Contract Outline

CONTENT
Proverbs, Definitions
Coolidge, Bargain
Neo Classical Economics, Reliance
Restitution, Objective Theory
Misunderstanding
Offer & Acceptance, Justice Tongues 4 Factors in Offer
Acceptance Mailbox Rule
Revocation, Irrevocable Offers
Indefiniteness, Jurisprudence
Consideration
Pre-Existing Duty Rule
Illusory Promises
Nominal Consideration, Disfavored Terms
Reasonable Reliance
Franchising
Dayton Malleable, Expected and Reasonable Reliance
Promises Made in Recognition of Past Benefits
Brief Review, Codified Rules
Page
1
3
4
5
6
7
8
9
10
12
13
14
15
16
17
19
20
21
Afrikan Proverbs
Struggle to farm, gifts cannot sustain your needs.
I pointed out to you the moon and the stars and all you saw was the tip of my
finger.
No one may be an elder before being a child.
One who bathes willingly in cold water does not feel the cold.
Wisdom is like a baobab tree - no one person may embrace it alone.
Water that has been begged for does not quench the thirst.
The teeth are smiling, but is the heart?
The small spotted cat mistook the leopard for a relative.
Unless you know the road youve come down, you cannot know where youre
going.
One who has not traveled widely thinks his mother is the only (and best) cook.
No matter how long wood floats in water, it will never become a crocodile.
Definitions
Laws - Laws are theoretical expressions describing methods by which those in
power within a particular society can bring their own sense of morality to bear on
those whose behavior comes into conflict with that moral sense.
laws function to synthesize ideas from the past with understanding from
the present to effect a
balance in power facilitating the resolution of disputes and provision of
safety within the
status quo.
Voluntary Choice exists in situations where a society provides a diversity of
options to its members and those who trade with its members on a relatively
equitable basis. Without equity, the choice must be considered to be less than
voluntary.
Overlooked by K - Those not parties to the K itself but affected by it. Those
disempowered and mislead to believe that a K is equitable where parties have
equal choice (as equal choice can't exist where power is unequal).
Ks I UDC-DCSL Prof. Samuel Jefferson. Fall 2007
Text: Contracting Law by Kastley, Post & [Hom / Ota] [3rd / 4th edition]
outline by Nick Clark
CONTRACT
RESTATEMENT 1: Promise where breach remediable by law OR
performance of which
law recognizes as duty.
PJ: Meeting of the Minds
JUSTICE
Justice is whatever the judge says it is see Coolidge
Equal empowerment maintains power disparity
gives dominant group opportunity to deride disempowered group
disempowered require unequal justice.
Where regulation of power is justice, who is regulating?
MARKET: The idea of choice as it is sold to us; the point at which exchange
occurs; The opportunity for buying and selling goods or services. Situations by which
the scope of one's power determines the range of one's choices. RISK is inherent
in a market and in any exchange.

Money or another manifestation of one's relative power within a society
enables one to
choose from a certain set of options whereby one may define his or her
life.
Exchange holds implicit RISK of being taken advantage of.
A way for society to allocate RISK

Free Market -> ability to choose K and dictate terms.
Price and value the ONLY considerations
Free Market essential to free society & vice-versa
if FM impossible, is individual freedom possible?
Do others acquire a benefit from being allowed to enter a market without
being taxed?
If so, is this a form of unjust enrichment?
Should this prevent someones entry?
some dont realize they believe they have nothing to
contribute.
POWER The relative ability to influence people and dictate the range of choices
which determine the character of the people in one's society. The ability to get
what you want; a position to manifest and manipulate; possession of a controlling
influence stemming from possession (in some form) of a RESOURCE or resources
denied to society at large.
Power => LEGALITY.
Resources.
Both ABILITY & STATE OF BEING (e.g. being alive is a kind of power)
KNOWLEDGE is necessary but not sufficient to achieve power.
TYPOLOGY OF POWER (power & exercise thereof not inherently bad or
good)
Types progressively less obvious, more difficult to resist, less effort
to exert.
Force: Power by physical manipulation
Coercion: Power by threat of force
`
credential
Influence: Power by fear without explicit threat

Competent and Legitimate Authority: Power by reaction to
Manipulation: Power subtly applied subject does not
recognize.
COMMON LAW: Codified in the Restatement of Contracts. Typically governs
transactions in realty or services, unless statute imposes an exception.
UCC Formed by the American Law Institute and the National Conference of
Commissioners for Uniform State Laws: Karl Llewellyn: Vicious heritage of
regularly viewing parties to a K as single individuals (outside of cultural context)
Contributions to the K those who create and contribute to the conditions which
yield the K and its particular terms but are not themselves parties.
Article 2 governs ALL SALES of GOODS
Goods are moveable, not real property. Goods include animals.
Consideration that is valid under Common Law is also valid under the UCC.
UCC or COMMON LAW?
Where any of the items transacted are non-goods, CL should govern, but:
TESTS
MAJ: Ps PREDOMINANT PURPOSE in entering K: goods / non-goods?
Determines set of laws applicable to entire K.
MIN: GRAVAMEN of ACTION: Is Ps suit primarily over goods / nongoods?
Determines set of laws applicable to this suit ONLY.
Personal property transferred WITH real property CAN be goods under UCC
2-105.
Use appropriate test above.
UNCCISG 67 nations, governs transactions of GOODS between residents of
ratifying nations (contracting states) in international trade when both parties
know the other is a member of a contracting state, and
exchange is not for goods intended for personal / family / household use.
unless seller has no reason to know goods so intended
CISG regards as goods moveable property yet to be constructed.
CISG contains no provision to look beyond parties to customers to
determine proxy.
CISG uses LAST SHOT RULE, not mirror image rule.
Where offeror doesnt object to new terms, they govern.
UETA: All parties agree to transact electronically
electronically=by means creating electronic record (e.g. fax, email, etc.)
NOT telephone, unless a recording of conversation is made.
Jury as finder of fact=community involvement in interpreting socially relevant
nature of reality. Social reality fills necessary gaps in narrative to come nearer to
objective truth.
-----------------------------------------------------------------------------------------------------------H.J. Coolidge v. Puaaiki and Kea 11
Private ownership system in Hawaii meant European ownership.
Markets:
Labor,
Pineapples
sugar.
Few cases against plantation owners despite conditions.
No effort to inform workers of rights,
no attempt to assert enforcement of employment Ks against
plantation owners.
Workers had no means to hire lawyers.
Courts rarely acknowledged counterclaims against plantation
owners.
System lasted until 1940.
This case saw K claims of this sort moved from criminal to civil
court
still enforceable by criminal penalties.
Civil suit assumes workers able to negotiate details of their K
Ks terms are indefinite:
Mrs. C. can be an appropriate agent?
Mr. C. subject to penalties of K though absent?
K appeared differently in translation
Hawaiian version mentioned farming,
English mentioned general labor.
Laborers controlled in part by notion that without jobs they had nothing
Supposition of equality of choice in employment Ks permits inequality of power.
Notion that labor can be sold a buried cultural prejudice.
B. Three Principles of Contract Law
1. The Bargain Principle - Agreements create mutual obligations. deal
is a deal
Controversy:
coercion, duress, or inequality of power and resources (rare
or prev.?)
nature and significance of individual action and interpersonal
obligation.
Why are PROMISES more obligatory when expressed as DEALS?
Both sides committed, get something out of it
reliance on deal, make sacrifices in anticipation of arranged
outcome
some make a living on deals
`
commerce crucial to economy. where unreliable would
collapse
freedom to exchange (nonexistent) essential to individual
freedom.
Kirksey v. Kirksey
Offer to let sister-in-law stay on land a mere gratuity,
not enforceable w/o exchange.
act of moving insufficient Cons (natural consequence of
willing relocation?)
O. Henry (William Sydney Porter), The Gift of the Magi
Both experienced forbearance in order to secure gifts: bargained for
exchange.
Gifts given to one another are gratuities.

