I.

Syllabus Questions
II. Contracts background
III. Contract basics
IV. Mutual Assent
V. Consideration
a. Cases
VI. Classical v modern principles
VII. Bilateral contracts
VIII. Unilateral contracts
IX. UCC
X. Modern Contracting
XI. Parol Evidence rule
XII. Promissory estoppel
a. Cases
XIII. Revocability
XIV. Remedies
XV. Problems from book
XVI. Practical considerations
XVII. Policy
XVIII. Procedural rules

Questions
I. Syllabus Q’s
a. Define contract. 
b.Distinguish between contract and promise.  
c. Distinguish between traditional and modern models of
contacts. 
d.Examine a single case in detail and understand it’
parts. 
e. Determine when people are bound to a contract. 
f. Understand the contract formation involves rules of
communication and that communications have legal
consequences.
g. Distinguish between being bound by words and being
bound by actions (or inactions.)
h.Understand the element of consideration as necessary
for contract enforcement.
i. Distinguish different forms of consideration.
j. Distinguish between negotiated contracts and contract
made by forms and electronically.
k.Understand that during negotiations one party can rely
on representations and incur costs.
l. The question, then, is: Even without a contract, can a
party be responsible for damages?
m. Understand the variety of situations that legal
liability attaches to words or actions with a formal
contract.
n.Understand that someone may not “scoop up benefits”
unjustly.
o. Understand that in addition to consideration, formal
contracts must satisfy other requirements such as some
contracts must be in writing.
p.Understand that even a fairly clear rule such as “certain
contracts must be in writing” has exceptions to avoid
injustice.
q.All communications require interpretation. even the
clearest oral or written communication may not be
heard the same way between two parties. Therefore
there are rules of contract interpretation the students
must understand.
r. Understand that after a contract is formed, sometime its
terms may be changed and at other times they may not
be changed. Much turns on conceptions of fairness.
s. Understand that even the most detailed agreements
may not contain all of the obligations of the parties.
When will courts “supplement” a contract by adding
terms or obligations?
t. All written agreements are not enforceable, a party
must meet certain age and mental capacities.
u.A contract must be freely exerted into and not a
product of undue pressure or coercion.
v. Understand that a party cannot be misled in to making
a contract.
w. Understand that a contract cannot be
unconscionable or against public policy. You cannot
have a murder for hire contract for example.
x. Understand such things as changed circumstances,
impossibility, mutual mistake, and others.
 y. Understand that even while performing a contract, the
parties can change the terms by agreement but not
unilaterally.
z. Understand the consequences of not performing a
contract. First distinguish between a major and a minor
bridge and the fact that they were different remedies
for each.
aa. Understand that even before contract performance
begins it is possible that legal obligation to rise. It is
also possible that legal obligations are extinguished.
bb. Understand that people go to lawyers to obtain
relief. If a party (1) wants performance; (2) wants to be
excused from a contract; or (3) feels injured by failing
to perform then they need a remedy.
cc. Understand that the basic remedy is to give parties
what was promised to them. They should obtain the
benefit of their bargains. This is known as expectation
damages.
dd. Understand that sometimes expectation damages
are not available, and a party is limited to the costs
incurred in relying on a contract
ee. Understand that sometimes damages, i.e. money, is
not the most desired remedy. Sometimes people want
exactly what they bargained for. If you promise to sell
me a particular painting, then I will ask a court to order
you to sell me the painting.
II. Contracts background
 a. Set of rules establishing relationships between people,
and for the transfer and exchange of legal rights to
property.
i. rules of communications between people engaged
in transactions.
b.Foundational in creation of social institutions, such as
corporations, philanthropies and governments. The
Constitution is a contract between the people and their
government.
c. Based on common law imported from England.
d.Some scholars argue contracts common law orders
society for economic purposes and promotes
efficiency.
i. Others say contracts enable us to exercise our
moral autonomy and create legal duties and
obligations toward each other.
e. Law viewed from various perspectives
i. Historical (law always evolving)
ii. Theoretical (academic thought about contracts)
iii. Lawyering (real impact on people)
III. Contract basics
a. Ordinarily means agreement between two or more
persons as to something that is to be done in the future
by one or more of them.
i. Includes a legal effect: an obligation for which
some sort of legal enforcement is available if
performance doesn’t happen as promised.
 ii. Contracts are legally enforceable promises.
b.Performance: Act of doing that which is required by a
contract.
c. Offer: manifestation to enter into agreement so that
offeree understands acceptance will conclude
agreement.
d.Elements
i. Agreement in fact of parties
ii. Agreement as written (which may or may not
correspond to agreement in fact)
iii. Set of rights and duties created by previous two.
e. Executory contracts: Contracts that call for future
performance.
f. Statute of frauds: Certain kinds of contracts must be in
writing.
g. Fraud or duress could be breach of contract.
h.Lease agreements moving into contract law more
recently and out of property law.
i. Contract formation. Agreements can be reached in a
variety of ways:
i. Offers and counter offers
ii. Promises made in form or circumstances
iii. One party prepares form of agreement it will
commit to without further negotiations, invite
other party to assent to also being bound to it.
iv. Restatement: Formation of a contract requires a
“bargain in which there is a manifestation of
 mutual assent to the exchange and a
consideration.”
j. Interpretation: Words in contract and conduct can
express intentions. Courts may have to interpret
ambiguity.
k.Defenses to enforcement:
i. Misconduct by one party
ii. Aspect of agreement violates public policy
iii. Events after the fact, not based on misconduct by
parties but just their inability to foresee an inability
to complete contract.
l. Nonperformance and its consequences
i. Most often: money damages
ii. Damages provide social utility of contracts.
m. Rights of third parties
i. Others can acquire rights to contracts.
ii. Sold contract can be used as security or collateral
for a loan.
n.Sources of contract law
i. Prior judicial decisions, statutes, ordinances
ii. Restatements of law (secondary source)
iii. Legal scholars
iv. UCC – Uniform Commercial Code (every state but
Louisiana has adopted)
1. Model statute
o. Scholarly disagreement: Economics v morality.
Instrumental to economic exchanges or intrinsic to just
society?
 i. Williston: decisions unaffected by moral or
political values: Formalism
ii. Formalism rejected in modern era by realistic
jurisprudence. Rules instead should be evaluated
based on social interests they served. Emphasized
good faith and unconscionability rather than
mechanical rules.
1. Relational scholars: good faith, fair dealing,
morality, consent.
2. Realists maintain existing contract law favor
powerful
iii. Some view contracts from moral point of view, as
foundation of principles of justice. Promise is
person acting as moral agent, exercising moral
autonomy.
p.Efficiency: increases when cost of transactions
decreases.
i. Economic analysis school of thought have two
claims about relationship bt law and economics
1. Empirical argument that legal rules tend in
general to reach efficient outcomes and
2. Normative claim that inefficient rules of law
should be modified in direction of greater
efficiency.
3. Tomain: contracts (and torts and property)
foundations of a market economy.
 q.Chicago school of thought: Courts should not refuse to
enforce agreements merely because they are unfair.
Only refuse when there’s misconduct (fraud or duress)
r. Lawyer roles
i. Counselor: objectively predict outcome of case or
advise on client entering contract.
ii. Negotiator: understand client’s needs and
aspiration
iii. Drafter: write agreement.
iv. Advocate: persuasive arguments for your client in
court.
s. Barter is different than contract, which are promises
and obligations that need to be fulfilled by contract
timeline. A barter is a simple rock for shell trade.
t. Largest issue today: How to deal with society that
believes face to face negotiations are rare and
inefficient?

