on behalf of your client. Convince the court that the moment is right and we have historical precedent to make this decision.
 Norms: courts step in when norms are consolidated enough that people can order their lives around them. Lawyers create the conditions in which these norms can coalesce. Even if arguments initially fail, they contribute to norms which gradually build. A footnote in the opinion today can become a majority opinion tomorrow.
 Why don't we legalize all norms? Our theories fall short because law is a tool. There is a zone of autonomy in which you make decisions, and you can make them without consequence. Also, we live in a very litigious society. Our instinct as a society is to defend and assert our rights.

2. Crime

Ray v. Eurice
Objective theory of contracts: Eurice introduces this. Doesn't matter what you say, think you did, etc. It matters what you did.
What you need for contract

1. Meeting of minds
 Assent. We are looking for objective indication of agreement. In Eurice,
there was a signature. Doesn't matter whether he read it, whether he was thinking. Objective approach asks: did you intend to sign this

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