John Elemans, The Gift Economy
Japanese economy - Desire to bestow gift of flawless labor upon
employer a
market economy informed by different values: less distinction
between market / nonmarket exchanges. US scrutinize gifts within business / hiring
transactions as
potentially distorting objectivity.
Distinction between MARKET / NON-MARKET transactions is
culturally
specific.
Neo-Classical Economics and Contract Law
Assumptions
People act in their own interests
In the pursuit of self interest, people act rationally
People have access to knowledge necessary for rational
action
People and resources are freely moveable
No restrictions bar entry to / exit from the market.
The current distribution of wealth and resources is taken as a
given
NCE creates values of:
Rational actions in self interest yields a net good for society
current dist. of edu, econ resources must represent perfect
information.
People as objects: freedom of movement disregards social
need to remain.
Competition & results; free exit / entry essential to
competition.
Current allocation fair, equitable OR no fair, eq way to
reallocate possible.
2. Reliance:
Elements:
Promise.
Reasonably foreseeable reliance on that promise
Demonstrable loss on the basis of that dependence.
Trust, Responsibility, Injury
RELIANCE: CORRECTIVE / RESTORATIVE; BARGAIN: DISTRIBUTIVE
People rely on one another indicates TRUST
Trust at social, personal levels present in most human
endeavors.
Concern, both soc., pers. trust waning in US
Where no trust, reliance on others a burden
Reliance only where no alternative
those without power, resources to
not rely.
Imposing needs on others not admirable.
Dont rely when no-one accepts burden
of reliance
REASONABLE reliance to be valued, rewarded
Promissory Estoppel = most direct legal expression of RELIANCE

principle.
Laurie Kuribayashi, Freeway Poem
Reliance is necessary ties us to society, where we attempt to
isolate ourselves.
Reliance can cause anxiety uncertainty; necessity of FAITH
Difficulty of trusting while asserting self against dependency.
Shared notion of REASONABLE RELIANCE
Andrew Ricketts v. Katie Scothorn
Grandfathers promise caused her to forgo employment
disadvantage.
Estoppel
where one says I will, estopp him from saying I wont
applies in situations where RELIANCE foreseeable
RESTATEMENT 90: Your promise REASONABLY
induces
action of forbearance, and does, promise binding IF
injustice can
ONLY be avoided by enforcement of the promise.
3. Restitution: Unjust Enrichment and the Duty to Right Other Wrongs
Restores you to where you WERE, not where you WOULD BE.
Elements:
Benefit Conferred
Retained
Conferred w/ expectation of compensation.
DUTY to repair your wrongs. liability apart from specific agreement /
market exchange
Unjust Enrichment
Constructive trust
Replevin
conversion
Reconciles BARGAIN and RELIANCE: parties would have created a K if
they could have
Alasdair MacIntyre, A Disquieting Suggestion
Post-science society as metaphor for our POST-MORAL society.
Morality as poorly reconstructed informs RESTITUTION principles.
Executor of the Estate of Enoch F. Sceva v. Fanny True 46
Circumstances impute a meeting of the minds where no explicit
agreement occurs.
But, not without capacity to form K.
Howard E. Bailey v. Richard E. West
RESTATEMENT of RESTITUTION 2: Officiousness is not actionable as
duty.
Enid Bagnold, National Velvet 56
A horse is in this book, and Contracting Law too!?!
Lyle Dews v. Halliburton Industries, Inc. 59
Dews unjustly enriched by actions of K-ing companies, failure of K
with Massey.
Law imputes Quasi K: legal fiction for unjust enrichment.
Chapter Two Contract Formation
The Objective Theory of Interpretation
Governs FORMATION, INTERPRETATION, PERFORMANCE
Gives Weight to Informal Agreements

Dont need contract agreement promise
Objective theory advantages and criticisms
Easy to evaluate evidence without need to determine subjective frame of reference.
Objective theory rewards conformity of words and actions to the norm.
Punishes those who do not fit the norm.
suggestion: incorporate Reliance: eg, where one relies on communication,
enforce using the test of a reasonable person.
negotiations.
subjugators.
view
Objective.
Variations of the Reasonable Person:

Universal observer Brooks
allows evidence only from express conduct, words.
Positioned observer Embry
allows words, actions, history & circumstances of communication
Socially Situated 1330
allows words, acts, history, circumstances, practices within the
parties trades / communities and experiences in
Favored by 3rd world nations, esp w/
Criticized as inviting lampooning of others points of
Why stereotype? Attempt to combat bias w/in
Reminds cts difference important, Obj reaffirms

prejudices.
Assumes that an objective standard exists or ought to exist
Determining Relevance of words and conduct to reasonableness of K;
Common industry practices
Nature of relationship between parties.
Charles R. Embry v. Hargadine, McKittrick Dry Goods Company
Intent only determined on what is REASONABLY evident from words and actions.
Unreasonable to see Ds answer to Ps query as other than assent to employ.
Smith v Hughes: K based on conduct, not internal intent.
Arthur Miller, The Death of a Salesman 68
Culture of the industry / workplace
Failure of communication, subjectivity
United Steelworkers of America, Local 1330 v. United States Steel
70
If clearly implied plants will remain open if profitable.
Reasonable worker could only understand hard work MIGHT save plants.
WARN act results from this case and others similar.
WARN prescribes warning periods before plant closures, other protections.
rarely enforced workers ignorance of closures benefits corp
Sue Doro, Blue Collar Goodbyes 74
Social environment informing layoffs.
Mary Lou Brooks v. Terry V. Steffes, Personal Representative
Contracts are implied in fact where a reasonable person would expect compensation
Steffes expressed desire to pay Brooks
Not unreasonable for member of the household to expect payment for services.
Patricia Williams, Alchemical Notes: Reconstructing Ideals from
Deconstructed Rights
Significant similarities in words and actions.
7
Significant differences in backgrounds and NEED for particular

mode of expression.
Bridging such gaps requires listening at a very deep level to
the uncensored
voices of others.
Necessity of subjective information to effective objective
test.
Subjectivity
Objectivity is dominant culture subjectivity.
K where Meeting of the Minds both parties understand terms as
same principles.
Test: ask What did you think?
2. An Alternative Theory of Interpretation: The Doctrine of
Misunderstanding 91
Requires attention to parties actual meaning REASONABLE person would find both
interpretations equally valid.
Governs FORMATION, maybe interpretation, not performance
Restatement (Second) 20. EFFECT OF MISUNDERSTANDING
(1) There is no manifestation of mutual assent to an exchange if the parties attach
materially different meanings to their manifestations and
(a) neither party knows or has reason to know the meaning attached by
the other; or
(b) each party knows or each party has reason to know the meaning
attached by the other.
(2) The manifestations of the parties are operative in accordance with the
meaning attached to them by one of the parties if
(a) that party does not know of any different meaning attached by the
other, and the other knows the meaning attached by the first party; or
(b) that party has no reason to know of any different meaning attached by
the other, and the other has reason to know the meaning attached by the
first party.
Konic International Corporation v. Spokane Computer Services,
Inc. 92
No K where both parties arrive at equally reasonable interp of term
(56-20).
Peerless: Both parties thought something different, no K
RESTATEMENT 20
Bud Abbott & Lou Costello, Whos on First? 95
Words frequently mean different things to different people. Lou and
Bud have no K.
Herlinda Marie Acedo v. State of Arizona,Department of Public
Welfare 98
Though MISUNDERSTANDING would invalidate K, public policy
trumps.
Holman: Adoption policy centered on benefit to child. Cant recover
once placed.
litigation takes long enough benefit to the child of return
dissolves
social stigma against parents who give up children
Ahmad Izadi v. Machado (Gus) Ford, Inc. 103
Ambiguous print ad treated as offer.
thought
Not what offeror meant, what REASONABLE person would have
RESTATEMENT 20(2)(a) only REASONABLE understanding of doc

enforced.
B. Offer and Acceptance: The Mechanics of Contract Formation 107
OFFER: Manifestation of willingness to enter into exchange conditional on
acceptance.
RESTATEMENT 24 An offer is the manifestation of willingness to enter into a
bargain, so made as to justify another person in understanding that his assent to

that bargain is invited and will conclude it.
ACCEPTANCE: Manifestation of willingness to enter into the exchange as

offered.
Offer and acceptance oversimplify: Karl Llewellyn.
Criticism has led to changes allowing details
Trade Practices
History of relationships b/t parties
functions of relationships
Polarity of acceptance: once acceptance, K exists. Nuances of acceptance
irrelevant.
UCC 2 addresses: 2-204(b): agreement to make K for sale found
w/o knowing time
of sale.
Michael M. Normile and Wawie Kurniawan v.Hazel Elizabeth Miller 108
Offeror is master of offer, can revoke at any time. Normile did not
sign before
another buyer.
J. W. Southworth v. Joseph C. Oliver and Arlene G. Oliver 112
Positioned reasonable peson test to determine presence of an offer.
A communication a reasonable recipient would interpret as an offer
is likely an offer.
Definiteness of wording
surrounding exchanges by parties.
Justice Tongues four factors:
(1) words / conduct reasonably indicating present willingness
to commit
(2) Number of people to whom the communication is
addressed
(3) Detailed regarding the terms of the K.
(4)Community practice / circumstances affecting reasonable
interpretation.
John D.R. Leonard v. Pepsico, Inc. 119
Positioned reasonable person test to determine presence of offer.
RESTATEMENT 29: Ads not offers to sell: invitations to negotiate.
Exceptions:
limitation on # of offerees
Words of commitment.
Lefkowitz v Great Minneapolis: coat ad=offer where explicit,
limited, not negotiable.
Carlill v Carbolic: reward=offer: unilateral K; promise in exchange
for performance
Barnes v Treece: punchboard reward enforceable.
terms.
Newman v Schiff: Call in show offer, but performance didnt meet
James v Turilli: Jesse James alive: reward to prove wrong. Enforced.

Williston 4.7 Offer? How reasonable is belief communication is
intended as offer?
2. The Assent Invited: Acceptance 131
Offer grants offeree POWER OF ACCEPTANCE
Panhandle Eastern Pipe Line Co. v. Nowlin Smith, Jr. 131
Corbin 86: exception to mirror image rule: modification clarifies
implicit point.
Corbin 88: Unreasonable Method Of Acceptance unlikely to be
upheld by court.
The Manner of Acceptance 133
Mirror image rule w/ Implicit Point exception
UCC 2-206: Offer invites acceptance by any means reasonable
under circumstances
Beard Implement Co. v. Krusa 134
As explicit terms indicated purchase order invalid w/o dealer
signature, no K.
Theodore B. Russell v. Texas Co. 138
RESTATEMENT 72(2): exercise of dominion is acceptance.
Continued use of land by Texaco was acceptance of explicit
terms
Silence can be acceptance where
parties agree that silence can be acceptance
past dealings have established practice where silence
is acceptance
Offeree gains / retains benefits of offered K.
Bilateral K: Promise for a promise.
Both sides are Promisors.
Unilateral K: Promise for performance.
Mailbox rule: Restatement 63, 66, 40
Offer effective when received
Acceptance effective when dispatched
Rejection and revocation effective when received
When Offeree sends BOTH acceptance and rejection:
SENT
To
RECEIVED
=/
K
R, A
A,R
=K
R, A
R,A
K
A, R
either
=K
order
;
RISK of mistake in transmission is on offeror:
eg: meant 70 but telegram says
80offer is 80
UNLESS obvious error
eg: meant 10010,
offeree cant
pay 10 if it
clearly should be 100.
10
Jennifer Harms v. Northland Ford Dealers and Moccasin Creek Country