IV. Mutual assent

a. Bargain > mutual assent

i. Traditional way contract was formed.
ii. But possible for person to incur legal obligations
even though didn’t enter consideration-supported
contract (such as through restitution or promissory
estoppel)
b.Mutual assent is not necessarily meeting of the minds.
 i. Meeting of minds is subjective, actual intention of
parties was to agreement as laid out.
1. Actual intent of party (Zehmer) controls, not
party’s conduct.
ii. Mutual assent is objective (Ray), apparent
intention of parties was to agree. This is prevailing
method for determining contract. Looks to
outward expression, words and acts.
1. both signed contract, for example. Looks to
conduct from reasonable person viewpoint.)
iii. Holmes supported objective theory and gave two
policy justifications:
1. Efficiency: inquiring into subjective intentions
is very difficult, would make enforcement
difficult.
2. Fairness: subjective theory is unfair because
parties should know how their words would
be understood.
3. But Aharon Barak, who served on the
Supreme Court of Israel, wrote that shifting to
the subjective theory would add security and
certainty to contractual law, as under the
objective theory, everything depends on a
judge’s sense of the contractual language. If
true, this would benefit those parties who
write that language, making it inequitable.
c. Cases
 i. Allen v. Bissinger (Mutual assent)
1. Facts: P sought recovery of fees for providing
D a copy of official Interstate Commerce
Commission report. P won because reasonable
conclusion D and P had mutual assent. D
asked for report but only later complained of
high price and different product than
expected, not of breach (that it hadn’t agreed
to receive report).
2. D wrote: “We will be interested in your
official report.”
ii. Lucy v Zehmer (Bargain>mutual assent > contract)
1. Facts: Zehmer said he jokingly signed contract
after negotiating price to sell his land, having
wife sign contract as well.)
2. Court found for buyer. Contract was real for
these reasons:
a. contract and performance discussed for
40 minutes
b. objections raised and drafts revised
c. multiple parties on one side signe
d. buying party takes contract without
objection from sellers
3. Legal reasoning: “must look to the outward
expression of a person as manifesting their
intention rather than their secret, unexpressed
intention. Law imputes to a person intention
 corresponding to reasonable meaning of their
words and acts.
4. Mental assent not requisite to formation of
contract. Undisclosed intention immaterial
except when unreasonable meaning attached
to party’s manifestations is known to other
party (Restatement of Law of Contracts)
iii. Ray v Eurice Brothers (Objective assent)
1. Facts: Ray wanted house built. Eurices were
builders. Parties negotiated. Eurices said they
thought contract referred to their 3-page
specifications, even though contract referred
to the Ray’s 5-page specifications. Eurice also
later signed contract and specification pages
for Building Association
2. Held: Ray won because Eurice breached
contract by not performing.
3. Rule: Williston: “The only intent of the parties
to a contract which is essential, is an intent to
say the words and do the acts which constitute
their manifestation of assent.”
4. Reasoning: Restatement, Contracts, Section
70: “One who makes a written offer which is
accepted, or who manifests acceptance of the
terms of a writing which he should reasonably
understand to be an offer or proposed contract,
is bound by the contract, though ignorant of
 the terms of the writing or of its proper
interpretation.”
5. Remedy: Difference in price to build home.
Rays wanted one built for $10 by Eurices,
Eurices don’t perform, Rays have someone
else build for $16k, so Eurices owe them $6k.
Why? Tomain: in contracts we like to make
people whole. Can do that here by giving Ray
house at price he bargained for.
6. Spouses have joint property rights.

V. Consideration
a. “quid pro quo”
b.Thing given in return for something else, necessary to
make agreement legally enforceable.
i. A bargained for exchange. Tomain: shows what
types of promises will be enforced. Formal
function of ID’ing those promises.
c. Benefit to promisor or detriment to promisee.
i. Benefit-detriment analysis: one person receives
something and other person parts with something
(detriment)
d.Restatement Second Contracts §71:
i. Consideration exists for a promise if its
performance would be part of “bargained-for
exchange,” in which one party’s performance is
the price of the other’s (performance).
e. Restatement consideration approach:
i. To constitute consideration, a performance or a
return promise must be bargained for.
1. It’s bargained for if it is sought by the
promisor in exchange for his promise and is
given by the promisee in exchange for that
promise.
ii. The performance may consist of
1. an act other than a promise, or
2. a forbearance, or
3. the creation, modification, or destruction of a
legal relation.
4. The performance or return promise may be
given to the
f. If promise not commercial (ie between family or
lovers) consideration may not be so obviously present.
g. In many cases consideration is reciprocal exchange of
promises.
h.Generally, offeror may withdraw an offer at any time
prior to acceptance unless offer is supported by
consideration.
i. $10 and other good and valuable consideration is
adequate because shows you took effort and intended
to enter agreement. It’s formalizes agreement much
like a seal once did.
i. But contrast with Restatement which seems to
reject nominal consideration.
j. Cases
i. Hamer v. Sidway (benefit detriment analysis)
1. Facts: Story Sr. promised his nephew, Story
Jr., that if Jr. would refrain from
drink/tobacco/swearing/playing cards or
billards for money until he was 21, he'd pay
him $5k. Jr. did it and sought the money. Sr.
wrote back that he'd get the money as
promised, but then Sr. died in 1887 without
having paid Jr. any of the money.
2. Terms: Forbearance: refraining from doing
something that one has legal right to do
3. PP: Trial court issued judgement in favor of
plaintiff. Intermediate appellate (General
Term of the Supreme Court) court reversed
trial court judgement.
4. Defense: Uncle didn't benefit from promise,
so no consideration. Jr. by refraining from
alcohol actually benefitted.
5. Issue: sufficient consideration?
6. Rule: “Consideration in the sense of the law
may consist either of some right, interest,
profit or benefit accruing to the one party, or
some forbearance, detriment, loss or
responsibility given, suffered or undertaken by
the other.”
7. Held: promise by Sr. was enforceable because
Jr. performed forbearance.
 8. Third party acquired letter (promissory note)
thru mesne conveyance. You can assign your
rights (to award of contract) to someone else.
But can’t destroy nature of contract, ie if
painter agrees to paint someone then delegates
the painting work to another painter.
ii. Pennsy v. American Ash (benefit-detriment
analysis)
1. Facts: Pennsy obtained subcontract to pave dat
a Penn. school district. Paving material
(AggRite) was provided for free by American
Ash. But just two months after completing
work, pavement developed extensive
cracking. Pennsy had to remedy the defects at
a cost of nearly $400k ($133k to dispose
AggRite). Pennsy asked American Ash to
dispose material but AA did not.
2. PP: Pennsy loses, “lack of consideration”
3. Held: AA's promise to supply AggRite for
free induced Pennsy to assume the detriment
of taking the material, and critically, that it
was this very detriment … which induced AA
to make the promise to provide free AggRite
for the project.
Rule: An aid, though not conclusive test, in
determing which construction of the promise
is more reasonable is an inquiry into whether
the occurrence of the condition would benefit
 the promisor. If so, it is a fair inference that
the occurrence was requested as
consideration." (Ameri Jurispr 2d)
4. Analysis: Bargain theory of consideration
does not actually require parties bargain over
terms of agreement
5. Gift v consideration? Tramp example: rich ass
man gives homeless person offer to buy
clothes at nearby store. No reasonable person
would think walk to store is consideration
(Williston).
6. Restatement: agrees with Pennsy that actual
negotiation not required. “performance or
return promise is bargained for if it is sought
by the promisor in exchange for his promise
and is given by the promisee in exchange for
that promise.”
7. Class notes: Court lays out neatly the factors
needed for breach of contract: 1) existence of
contract. 2) breach of a duty imposed by the
contract 3) resultant damages.
a. Party MUST know it benefits Ash. If
Pennsy just thought it was a gift, they
assume risk
b. Was duty of Ash to give Pennsy AggRite,
or to give them AggRite that wasn’t
defective? Unclear.
iii. Dougherty v Salt
 1. Facts: Charley's aunt gave Charley, 9, a
promissory note for $3,000 payable at her
death or before. The printed note said "Value
Received." Boy's guardian said the aunt said
"You have always done for me, and I have
signed this note for you." Aunt died before
making the payment.
2. No consideration, so promissory note was not
a contract.
3. Rule: A voluntary and unenforceable promise
of an executory gift has no consideration.
“Aunt was conferring a bounty.”
4. What if Charley gave $1? Under first
Restatement, nominal consideration was
enough. But Second Restatement rejects the
possibility.
iv. Plowman v Indian Refining Co.
1. Facts: Ps claim Indian Refining VP told them
they could no longer work, but would receive
half their wages for the rest of their lives. VP
claims he told them he hoped the payments
would last for life. Payments terminated after
time. A letter from 1930 does not promise
lifetime payments. Ps claim temporary
payments ratified agreement for life payments
even if manager didn't have authority to pay
employees for life.
 2. Estoppel: principle which precludes a person
from asserting something contrary to what is
implied by a previous action or statement of
that person or by a previous pertinent judicial
determination.
3. Held: Valid contract was not established by
parties. Decree in favor of defendant
dismissing plaintiff's bill for want of equity.
Plaintiffs picking up their checks was only a
condition, not consideration, of gratuitous
pension. Act was not detrimental to plaintiffs,
but were detriment to defendant without
benefit. This is not consideration
4. Rule: Moral consideration is generally
rejected as actual consideration to make
contract legally enforceable. Past
consideration (men’s past work for company)
is self contradictory, something already done
can't be consideration for new promise.
v. Dulany Foods v CM Ayers: (Note case): company
promised severance pay to employees who
remained until given date as the company prepped
to close a plant and sell it. The court’s statement
(pg. 125-126) implies the employee’s good will
created a more desirable plant for buyers, as it
evinced an efficient workforce, and as such was
consideration for the employees’ severance offer,
 which company argued staying on to work was
just a condition.
vi. Dohrmann v. Swaney (grossly inadequate
consideration)
1. Facts: Dohrmann approached Rogers about
adult adoption. Later, Dohrmann met with an
estate planning attorney to inquire what one
would do to receive something in exchange
for something when a person died. The
agreement: Dohrmann, a wealthy 89 yr old
widow, and Rogers, signed a contract that
stated Dohrmann would receive $4 million
plus an additional $1.5M apartment and
furnishings at Drake Tower in Chicago IF
Dohrmann helped the Rogers name live on by
incorporating it into Dohrmann's two
childrens' names and other ‘valuable
consideration’. Dohrmann's sons only used the
added middle name intermittently. Dohrmann
added it as a second and third middle name to
his kids.
2. Held: Contract had grossly inadequate
consideration from Dohrmann as well as
circumstances of unfairness.
a. Grossly inadequate: $5.5 million for
name change that is impermanent, used
intermittently and nominal (second and
third middle names).
 b. Unfairness: vastly diff. bargaining powers
b/t parties: age of Rogers (89), education
(Dohrmann was neurosurgeon), Rogers
did not consult her estate advisor.
3. Rule: Not function of court to review
consideration to decide whether each party
made a bad bargain, unless the amount is so
grossly inadequate as to shock the conscience
of the court.
4. Notes: other doctrines that may have applied:
fraud, lack of capacity, undue influence.
5. Tomain: don’t need to change much to get
Dohrmann a windfall and satisfy
consideration. Maybe if changed kids’ last
name to Rogers.
vii. Jannusch v. Naffziger
1. Food truck sold including tangible assets such
as fridge. Buyer took over truck and worked
in biz at festivals. Oral agreement, no written
contract. Buyer returned it said they didn’t
want to do the deal.
2. Issue: should UCC Article 2 (goods) apply?
3. Held: The UCC should apply because
significant tangible assets involved. (Article 2
doesn't apply to services). Essential terms
were agreed on, and a contract may be formed
even though some terms may be missing.
 Conclusion: Agreement did exist to sell F.F.
for $150k, and defendants breached
agreement.
4. Rule: If significant tangible assets are
involved in a contract, then UCC Article 2
governs. Plus, contract may be enforced even
if some terms are missing.
a. Terms included price, items to be
transferred.
viii. Marshall Durbin Food Corp v. Baker
(forbearance)
1. Facts: Durbin, majority owner of Marshall
Durbin Food, offered an "agreement of
termination and/or early retirement" to Baker.
The contract had conditions that would trigger
an effective date after which Baker would be
paid a monthly salary for 5 years. One
condition was Durbin's death or incapacity.
Durbin later died, and Baker sought the
payments. The company said the contract
wasn't valid but did not give a basis for the
claim of invalidity. Baker sues.
2. Issue: Did existence of bargained for
consideration make contract valid?
3. Baker wins.
4. Illusory promise may create a unilateral
contract and the promisor who made the
illusory promise can accept it by performance.
 5. Reasoning: Baker's actual continued
performance (work) with company was
sufficient consideration. Company promised
that IF Baker continued employment until
Durbin death or other triggering event, he
would be compensated for 5 years.
a. Baker's forbearance from seeking other
jobs equaled detriment, and the Company
benefitted from his employment.
b. Tomain: Baker faced detriment by not
seeking out outside employment during
volatile time at company. Baker helped
turn company around economically. Still
consideration if company didn't turn
around, good faith effort, he agreed to try.