Club 140
Contest is offer for unilateral K - binds offeror to promise when
offeree performs.
Grove v Charbonneau Buick: Golf contest acceptance despite
inconsistency.
WAIVER: volitional relinquishment of existing legal or K right.
ESTOPPEL: words/ acts inconsistent w/ rights leading into
detrimental reliance.
3. The Content of an Acceptance 143
Mirror Image Rule: Acceptance a mirror image of the offer.
addition of implied term makes explicit an otherwise implicit term.
addition grumbles w/o altering enforceable terms.
often not applied, but used as a technicality to escape K if
necessary.
Battle of the Forms: Separate standard forms for offer & acceptance
contain conflicting terms.
If parties agree K has been formed regardless, UCC 2-207
applies.
Conflicting terms replaced with standard language from UCC.
Additional terms are proposals for addition to K.
Terms become part of K -- UNLESS
offer specifically limits acceptance to terms of
offer.
material alteration of the K would result
objection to additional terms given in
reasonable time.
Flender Corporation v. Tippins International, Inc. 144
UCC2-207 applied. Knocked out provision for Vienna arbitration.
Step-Saver Data Systems, Inc. v. Wyse Technology and The Software
Link, Inc. 149
Box-top terms additions would MATERIALLY ALTER K, thus not part
of K.
William S. Klocek v. Gateway, Inc., et al. 158
2-207 invalidate arbitration clause of inside-box agreement.
5 days insufficient time.
4. Revocation of the Offer Prior to Acceptance 164
Master of offer
Offeror can revoke offer at any time, regardless of indicating
otherwise.
1) Rejection / counteroffer
2) Revocation
3) lapse after reasonable or specified time.
4) Death of offeror / offeree
George Dickinson v. John Dodds 164
Offeror free to revoke / K with another despite language of
exclusivity.
State of Washington v. Richard Lee Wheeler 167
Wheeler didnt rely on plea to detriment; can revoke - no prom. estoppel.

No const. right to plea bargain no due process violation
not accepted=not K.
Irrevocable offers
11
1) Option K RESTATEMENT 87
a)Separate consideration in writing for irrevocability
b)Made irrevocable by statute
2) Offer to sell rent goods to be kept open for reasonable or stated time
UCC 2-205
3) Offer requires full performance and performance begun.
RESTATEMENT 45
Offeror cant revoke, but not bound to pay until performance complete
UNLESS: offeror made offeree unable to complete performance.
But, if offeree
1) Has choice to select promise or performance AND
2) Elects to accept by performance AND
3) Has reason to know offeror has no way of knowing performance
begun in reasonable time w/ reasonable certainty:
Then Offerors obligation (firm K) discharged UNLESS:
a) offeree uses Reasonable Diligence to notify
offeror performance has begun OR
b) Offeror otherwise learns of performance w/in
reasonable time OR
c) Offer itself indicates offeree need not notify
offeror when performance begins.
4) Offer forseeably and reasonably relied upon. RESTATEMENT 87(2)
Marchiondo v Scheck (external)
Partial performance on unilateral K is binding conditional on full
performance
Drennan v. Star Paving Company 173
Promissory estoppel held SP to promise - injustice only avoidable by
enforcement
Indefinite Agreements 176
Though technically indefiniteness invalidates K, common law has followed
the UCCs lead.
If K provides sufficient means to determine indefinite term, K. (eg
market rate).
Did parties intend to be bound at time K was formed?
If so, court can supply reasonable term to complete the K.
UNLESS term is too indefinite to reach a reasonable
and just
compromise then no K.
George A. Varney v. Isaac E. Ditmars 177
Fair and reasonable share of profits too indefinite a concept to be
enforced.
Cobble Hill Nursing Home, Inc. v. Henry and Warren Corp. 180
Where no mechanism specified to determine price, indefiniteness
invalidates K.
health dept regulations sufficient to objectively fix
reasonable purchase price
Oglebay Norton Co. v. Armco, Inc. 186
UCC 2-305: where price not settled, reasonable price at time of delivery.
D. A Brief History of Jurisprudence 191
Natural Law: just laws are imminent in nature (discovered, not created,
in course of
resolving conflicts
12
Meaning of law cannot be understood outside of moral principles.

Primary Figures: Socrates; William Blackstone
Approach: Socratic; Catholic Cannon Law
Values: Reason (natural reason)
Positivism: posited laws made in accordance with social values
If a law accords with social norms, it is just regardless of whether it
would broadly
be thought to be so
Laws are rules which provide order, and nothing more.
Jeremy Bentham, John Austin, John Stuart Mill, Oliver Wendell
Holmes
Formalism: (a form of Positivism): The justice of laws a question for
legislature, not judges
Laws are the principles on which societies base generally the
resolution of specific
disputes, after being appropriately narraowed by litigation and
judgment.
Judges shouldnt make moral determinations
apply societys moral authority as set out in laws
Christopher Columbus Langdell
Case method learning law by authority of appellate court
opinions.
Vulnerability of High Formalism
not concerned with whether cases reflected
litigation as a whole;
whether litigation reflected disputes generally;
whether judges/ juries affected by issues other than
legal doctrines;
effects of laws upon society generally.
Legal Realist Movement 1930s-40s.
Law should be understood & determined according to actual
practices in law
offices & police stations (and not from high-Fallutin
treatises).
All law is made by people and is subject to human foibles.
Oliver Wendell Holmes a notable precursor
Harvard Legal Process School
Hart and Sacks
Reaction to Nazism/ other forms of fascism as consequence of
Realism commingled
with formalist positivism.
Rationality restraint, fairness through black letter distribution of
institutional power
Rights to notice, hearing and explanation of courts disposition
Neutral Principles related to Process, but distinct
rests on general, neutral reasons respecting all issues of a
case
Herbert Wechsler: decreased NP & LP credibility by attacking
Warren cts
holdings on race issues.
A more ostensibly palatable formalism w/ equally
unjust results?
13
Analytic Jurisprudence-Debate about nature of law, post-war