VI. Classical v modern principles

a. Classical
i. Offer and Acceptance (from Restatement Second
Contracts):
1. Power of acceptance created by offer will be
terminated by offeree’s rejection, offeror’s
revocation or death or incapacity.
2. Acceptance must be unequivocal and
unqualified for contract to be formed.
 3. Qualified acceptance constitutes only a
counteroffer, will have same effect as
rejection as far as power of acceptance is
concerned.
ii. Contract only accepted if you accept each and
every term of offer without deviation.
iii. Classical unilateral contracts
1. Viewed offeree’s rendering of requested
performance as both consideration and
acceptance of offer.
iv. Incomplete contracts problematic for Classical
theory. As long as parties know there’s an
essential term not yet agreed on, there’s no
contract.
v. Last shot rule (see Princess)
vi. Factors considered in question of whether parties
intend to be bound:
a. If type of agreement is one usually put
into writing
b. If agreement contains many or few details
c. If agreement involves small or large
amount of money
d. If agreement requires a formal writing for
full expression of terms
e. If negotiations indicated that a formal
written document was contemplated at
completion of negotions.
 vii. Classical based on two assumptions that are
breaking down today:
1. Parties have relatively equal bargaining power
2. Parties engaged in a process of bargaining.
viii. Offer is basically always revocable, even if offer
states otherwise.
ix. Incompleteness of contract
1. Reasons: cost of continued bargaining may
not appear justifiable in light of relative
infrequency with which disputes involving
such omitted matters actually arise.
2. party’s failure to pursue bargaining further
may stem from belief that if a dispute
involving a particular type of unresolved issue
were in fact to arise, she would prevail.
3. Parties themselves may by agreement have
explicitly designated certain matters for
postponed decision making, for agreement at
some future time.
4. Case examples of incompleteness: Walker v
Keith
a. Facts: Keith rented from Walker for 10
years, $100 a month, option to extend
lease for another 10 year term. Contract
said rent for second term will be for
“comparative bases of rental value.”
 Parties couldn’t agree on rent amount for
renewal
b. Lower court fixed rent at $125, but
appellate said lower erred. “courts should
not expend their powers to establish
contract rights to parties who failed to
complete an agreement.” Lack of
certainty. (But Tomain says he thinks
court was lazy, could have determined
reasonable price.
c. UCC says open price term won’t
necessarily prevent enforcement of
contract for goods. UCC screenshot:

5. Quake Constru. v American Airlines

a. Facts
b. Quake awarded contract for project at
O’Hare airport. Letter of intent to Quake
from general contract Jones was that
Quake had been “awarded the contract.”
But Jones “reserves right to cancel”
c. Issue: ambiguity: was letter of intent an
offer or merely a letter of intent? Was
Jones bound by it or was it incomplete
contract formation?
d. Rule: A letter of intent, if it is
substantially like a future formal contract,
if its language can be construed as
binding (reserve right to cancel), and if it
authorizes a party to begin work (possibly
without a formal contract given short time
frame from letter of intent to work
commencement), it can be binding.
e. Held: ambiguity should be decided by
trier of fact. Remanded for evidence and
trial of fact.
f. Tomain: Look at letter of intent,
completion dates of contract, one might
say negotiations were indicative that
quake was going to do the work.
Alternatively, American indicated it
wanted formal contract, and could argue
 amt. of money made it want formal
contract.
g. Risk of bidding not reliance on general
contractor/owner because subcontractor
assumes that risk and may not win.

b.Modern/contemporary
i. Tomain: Don’t have to accept each and every term
of offer for acceptance. “let’s not be so draconian
that you have to accept every single item because
that’s not how contracts are formed in the real
world.”
ii. Mutual assent in internet age hasn’t altered
requirement that mutual manifestation of assent,
whether written or spoken word or conduct, is
touchstone of a contract.
iii. Offer is not always freely revocable.
1. CISG provides it’s not if:
a. Offer states it’s not revocable (perhaps by
stating fixed time for acceptance)
b. It was reasonable of offeree to rely on
offer as irrevocable and offeree acted in
reliance.

VII. Bilateral contracts

a. Both sides exchange promises to do something for the
other.
b.Offer and acceptance: process of negotiation through
which bilateral contracts are adopted.
c. Process of entering a contract:
i. Preliminary negotiations
ii. Offer by one party: direct, complete proposal of
agreement to enter that provides exchange of
defined performances.
iii. Offer gives offeree the power of acceptance. If
accepts, offer legally binding. Moment contract
comes into being.
iv. If offeree doesn’t accept, can make counteroffer
which I think kills her power of acceptance for
first offer.
v. Offer may be revoked if time limit expires or
offeror revokes before acceptance.
vi. Even use of term offer doesn’t always mean legal
offer has been made. Restatement says
communication isn’t offer if person doesn’t intend
to enter into a bargain until a further manifestation
of assent.
d.Once you refuse, offer closes and you can’t go back
and accept.
e. Counteroffer: kills original offer and forms new offer.
f. Option contract
 i. Promise to keep an offer open in a binding way.
But it must be supported by consideration by the
offeree or some other basis for enforcement.
g. Mailbox rule
i. Acceptance by offeree will in some cases be
treated as effective as soon as it was dispatched
(mailed).
ii. But offeror can stipulate mailbox rule not
applicable.
iii. CISG: if acceptance lost in mail or delayed, offer
void.
iv. This rule can be avoided by offeror placing
stipulation in offer that acceptance must be made
in given way or during given time.
h.Ads generally aren’t offers.
i. Cases
i. Lonergan v. Scolnick (Prelim. Negotiating)
1. Facts: Seller placed ad to sell land. Seller
wrote to buyer saying his rock bottom price
and saying it was a form letter. Seller wrote to
buyer that bank for escrow was OK, that
buyer had to move fast because another buyer
existed. Seller sold to another buyer.
a. Escrow: If you want to enter contract and
show you’re serious, you can put money
in bank and if deal goes through, you get
money, if deal fails, I get money back
 2. Held: Buyer and seller did not reach an offer
as they were merely preliminarily negotiating.
Seller indicated other buyers were interested,
signaling seller’s reserving right to sell on first
come basis.
3. If a promise or manifestation of intention is
directed to a person, and the person knows or
has reason to know that the promise is not
intended as an expression of fixed purpose
until a further expression of assent, then no
offer has been made. (Restatement)
4. Ad is solicitation of offers, not an offer itself.
5. Tomain: this was form letter, not offer by D.
ii. Normile v. Miller (Counteroffer)
1. Facts: Normile, P, submitted offer to D, seller,
to buy property. Seller signed doc but also
made changes, including money deposit,
down payment, term of loan and unpaid
principal. This counteroffer specified no open
period (period in which offeree had to accept).
Another buyer made offer, seller accepted.
2. “You snooze, you lose.” Normile thought the
deadline in his original offer controlled. It
didn’t. Quote served as notification from
realtor.
3. Rule: Purchaser can’t accept counteroffer after
revocation. Offeror can revoke at any time
 before acceptance. Notice of revocation must
be communicated to offeree to terminate offer.
Indirect comm. suffices.
4. Normile did not manifest intent to accept
counteroffer in time.
5. In class: Segal is actual buyer and he’s
included because couldn’t turn deed over to
him because sale was contested by this suit.
a. Listing home is soliciting offers like in
Longergan case ad.
b. Hypo: if I text you and say buy my car,
but you respond a week later, acceptance
not binding because texts are
instantaneous communication and you’ve
waited too long. Context of offer matters.
iii. Princess Cruises v. GE (Last shot doctrine)
1. Facts: Princess sent purchase order to GE for
$260k with brief description of services to be
performed. Order was offer. GE faxed back a
Fixed Price Quotation, offering to provide
services and materials for $231k. Princess
gave GE permission to proceed based on GE’s
Final Price Quotation, which said damages
could not be for more than contract price.
Issue during repair meant Princess taken to
shore causing delay and canceling cruises
costing Princess millions. Princess paid GE
full amount of $231k. Princess sued.
2. Issues: UCC applicable? Was GE’s fixed price
quotation doc a counteroffer that is basis of
contract?
3. Held: UCC doesn’t apply because contract
was for services
a. Request for ‘service engineer’; quotation
for services; Princess counsel admitted
complaint arose out of GE’s deficient
services.
b. Predominant purpose test decides if
contract is for goods or services and thus
falls under UCC or not.
c. Mixed maritime contracts subject to
predominant purpose test.
4. Held: GE’s fixed price quotation was
counteroffer, and Princess accepted by
performance (paying cost of contract).
a. Jury awarded Princess millions, which
was too much because GE’s counteroffer
limited damages.
5. Rule: Last shot rule (Classical): party
impliedly assents to and thereby accepts a
counteroffer by conduct indicating lack of
objection to it. Based on questionable notion
of implied consent (favors sellers, who
normally fire last shot) (Classical rule)
6. Notes: Court in Princess failed to quote
comment a in Restatement, which discusses a
 qualified acceptance, a counter proposal that
ordinarily terminates power of acceptance of
original offeree. Additional or different terms
are to be construed as proposals for modifying
the ORIGINAL CONTRACT. Such proposals
may be accepted by silence of original offeror.

VIII. Unilateral contracts

a. Offer
i. Commits one to performance if and only if the
other party first accepts offer by actually rendering
performance.
b.Risk
i. Low for offeror because won’t perform until
receiving performance from offeree
ii. High for offeree, because may work to fulfill
performance only for offeror to revoke. (though
law has developed to protect against this by
limiting power to withdraw if offeree has begun
performance)
c. Restatement protects offeree by providing that when
offeror invites acceptance by performance, beginning
of performance creates option contract, and offeror
precluded from revoking offer
d.Restatement: Beginning to perform. If invited
performance takes time, the invitation to perform
necessarily includes an invitation to begin
 performance. In most such cases the beginning of
performance carries with it an express or implied
promise to complete performance
e. New-style unilateral: Courts now use unilateral
analysis not to avoid liability but enforce it by
imposing liability on offeror in cases where no
promissory acceptance from the offeree was invited or
required. cases in which offeree is not necessarily
committed to full performance.
f. Mutuality not required.
g. Examples:
i. Frequent flier miles, scholarship award, employer
bonus, rewards programs
h.Cases
i. Cook v. Coldwell Banker
1. Facts: P was a real estate agent offered a step-
scale bonus based on her sales. P received first
step in Sept. But by then had qualified for
third step (more money). D said he would pay
out above first step in March of next year. P
got new job in Jan. D refused to pay bonus
owed P.
2. Rule: If offeror makes offer accepted by
performance of offeree, offeror is bound when
offeree renders “substantial part” of requested
performance.
 3. Analysis: performance supplies consideration
in unilaterals. Contract is then enforceable to
extent performed.
4. Held: D breached.
5. Remedy: P owed about $17k but received $24
due to interest accrual.
6. D argued P didn’t accept offer and I can
revoke.
ii. Sateriale v RJ Reynolds Tobacco (Camel)
1. Facts: Ps purchased Camel cigs and saved C-
Note reward program certificates for
redemption of awards. Camel told customers
it would end program in 6 months. Ps say
Camel did not make catalogs for awards
available, so Ps couldn’t redeem their C-
Notes.
2. Consumers performed by buying cigs and
getting C-Notes.
3. Rule: “If a statement, properly interpreted,
calls for the performance of or
commencement of performance of specific
acts, action in accordance with such an
interpretation will close a contract and make
the offer irrevocable.”
4. If offeror reserves unrestricted right to
terminate at any time, not legally effective
offer: “I will if I want to.”
 5. Terms are reasonably certain to determine
breach
6. Remedy can be determined based on
comparing past merch awarded or monetary
values of C-Notes.
7. Conclusion: P’s adequately allege C-Notes
constitute offer of unilateral agreement.
8. This was a class action:
a. Rationale: lower costs for Ps by joining
together. Lawyers want more plaintiffs
for higher payout.
b. Common clause in “I agree” online
contract is that you won’t file class
action.