What is law?
When are laws valid?
How do laws relate to morality?
Fundamental Rights Jurisprudence
Herbert Wechsler, H.L.A. Harts
human dignity and welfare and the achievement of justice,
principles that to this
school outweigh the values
human dignity and welfare and the achievement of justice,
principles that to this
school outweigh the values
Thomas Grey, Kenneth Karst, Frank Michelman; Michael Perry, David
A.J. Richards,
Laurence Tribe, Ronald Dworkin.

defended Warren Courts interest in individual rights (e.g. to
challenge government,
to free expression, to civil liberties, to be protected from police
aggression) against
charge that such decisions had insufficient support in Constitution.
would deny being natural law advocates, but continue Lon Fullers
attack on
positivism.
After Realist Revolution American law taught within Legal Process
framework
Law and Economics Movement & Legal Choice Theory
60s, 70s. law assessed via economic theory
Favors markets and limited government
Posner: Law to maximize social wealth even if harmful
to some
Public Choice scholarship
microeconomics in govt, politics, social
behavior
Politicians self interested advancing thru
rational
behavior.
Law and Society Movement (Law and [Sociology / Psychology /
Anthropology / etc])
L&S catchall society for other Law Ands
Efforts to utilize learning of scholarly disciplines to shape laws and
definitions
Social sciences used in litigation
To determine facts
To make law
To assess reasonable behavior, true claims, impact of
remedies
to select jurors favorable to cause via psych profile
to seek new venue via research showing prejudice
Critical Legal Studies
System suffers from:
14
indeterminacy of legal doctrine

exclusivity through mystification of law enhances power of
lawyers at
expense of others
doctrine, procedure veil political aspects of law
neutrality as veil to defense of those who dominate.
Feminist Jurisprudence
Objective Viewpoint favored men, promoted version of
reality inaccurate
when applied to women and other out groups
1) Liberal Equality: rights, equality thru application of
liberal values
2) Sexual Difference Model: justice thru recognizing,
emphasizing
significance of sexual differences
3) dominance model: have no agency as result of
dominance
Criticized as further marginalizing,
disempowering
4) postmodern / anti-essentialist: all forms of marginalization
interplay. Every perspective socially situated.
Critical Race Theory
Race is a social construct - Judicial conclusions are the result
of
institutionalized prejudice in the legal system - workings of
power.
Civic Republicanism: Whats best via civic virtue, not by personal
preference altruistic
Postmodernism, Pragmatism, Related Concepts
1) Post Structuralism: linguistic structure affects understanding of
reality and texts.
2) neo-pragmatism: social construction of knowledge / language to
name a thing is
to know it -John Dewey.
A. The Consideration Doctrine 209
A return promise for performance that is bargained for. Promise not
enforceable without
consideration unless based on past benefit, reliance, or some other
alternative means.
Restatement 71(1) a performance/ return promise must be bargained
for.
(2) bargained = sought by promisor for promise, given by promisee for
promise.
(3) Performance may consist of
(a) an act
(b) a forbearance, or
(c) creation, modification, destruction of legal relation.
(4) The performance or return promise may be given to promisor or other
person. May be given by the promisee or by some other person.
Emerging Use of Consideration to Implement Fairness & Other Public

Policies 215
15
Grant Gilmore The Death of Contract

K deeply political, artificial, but potentially useful
traditional K theory said no-one should be liable to anyone ever
lasseiz faire economic theory, e.g.
A system encouraging everyone to do their own thing
encourages the rich &
powerful to become more so.
Fuller: understand Consideration in terms of ends it serves, not in terms of
abstract theory.
Mark Wessman survey: most cases decided on Cons. really used
Cons as excuse to
avoid unfair exchange / implement some policy goal.
Serious risk that courts will use this power deceptively to
benefit some
groups, burden others.
2. A Return Promise or Performance 217
1) any promise / performance adequate (courts wont weigh adequacy)
2) pre-existing duty rule promise to do something already obligated to
is no Cons.
3) Illusory promises sounds like a promise but isnt
4) Mutuality of obligation: widely rejected, esp. by Restatement.
a. Any Promise, Regardless of Value: Courts Wont Weigh Adequacy
of Consideration 217
Freedom of K: individuals free to ascribe own value and exchange freely.
Rule weak,
where one party clearly vulnerable.
Inequality of bargaining power great
K conflicts w/ Public Policy
Unusually One-Sided
Hamer v. Sidway 218
Consideration NOT void where promisor not benefited
Valuable consideration may be some right, interest, profit, benefit
accruing to one
party, or may be forbearance, loss, detriment or responsibility given
suffered or
undertaken by the other party.
NoteConsideration and the Market: Not weighing the adequacy of
consideration shields
courts from having to make decisions on the basis of these market
inequalities.
Privilege: Confidence and entitlement.
Subordination: Unseen and Disbelieved vs. Closely scrutinized
Sociologists, Economists: Life choices, markets predictable
according to Race, Class,
Gender, Ethnicity:
Cost Based Discrimination: Seller assumes buyer will take more
time / resources
for credit issues and service needs.
Revenue Based Discrimination: Seller acts as if buyer willing to
pay higher price
16
services
Poor pay more than rich for comparable goods, housing,
pay more than for