IX. UCC
a. Uniform Commercial Code
b.Section 2 is what we’re exclusively concerned with in
this course: Section 2: Sales of goods.
c. designed to modernize biz transactions and the law. If
it looks like a contract, you have one.
d.Mirror image across docs not practical so not necessary
for contract.
i. Can we find contract, if we can show objectively
that parties manifest mutual assent to be bound to
one another
e. Formation
 i. Contract for sale of goods may be made in any
manner sufficient to show agreement, including
conduct by both parties which recognizes the
existence of such a contract
ii. An agreement sufficient to constitute a contract for
sale may be found even though the moment of its
making is undetermined
iii. Even though one or more terms are left open, a
contract for sale does not fail for indefiniteness if
the parties have intended to make a contract and
there is a reasonably certain basis for giving an
appropriate remedy.
f. This is far more lenient than common law, which says
if parties use different terms, there’s not meeting of
minds. In food truck case, UCC says that’s baloney
they took the truck.
g. Cases
i. Brown v. Hercules (NOT converting acceptance to
counteroffer
1. Facts: Brown sold Hercules a press. First,
Hercules asked Brown for price quote. Brown
sent original proposal with terms, with one
paragraph about liability: purchaser agrees to
pay all sums which Brown becomes legally
obligated to pay due to bodily injury or
property damage resulting from use or misuse
of the press (indemnity clause). Hercules sent
 written purchase order, stating "order limits
acceptance to terms stated here. any additional
terms proposed by seller are rejected unless
agreed to in writing." Purchase order from
Hercules contained no indemnity provision.
Miller hurt, Brown ordered Hercules to defend
against Miller suit (under indemnity clause).
Hercules refused. Brown sues Hercules.
2. Issue: Was Brown's first proposal an offer or
just a price quotation? Did Hercules assent to
Brown's conditional acceptance term (the
indemnification provision)?
3. Held: Brown's initial price quotation was not
an offer. Hercules then sent purchase order
expressly limiting acceptance to terms 'stated
herein.' So Hercules never accepted indemnity
provision. Brown, in its acknowledgement of
Hercules offer (Order Acknowledgement),
issued a conditional acceptance, not a
counteroffer.
4. Rule: generally price quotations aren’t offers
and
UCC 2-207 rule on converting acceptance to
counteroffer (not present in this case):
5. Why isn’t price quote an offer? Court points
out price quote itself said this will not be
agreement until we send order
acknowledgement.
6. UCC 2-207: If you vary terms part of original
contract, not a counteroffer, unless offer
expressly limits acceptance to original terms,
they materially alter it or notification of
objection given or given within reasonable
amount of time.
7. Common law last shot doctrine, Brown would
have won because sent last doc.
X. Modern contracting (shrinkwrap, clickwrap,
clickthrough, browsewrap)
a. Shrinkwrap: purchaser orders a product by telephone
or internet, receives box with warning (sometimes) that
says package contains seller’s contract and purchaser’s
use of product constitutes agreement with those terms.
i. also referred to as rolling contracts, layered
contracts or money now, terms later contracts.
b.Clickwrap: purchaser clicks button labeled “I agree”
after scrolling through seller’s terms. (software,
services, or goods)
c. Browsewrap: terms of contract posted on provider’s
website. Terms state by using the website, user agrees
to provider’s terms of use. User not required to scroll
through terms of use, not required to click agreement
button.
d.Cases
i. DeFontes v. Dell (Shrinkwrap)
1. Facts: DeFontes purchased a computer
through a catalog and it was shipped to home.
The shipping included a contract (shrinkwrap)
that had a arbitration clause.
2. Held: Explicit disclaimer in shrinkwrap
agreement advising consumer of right to reject
terms was absent in the Dell terms. DeFontes
wins.
3. Rule: Contract formation occurs when
consumer accepts the full terms after receiving
a reasonable opportunity to refuse them, NOT
after buyer orders product and seller accepts
payment and ships or promises to ship.
('layered contracting')
4. UCC §2-204: contracts for sale of goods may
be formed 'in any manner sufficient to show
agreement, including conduct by both parties
which recognizes the existence of such a
contract.'
5. Modern trend places power of acceptance in
hands of buyer after receiving goods
containing standard form statement of
additional terms, provided buyer retain power
to accept or return
6. Scholars disagree: Should vendor or buyer be
offeror?
a. Easterbrook argues it’s the vendor. This
court says it would be tedious to read
terms of contract over phone to buyer.
b. Criticism of Easterbrook: why isn’t
purchaser offeror, especially when natural
understanding of transaction is that
purchaser is offering to buy product,
vendor accepts by charging and shipping.
Supported by UCC §2-206. Murray says
rolling theory is systematically incapable
 of providing reasonable clear and
effective guidelines and fails to alert
buyer to expect later terms.
c. Kloceck v. Gateway leading case rejecting
Easterbrook, holding purchaser, not
vendor, makes offer. Cites Hercules in
support of reasoning that in typical
consumer transactions, purchaser is
offeror. (Brown: price quote can be offer
if it reasonably appears the assent to
quote all that is needed to ripen into
contract)
d. What if someone added a term in
shrinkwrap that said you owe me $10k,
and only way to reject is to return
product. That’s unreasonable.
e. Counterargument: buyers get to inspect
product under shrinkwrap and can return
if unsatisfied.
ii. Long v. Provide Commerce (ProFlowers.com)
(Browsewrap)
1. Facts: P bought flowers that appeared
assembled on website but can unassembled.
Terms on website had arbitration clause, but
Terms were available via hyperlink at bottom
of webpage
 a. This court says hyperlinks by Provide
hard to find even when looking for them.
Could blend in with background (green
on green). "Terms of use" hyperlink may
not be clear enough to make user click
link. Nguyen: "onus must be on website
owners to put users on notice of terms
they wish to bind customers under."
2. Issue: Did design of site and order email make
the link to Terms conspicuous enough to put
consumer on ‘notice’ of their existence?
3. Held: Link not conspicuous enough to bind P
to terms.
4. Rule: Nguyen, Ninth Circuit, hyperlink to
Terms was visible without scrolling, but even
so court concluded plaintiff act of placing
order didn't constitute unambiguous
manifestation of assent, holding
"conspicuousness of link alone not enough to
give rise to constructive notice." Nguyen
explained something more needed for notice:
explicit textual notice warning users to review
terms, or admonishing that by making
purchase, you agree to Terms and conditions.
a. Bright-line rule from Nguyen: in
determining validity of browsewrap
agreement: conspicuous link to Terms on
every page but otherwise provides no
 notice to users nor prompts them to take
any affirmative action to demonstrate
assent, even close proximity of Terms
link to relevant buttons, without more, is
insufficient to give rise to constructive
notice
5. Tomain not happy with this outcome: There's
no end to litigation in these cases if every
court goes through this minute scrutiny of
what appears on a screen. These issues are
tricky because we’re in a new tech era and
solutions are elusive.

XI. Parol evidence rule

a. Definition
 i. Governs what kinds of evidence parties to a
contract dispute can introduce when trying to
determine the specific terms of a contract. One
may not use evidence made prior to the written
contract to contradict the writing.
XII. Promissory estoppel
a. Definition
i. Refers to the doctrine that a party may recover on
the basis of a promise made when the party's
reliance on that promise was reasonable, and the
party attempting to recover detrimentally relied on
the promise.
ii. Legal principle that a promise is enforceable by
law even if made without formal consideration
when a promisor has made a promise to a
promisee who then relies on that promise to his
subsequent detriment.
iii. Estoppel: the principle which precludes a person
from asserting something contrary to what is
implied by a previous action or statement of that
person or by a previous pertinent judicial
determination.
b.Synonymous with detrimental reliance.
c. Restatement First §90 (substitutes for consideration):
i. A promise which the promisor should reasonably
expect to induce action or forbearance of a definite
and substantial character on part of promisee and
 which does induce such action is binding if
injustice can be avoided only by enforcement of
promise.
ii. Reasonable test for reliance
1. reasonable to rely on promise and
2. whether manner and degree of reliance was
reasonable
iii. Second Restatement preserved this definition of
promissory estoppel with only slight modification.
iv. Section 90 creates something equivalent to real
contract and involves expanding notion of
consideration.
v. Rather than consideration, contract formation
satisfied by detrimental reliance under this section.
vi. Suing based on detrimental reliance: reasonable
basis and injury needed.
vii. Dual function: substitute for consideration or
independent cause of action. Remedies for each
may be different.
d.Four elements:
i. promise is clear and unambiguous.
ii. reliance by party to whom promise is made.
iii. reliance must be reasonable and foreseeable.
iv. party asserting estoppel must be injured by
reliance
e. Can be used to solve family disputes.
f. Remedy: what ‘justice requires’
g. Some call for injustice element of Promissory Estoppel
playing a larger role:

h.Cases
i. Kirskey v. Kirskey
1. Facts: P had several children and resided on
public land, was comfortably settled and
would have attempted to secure the land she
lived on. But D who lived 60-70 miles away,
wrote after Antillico's husband died that "If
you will come down and seem me, I will let
you have a place to raise your family, and I
have more open land than I can tend...on
account of your situation and your family." P
abandoned her possession, without disposing,
and moved her family to Ds residence. D gave
her comfy residence and gave her land to
cultivate for 2 years, but then he moved her to
 shitty woods house, and after that required to
leave even that house.
a. Assumpsit: an action to recover damages
for breach of a contract.
2. Held: Majority thinks promise was a mere
gratuity, and action will not lie for its breach
3. Authoring judge thought there was a contract.
In his letter, D writes he has more open land
than he can tend, and P when she was in nice
house cultivated that land. Could argue D
received that benefit, but also P suffered
detriment by leaving land she would have
tried to secure if she'd stayed.
4. Sexism may be one explanation of the
different results in Hamer v Sidway and
Kirksey v Kirksey (man got judgement,
woman didn’t).
ii. Harvey v. Dow (Implied promise triggering
promissory estoppel)
1. Facts: Harvey is child of Ds. Ds own 125
acres. Parents say they made vague,
indeterminate promises to Harvey of
conveying land to her. Harvey's husband dies
and she gets life insurance claim and uses that
to build house. After moving into house,
Harvey asked Sr. for deed to obtain mortgage
for other projects. Sr. declined (relationship
 had soured) said they’d never promised her
the land.
2. Issue: Is an implied promise present that
would trigger promissory estoppel? If yes, did
donee make substantial improvements to land
in reliance on Sr.'s promise (implied) to
convey the land
3. P wins
4. Held: Sr.'s promise to convey land was
implied because of his actions (agreed to
location for Harvey to build house, obtained
building permit and built large portion of
house), and those actions were manifestation
of his intention to act certain way and
justifying promisee believing promise had
been made. In context of promissory estoppel
in transfer of land, making substantial
improvements and then denying transfer of
land would be unjust and inequitable
5. Rule: Promisor's acquiescence, support, and
encouragement can serve to support an
implied promise against a backdrop of a
general promise. When person makes
substantial improvement to land in reliance of
promise, courts enforce the promise to convey
land.
6. Section 90 of Restatement (doesn’t use
promissory estoppel term): promises to make
 a gift: such a promise is enforced ordinarily by
virtue of promisee's reliance only if conduct is
foreseeable and reasonable and involves a
definite and substantial change of position
which would not have occurred without
promise.
a. Conduct can replace express promise.

iii. Katz v Danny Dare Inc. (Reliance doesn’t always

have to be spent money, can be job related:
position change or effort)
1. Facts: Katz worked for 25 years with Danny
Dare, holding high positions such as VP. But
Katz was struck on head in robbery and his
work performance declined afterward. Dare
tried to persuade Katz to retire, and the two
negotiated a pension for 13 months. Finally
Katz agreed to pension of $13k for life. Dare
board of directors passed resolution saying D
will pay Katz $13k "so long as he shall live."
But about 3 years later the payments
decreased by half and then stopped. D
contended Katz's health had improved so he
could work again, didn't need pension. Katz
said he couldn't work full time due to age
(70).
2. Issue: Are elements of promissory estoppel
present?
 3. Promissory estoppel is applicable because all
elements are met:
a. promise of a pension to Katz.
b. his detrimental reliance on that promise,
and
c. injustice can only be avoided by
enforcing promise.
4. Reasoning: Katz retired (after months of
negotiating) as a result of promise of pension
and to his detriment of lost earnings by
leaving full time work. Injustice can't be
avoided because Katz now can't engage in F-T
work at 70 years old
5. This case similar to Plowman, but there
employer won. Not that courts came out
differently on same sets of facts, but in Katz,
he retired based on promise of pension.
Tomain emphasis: effectively they bargained
that I don't want to fire him and gave up that
right to fire. It was reliance on pension that
converts this to §90 case. Not strongest case in
world, but example of someone incurring
detriment (retirement).
iv. Aceves v. US Bank
1. Facts: Aceves, P, obtained house loan. Loan
evidence by a note secured by a deed of trust
on Aceve's residence. US Bank eventually
takes control of loan. In ‘08, Aceves couldn't
 afford payments. US Bank, through substitute
trustee Quality Loan Service, entered "sell
under deed of trust" action that would lead to
foreclosure and Aceves losing home. But she
filed for bankruptcy to halt foreclosure. US
Bank told her once loan was out of
bankruptcy, it would "work with her on a
mortgage reinstatement and loan
modification." In reliance on US Bank's
promise, Aceves allowed bankruptcy stay on
foreclosure to be lifted. US Bank nonetheless
scheduled the home for public auction.
Aceves attorney argues she could have saved
house through bankruptcy but due to promise
by the bank, they didn't go that route to save
house.
2. Issue: Did Aceves state a claim for promissory
estoppel and more specifically: does claim
meet all four elements: 1) promise is clear and
unambiguous. 2) reliance by party to whom
promise is made. 3) reliance must be
reasonable and foreseeable. 4) party asserting
estoppel must be injured by reliance.
3. Held (these track with elements above):
a. US Bank's statement that it would work
with Aceves on mortgage reinstatement
and loan modifiction was clear and
unambiguous.
 b. Aceves relied on that promise by
declining to convert her bankruptcy
proceeding from chap. 7 to 13 and by not
relying on her husband's financial
assistance and not opposing the motion to
lift bankruptcy stay.
c. Aceves reasonably relied on US Bank's
promise.
d. Aceves would have lost home if she
didn't rely on US Bank's promise, but
could have saved home under chap. 13
with husband's financial help.
4. Reasoning: modification of loan would have
been more beneficial to Aceves than
bankruptcy outcome. Bankruptcy could not
have modified terms by reducing amount of
regular monthly payments or extending life of
loan.
5. Tomain: this is clear case of promissory
estoppel

i. Charitable subscriptions
i. Many courts have found consideration for
subscriber’s promise, but consensus appears to be
that the analyses are unconvincing and reflect
more a desire to uphold the gift rather than a
genuine finding of a true bargain.
ii. Definition: “an oral or written promise to do
certain acts or to give real or personal property to a
charity or for a charitable purpose.”
iii. Cases
1. King v. Trustees of Boston Univ.
a. Facts: In dispute about true title holder of
certain MLK papers, BU asserted
affirmative defense of charitable pledge
based largely on a letter written by King.
The letter states BU Library is named
King's repository for his papers, King
authorized removal of most of those
papers to BU, he retains them as his legal
property; but he intends each year to sign
over a portion of the papers to absolute
control to BU as an "outright gift," until
all papers are given. And in event of
King's death, all such materials with BU
shall become absolute property of BU.
b. MLK’s wife said letter conveyed a
gratuitous gift only.
c. Issue: Court considers if appropriate to
submit to jury: Did letter set forth a
promise made by MLK to transfer
ownership of papers to BU? 2) Did BU
take action in reliance on that promise OR
was promise supported by consideration.
d. Held: letter could have been read to
contain a promise supported by
consideration/reliance. Two sentences in
letter support he made enforceable
promise:
i. that King intended to transfer all
portions of the papers in installments
until all were BU's property.
ii. If King dies, all materials deposited
become BU's sole property
e. Rule: To establish whether charitable
subscription is enforceable, court must
ascertain the intention of the donor, give
effect to that intent without abandoning
contractual principles (specificity of
donor's promise, consideration,
reasonableness of charity's reliance.
Second, (reliance or consideration by BU)
Actual benefit to promisor or an actual
loss or disadvantage to the promisee will
be sufficient consideration to uphold a
promise made deliberately.
f. Evidence of reliance/consideration by BU
i. indexing of papers
ii. made papers available to researchers
iii. provided trained staff to care for the
papers and assist researchers.
 iv. BU held convocation to
commemorate receipt of papers, in
which King spoke and explained why
he chose BU as repository for his
papers.
g. Restatement Second §90(2): A charitable
subscription or a marriage settlement is
binding under subsection 1) without proof
that the promise induced action or
forbearance.
i. Some courts have considered doing
away entirely with requirement of
either consideration or reliance for
enforcement of charitable
subscriptions.
ii. King rejects §90(2) but doesn’t offer
reasons for not accepting the
Restatement.