Clothing
Dry Cleaning
Hair Cutting
Cars
People of color pay more than whites
Poverty. Race, Sex bases for exclusion from markets.
Poor Neighborhoods:
Higher insurance
Security Costs
Theft Losses
Lower Labor Costs
Isolation from wider markets
Competition limited
Racial, Class hostility
Discrimination in Credit Industry
Lack of Police Protection
Lack of Information
Inconscionability the exception to refusal to weigh adequacy.
Berry v Gulf Coast Wings, Inc. d/b/a Hooters (external)
Consideration in selling more beer, not leaving Hooters valid, not Pre-Existing.
May otherwise have quit, sold ordinary volume of beer.
Employers consideration was offer of New [Toyota / toy Yoda]
Court enforces clear and definite content of offer based on words, actions, not intent.
Lucy v ZehmerJoking offer as valid as it is believable
Myrna Greenfield, Alternative Trade: Giving Coffee a New Flavor 223
Principles of Alternative Trade:
1) Direct Trade: ATOs buy directly from CoOps or other ATOs.
Producers and
ATOs are equal trading partners. Free sharing of info, help each
other reach goals.
2) Fair Price: ATOs and producers set price by mutual agreement.
Producers meet
costs, make some profit. ATOs able to market products at
competitive prices
(premium for organics).
3) Credit: ATOs attempt to provide credit to producers prepay or
commit to
purchase whenever possible.
4) Democratic Management: Equitable profit sharing within
producer groups.
Workers have voice in how to run. ATOs accountable to staff.
5) Public Information: ATOs inform consumers about producers &
necessity of
alternative trade. Full financial disclosure of corporate records is
standard practice.
Looks for producer partners w/ greatest need, sustainable ag, & w/
established
economic development plan.
b. The Pre-Existing Duty RuleA First Look 226
A promise that one is already obligated to fulfill is not valid consideration.
17
Angela White v. Village of Homewood and Village of Homewood Fire and

Police Commission 227
Where an agreement to be tested for employability contains an
exculpatory agreement
between parties whose power dynamic is significantly one-sided, is that
exculpatory
agreement vald?
1) Not enforceable when against state public policy
a) between employer / employee
b) between public and those charged w/ public service (e.g.
common
carriers, public utilities)
c) disparity in power shows P has no reasonable alternative
2) Something in social relationship btw parties militates against
upholding.
Profile: Engine Company Number Three All-Women Firefighting Crew in
San Diego 230
Jeepers, theyre all women.
c. May Sound Like a Promise, but Isnt: Illusory Promises,Mutuality
of Obligation 232
Restatement 77 Illusory Promises: Words making promissory indications but
reserving alternate optional performance are NOT consideration UNLESS
a) Each alternative would be consideration if bargained for individually
b) one / more alternatives = Cons & substantial certainty non-Cons
options will be
eliminated before choice is made.
Agnes Maszewski v. John Piskadlo 234
Live together in harmony rest of lifetimes, neither shall have right to
dispossess other, but
neither shall be inhibited from leaving of own volition
No valid K where consideration based on Illusory consideration, preexisting duty, no
mutuality.
Dissent: Cons. was not leaving. Terms of K dont have to state nature of
Cons.
K didnt necessitate violation of adultery law - Cunningham v
Weatherford: cant
presume improper intent where 76 y/o paying young $20k for
live in care.
John Prine, Hello in There 237
Loneliness of age: Mazewskis vulnerability to promise as a lonely old lady.
Lawrence v. Ingham County Health Department Family Planning/ PreNatal Clinic 238
Where one partys promise is unenforceable by law (governmental
immunity) can the
agreement, absent mutuality of assent be said to contain valid
consideration?
Mutuality unnecessary except where lack of it would leave one party w/o
valid consideration.
Agreement to follow medical advice not legally enforceable, not valid
cons.
18
Dissent: Adequacy an issue for fact finder should go to court, not be

summarily dismissed.
NoteOn Sovereign Immunity and Public Health Care 244
Traditionally govts waive K immunity.
Paulette Childress White, Getting the Facts of Life 244
Claiming welfare is trying, humiliating, dangerous, imposes inquires into
personal life.
3. The Consideration Must Be Bargained-For 251
Seek w/ return promise/performance not necessarily actual inducement
if sufficient
e.g. Painter sells painting for $500, but actually seeks increased
notoriety.
a. Bargained-For Means Induced By the Return Promise or
Performance and Vice-Versa 252
Kirkseys forbearance not bargained for inducement brother in law sought.
b. A Distinction: Bargained versus Gift with a Condition 252
Two categories, unclearly defined
Langer v. Superior Steel Corporation 252
Is a statement requesting offeree to refrain from activity in order to
continue receiving a
benefit valid consideration?
A K has consideration where an agreement is bargained for in exchange
for a promise,
regardless of whether there is actual loss or detriment to promisee or
benefit to promisor.
York v Cyclops:Consideration may be obligatory on one end and optional
on the other
Langers ability to cease performance would simply mean
Superiors cessation.
Ps loyalty a benefit to D valid Cons
Also WOULD be enforceable under PE detrimental reliance.
Note 255
Restatement 79 Expressly rejects mutuality of obligation. Mutuality no
longer enforced.
c. Dont Tell Me Its Bargained-For!Nominal Consideration Is Not
Sufficient 255
In re Greene 256
No other consideration than $1 cited or shown. Nominal thus not valid.
Seal presumptive,
not evidence.
Notes 258
Restatement 71 comment d: Sham / nominal consideration not
satisfactory.
4. Public Policy and Disfavored Contract Terms 259
Where benefited party is in dominant social position.

Focus on inequality of power more important than it used to be.
Mark Wessman: disfavored terms are more burdensome; require additional /
special consideration
to be enforceable.
Job security terms
covenant not to compete

19
Jerry M. Worley v. Wyoming Bottling Company, Inc.,d/b/a Coca-Cola of

Casper 260
Can an oral promise create a for-cause employment K where previously atwill?
At-Will presumption can be overcome by K implied in fact, or express K.
Interp of terms of oral K a question of Law only when shown w/o conflict in
evidence.
Offer of permanent employment must have addtl Cons or explicit
language termination can
only be for cause
Intent to quit absent job security
mutuality of obligation species of forbidden inquiry into adequacy
violation of personnel policies pretext for termination
Q of fact: cant be decided in summary judgment
NoteOn the At-Will Employment Doctrine 263
Job = access to social status, personal achievement, opportunity, POWER.
Employees in most industrialized nations have job security: only US has
laws disfavoring.
Some exceptions:
High paid executives
12.8% US workers in unions
Protected by Labor Relations Act.
Civil Service Statutes protect Govt workers.
but most US workers no such protections
At-will limited where firing would conflict w/ public policy esp in CA.
Some states promise of employment not binding w/o
consideration
Some states binding regardless of consideration.
Some states enforceable via promissory estoppel
Federal & State Civil Rights Statutes protect specific classes.
Montana Wrongful Discharge from Employment Act requires Cause
for termination.
Puerto Rico requires Good Cause for terminating an employee.
Model Employment Termination Act adopted by National Conference
of
Commissioners on Uniform State Laws
requires good cause
Not adopted by any state.
Arguments against For Cause
a) If you do a good job you wont be terminated anyway,
unless your
employer falls on financial difficulties.
b) employer owns business and can hire / fire how he
pleases.
Robert Fitzpatrick: At Will inconsistent w/ fair treatment of individual
employee (bottom
line). Employers best defense consistent treatment of employees,
termination for Good
Cause.
Peter F Drucker: Jobs as property. Nexus of rights Should not be taken
without due process
right to review / appeal requires abolition of fixed age retirement.
20
employees.
life.
bankruptcy
Japan: Short of bankruptcy, businesses run primarily FOR