XIII. Implied in fact contract

a. Hypo: Imagine I deliver quart of milk to your house

every day. And it costs .25 cents. End of week you
leave envelope for $1.75. (.25 x 7). One week I deliver
for seven days but you don’t leave envelope, I contact
you and say I delivered the milk and you owe me
$1.75. and recipient says we never had a contract. We
 don’t have a writing. But with implied in fact contract,
through our behavior and actions, we have a
contractual relationship. Deliver milk deliver pay.

XIV. Revocability of offer

a. Classical held could always revoke; modern principles
provide limits to free revocation of an offer
i. Statutory limitations on revocation
ii. Option contracts
1. People negotiate for time to keep the offer
open.
iii. Offeree reliance
b.Offerees in Normile thought they had option contract
(but they were wrong because offeror never expressly
promised not to revoke).
c. Cases
i. Berryman v. Kmoch (Option contract?)
1. Facts: Berryman (P) entered into option
agreement with Kmoch regarding nearly 1,000
acres of land in Kansas. The agreement,
signed by Berryman, said "For $10 and other
valuable consideration, I grant unto you
(Kmoch) an option for 120 days to purchase
the real estate." Kmoch didn't pay the $10.
About a month later, Berryman called Kmoch
and asked to be released from option
 agreement. Nothing was worked out and
Berryman sold the land to another person.
Kmoch decided to purchase the land, went to
bank for loan, and was told by a bank rep that
the land had been sold. (Tomain: Before
Kmoch exercises option, he knew land was
sold) Kmoch sent letter to Berryman
attempting to exercise the option on land.
2. Kmoch argument: "other valuable
consideration" in the letter should have
allowed him to enter evidence of spent time
and money in effort to interest others in
joining him to acquire land. Also argues for
promissory estoppel as substitute for
consideration.
3. Kmoch loses
4. Rules: Option contract not supported by
consideration is a mere offer to sell and may
be withdrawn at any time prior to acceptance
a. When option is conditioned on
performance, you may have
consideration, but not when there is no
intended benefit nor performance
incurred on behalf of optionor (in this
case Berryman).
b. If offeror makes offer and then sells to
another, and offeree acquires reliable
 information of that sale before accepting,
the offer is revoked.
5. Reasoning: Acts urged by Kmoch as
consideration gave no benefit to Berryman.
The option agreement had nothing to do with
producing a buyer for Berryman other than
Kmoch. Kmoch spent time enlisting other
buyers/investors. That’s not consideration
paid for the option agreement.
6. Court says Berryman expected Kmoch to
expend time and money to find buyer is
irrelevant because Kmoch was not bound to
do so. So that reliance was not reasonable. Is
that right? Even though he didn't have to,
Kmoch did make steps to sell land. Tomain:
do you know what real estate agents do? they
try to find buyers. Court goes no, Berryman
knew they were gonna have to do something,
but in court's mind Kmoch didn't have to do
anything and so weren't bound. Tomain thinks
reasonable to assume real estate agent woulda
relied on document. Counterargument: the real
estate agent coulda protected himself by
paying $10.
XV. Remedies
a. For breach of contract
i. Conventional approach is to protect P’s
‘expectation interest.’ Net value that P expected to
realize from performance of contract.
ii. Typically involves computing price tag on D’s
performance, but also withholding any savings P
might have realized from withholding her
performance.
b.Restitution or reliance interests
i. Extent D has been enriched, or P injured, based on
P’s reliance on D’s commitment to perform.
XVI. Problems from book
a. 2-2 (page 104)
Not going to have agreement till I get contract back from
you.
Go to CEO of Super Comics. What alternatives vis a vis
JayRan exist at this point?
Options with JayRan: a) a contract. B) no contract bc
there is formal contract contemplated. C) go back to
JayRan and renegotiate. But that’s risky, JayRan may say
we already have a deal. D) turn down octopus.
Could lose them both.
Point of hypo: you can generate series of options and you
as lawyer have to figure out best option.
Could you say letter sent was just contract to negotiate,
and you can delay those negotiations.
Tomain: take one more step, if you conclude it takes
more negotiations, and you want Octopus, what do you
tell JayRan.
Say to JayRan: we’re ending negotiations. Tomain says
that doesn’t end problem bc JayRan can sue.
Most likely outcome: enter contract to Octopus and write
check to JayRan for their inconvenience, or say to
Octopus: next time.
Solution to problem 2: what steps could counsel with
super comics taken to protect them better: coulda been
stronger in saying we don’t have contract and we reserve
right to cancel.

b.
i. Tomain: is there a contract by B submitting a
proposal? No RFP is an advertisement: I want
you to make the offer. I think it’s request for
unilateral contract –Tomain If Foundation
accepts proposal, what is the exchange? Is there
consideration? Answer, tomain says, is we’ve
 accepted $15k proposal. Like saying I promise to
give you $15k if you fulfill terms of proposal.
There is bargained for exchange. Changes request
from unilateral contract , to once bid selected, I
proimse to pay you $15k if you fulfill proposal.
Consideration is exchange for value, you doing
work and us giving you $15k.
c. Hypos on what consists of bargained for consideration:
[page 97 of first half mega outline]

XVII. Practical considerations

a. When you exchange promises you’re really exchanging
expectations for things to be done in the future. Words
alone are binding.
b.UCC 2-207 (Hercules) tries to say if you behave like
you have contract, you have one. You can’t screw each
other. If you add material term, you can’t try to hide it.
c. Much negotiating in biz transactions involve forms
with fill in the blanks. Cheaper.
d.When reading cases, follow the documents.
XVIII.Policy
a. Policy: if power acceptance by offeree continued
forever or even prolonged, seller would be beholden to
offeree and unable to sell until power of accept.
expired.
 b.Shrinkwrap criticism: Some argue that because
contract law based on mutual consent, claiming
purchaser who receives product and only thereafter is
informed of terms has ‘consented’ to those terms
simply by failing to return stretches concept of consent
to breaking point
XIX. Procedural rules
a. Demurrer: A defense asserting that even if all the
factual allegations in a complaint are true, they are
insufficient to establish a valid cause of action
b.When Kmoch entered the option contract publicly, it
puts lien on home, Tomain says. So when Berryman
sells land, he wants to sell with clear title, but with lien
on home it's not clear title, and third party Berryman
sells the land to could contest sell on that ground.

Questions

What exactly is mutuality of obligation? Or is it just called

mutuality?

$10 and other good and valuable consideration is adequate

because shows you took effort and intended to enter agreement.
It’s formalizes agreement much like a seal once did.
 But contrast with Restatement which seems to reject
nominal consideration.
Which is correct?