right to job precedent over outside creditors, legal owners
Europe: No layoffs: buyouts w/ redundancy payments
can be equivalent of full salary / wage for rest of employees
Claim to redundancy payments survives employers
extends to other assets of employing firm.
US: Pensions have some protections of property.
Take precedence over all but govt tax in bankruptcy.
Up to 30% of firms net worth.
Richard E. Freeman v. The Duluth Clinic, Ltd. 267

Where one signs an employment covenant believing that it will not be
binding unless others
also sign, is it binding when those others do not sign, and are in now way
penalized for their
failure to do so?
Consideration must be bargained for.
AMA discourages restrictive covenants: detrimental to wide provision of
quality healthcare.
No consideration: those not signing were not disadvantaged by their nonforbearance.
Dissent: Mutuality of promises has always been adequate Cons.
To avoid arbitration had to void K, but P upheld K 4 times during
argument.
Chapter 4 Alternatives to Bargain Model: Promises Reasonably Relied
Upon, Promises Made in Recognition of Past Benefit, Other Promises
Enforceable without Consideration 271
A. Promises Reasonably Relied Upon: Restatement (Second), Section 90
271
Promissory Estoppel completely rejected in Virginia
In some jurisdictions, promissory estoppel is only a defense.
New York does not enforce promissory estoppel in employment disputes.
Existence as exception reflects desire to maintain bargain-based model of
K law.
Ricketts v Scothorn
Simpson College v Tuttle: Promissory notes typically enforced when
given as
endowments to colleges and institutions.
Where note promises support of objects referred to, promisor may
still enter want
of consideration defense
If promisee enters into engagements, spends b/c of promise,
suffers loss,
injury if note not paid, donor estopped from arguing want of
consideration.
1) When is it reasonable to rely on promises which are unclear,
ambiguous?
-When broad power disparity leaves you little choice, promisor
unlikely to make
21
statement w/o expecting reliance.

2) When should a promisor reasonably expect a person to rely on his
promise?
-When made definitively; when reliance catastrophic if promise
unfulfilled (above)
1. The Promise 272
Most jurisdictions havent chosen between standards for the promise:
1) must be as definite & committed as for Offer (Bank of Standish)
2) can be less definite than for Offer (e.g. Hoffman v Red Owl)
3) more definite, clear commitment than Offer.(Abbington,)
Vital importance of relationship between farmers and banks
John Steinbeck, The Grapes of Wrath 273
Bank monster machine imposes impossible standards: cant rotate crops,
cant grow on soil
depleted by cotton.
When the monster stops growing, it dies, it cant stay one size.
Being born here, having killed for the land is ownership, more than is a
note in a bank.
Nobody likes the bank or what it does, but they do it all the same.
Change in relationship btw farmers and land as Steinbeck describes
disconnectedness.
Strong sentiment in favor of family farms in rural areas, largely indifferent
in urban.
State Bank of Standish v. Robert N. and Kathleen Curry 278
Where one party assures another theres no reason to worry about your
future in the industry,
I will support you, does this constitute a clear and definite promise on
which reliance would
be reasonable?
1st Natl Bank of Logansport v Logan Mfg. Co. 577 NE2d 949 lender should
expect &
anticipate a promise to lend money would induce a borrower to rely by
making preparations
and ceasing to look for the money elsewhere.
Existence of a promise is a finding of fact
Restatement 2 Promise = manifestation of intention to act or refrain
from acting in a given
way, so as to justify a promise in understanding that a commitment has
been made.
Nature of relationship btw parties, clarity of representation, circumstances
important in
determining whether manifestation rises to level of a promise.
Past dealing in itself is insufficient to establish that renewal will be
indefinite. Offer and
promise judged w/ same strictness.
To be sufficiently clear must include amt of loan, interest rate and method
of repayment.
Currys past dealings had established these.
Dissent: Currys accumulated debt .$160k.
Bank requested acctg form corrections, did not receive.
Currys previous tax return recorded losses of $72k.
NoteOn Farming in the United States 288
22
Btw 1935 and 1992, approx 4.6M farmers lost their farms.
Most family farms lost to other families larger farms.
Minority owned farms declined 91% from 1954 to 1987
$10B / yr direct subsidies to farmers
Indirect subs. include:
crops bought by Comm. Credit Corp: decrease supply,
increase retail price.
low interest non recourse loans-debtor not liable past value
of crop collateral
Dairy buyouts as in instant case.
Total subsidies estimated at around $30B.
Most goes to wealthiest farmers
Vegetables not subsidized.
Subsidies result in over cultivation.
Freedom to farm act ends subsidies in 2003 for all but dairy,
peanuts.
Notes 290
Reliance Principle encourages development of tools for analyzing POWER
DYNAMIC
power dynamic determines trust, reasonable reliance, responsibility
Joseph Hoffman v. Red Owl Stores, Inc. 291
Where reliance on a promise of an investments sufficiency to open a
franchise leads one to detrimental reliance, can he claim relief under
Restatement 90 in a jurisdiction that doesnt acknowledge 90s validity?
The court opts to adopt 90
promise need not be comprehensive as Offer: read 90 by its letter.
Injustice requirement requires policy decision by court.
Gillian K. Hadfield, Problematic Relations: Franchising & the Law of
Incomplete Contracts 297
Continuing relationship in which for provides licensed privilege to do
business plus
assistance in organizing, training, merchandizing, and management in
return for a
consideration from fee.
based on concept that $ to be made creating, perpetuating
business
opportunities for others.
chain of small businesses bound by image and policies of a parent corp.
Giving up the inalienable right to mismanage your own business.
Changes dynamic of ownership / control in employment.
Typical employment arrangement: Employer all ownership &
control
Contractor Relationship: Ker and client each have some resources
and control.
Franchise: Franchisor controls, Franchisee owns
Most Fees use personal savings as initial investment
Some land owned by Fee, some leased to fee by for (McD)
Costs:
Fee pays For an up front freanchise fee for privilege of paying for
their shit.
Royalties
23
Service fees
price markup
location
commission from suppliers
Major hardships:
Fee has ultimate control over use of corp. branding
Fors sometimes opportunistically abuse power.
Structural center is a conflict of interests:
fee - maximize profits w/out expense unrelated to
compensation
for sell more franchises and increase royalty revenue
Startup costs sunk value of fise much less if sold to transfer $
to another biz
For keeps biz going w/out allowing fee to recover sunk cost
opportunism.
Some for request for fee to do more advertising opportunistic,
some legitimate
Many ambiguities in Fise relationship not clear from K of Fise
In Franchise K
Frequency of payment
Expected training levels
Advertising responsibilities
supplies forthcoming
sales made
royalties paid
distances btw outlets
Ambiguities Not In Franchise K
how $ promotions?
how often are outlets required to refurbish?
what measures to boost sales can be required
Reliance Relationship superiority and inexperience
mutuality of exchange in fise exchange btw equals
Reliance relationship created by fors superiority, fees
inexperience
For wont change K. Wont let it be examined until after 2
deposits.
No compromise, negotiation, change in K whatsoever:
sign or dont
offer to negotiate = weakness on pt of for.
strength part of what fee is purchasing.
Attracts inexperience-fors advice, assistance more valuable
to ignorant fee
Intimacy & Interdependence
A relationship btw unequals
Family terminology, wedding terminology
Note 306
Red Owl never explicitly promised Hoffman fise: represented assured
Formal fise agreements characterized by indefiniteness: openended representations
part of nature of a relationship.
Hoffman: reliance itself evidence of commitment.
24
prejudicial
Drennan v Paving Star: Reasonable reliance resulting in foreseeable
change in position affords a compelling basis for implying a

subsidiary promise not
to revoke a bilateral K.
an agreement to agree can be enforced by PE.
Dayton Malleable Clears $5 Million Capital Outlay 306
DM to spend $10M upgrading plant. Employees agreed to help improve
divisions financial
condition thereby maintaining operations at Columbus facility extend
current labor K one
year w/o raises. Union will assist in creating new productivity standards.
Abbington v. Dayton Malleable, Inc. 307
Did D make a promise on which P could reasonably rely to detriment, and
if so, is it possible
to litigate PE on oral evidence where a written K btw the parties covers the
same matter?
Local 1330: PE Recognizes the possibility of the formation of a K by action
or forbearance
on the part of the party or a second party based upon a promise made by
the first party under
circumstances where the action of forbearance of the second party should
reasonably have
been expected to produce the detrimental results to the second party that
they did produce.
For some reason the statements by DMI at the tent meeting do not
constitute promises, nor do
press releases
Notes 311
Abbington reliance reasonable only on clear and unambiguous (clear &
definite Bank of
Standish) manifestation of willingness to commit to arrangement
-Restatement
Ladehoff: If we are to convert this plant we would not shut down we
would continue to operate with little interruption 561 F.Supp at 1307
Social situation: history of communication w/ DMI, recent plant closures
elsewhere.
1)If you were a DMI employee, would you have relied on Ladehoffs
assurance?
-Would not have much choice see question on when ambiguous
promises are
reasonable to rely upon. or Would not have trusted, but would
have relied.
2) Would I have trusted Ladehoff on choices facing board &
consequences of each?
-No, not entirely, but would have little choice but to rely.
3)Could one argue that enforcement of non-closure unnecessary to
avoid injustice?
- 1000% increase in executive salaries shows injustice at expense
of workers.
Other means of averting this injustice not clear.
25
Plant left as deteriorating waste. Shifted costs of ceasing operation to

community.
In the US it is never just to require a business to lose money
Employer=owner, employee owner: informs employment decisions.
Argument for Job as Property right
Beerman&Singer: Baseline Qs In Legal Reasoning: jobs as
property right
Barbara Kingsolver, Why I Am a Danger to the Public 317
Union busting culture scabs make empowerment of collective bargaining
worthless
Vicki treats co. as force of nature her overt frustration is for the scabs.
Workers can negotiate individually until it is clear that this will do no good.
Sometimes as in Abbington union nothing more than a tool to pacify
workers.
Can be an important tool to check power of companies
health care
8 hour day
weekends
Vicki undergoes a lot to support the strike despite scabbing making it
more futile.
Duty to grampa: put on a railcar like a cow for being a wobbly and
a Mexican.
and to all who fought bled & died for good of workers
everywhere
2. Expected & Reasonable Reliance: Action or Forbearance by Promisee
or a Third Person 320
Jo Laverne Alden v. Elvis Presley 320
Can a promise be enforced against a decedent by PE where the estates
refusal preceded the
promisees forbearance?
P must show detrimental reliance and a loss suffered as a result of that
reliance.
Settlement K not binding until approved by the court.
Reliance on promise where refused by estate is unreasonable
Elvis Presley and Vera Matson, Love Me Tender 324
This song is written by Ken Darby. He, Otis Blackwell and Arthur Crudup
signed away their
rights to be the credited authors of songs made famous by Presley.
Guy Kinoshita v. Canadian Pacific Airlines, Ltd. and D.W. Merrell
Ronald K. Nakashima v. Canadian Pacific Airlines, Ltd.and D.W.
Merrell 324
our written employment arrangements constitute an enforceable K
Where the discharge of an employee violates a clear mandate of public
policy, his employer
should be liable in tort
Offer Acceptance Consideration necessary to make policies in employment
manual part of
original employment K / employment K as modified by parties
Not necessary to know / have read terms: Instinct with an Obligation
Employers issue manuals chiefly to Create atmosphere of fair
treatment & Job security
Expect, demand employee compliance
26
same.
Employees justifiably rely, justifiably expect employers to do
Failure of unions to organize indicates reliance on

policies.
B. Promises Made in Recognition of Past Benefits 330
Mills v. Wyman 330
Can a promise to pay for services provided prior to the formation of that
promise have
sufficient consideration by those prior services?
A moral obligation is sufficient consideration to support an express
promise. There must be
some pre-existing obligation which has become inoperative by positive law
to form a basis
for an effective promise.
Though a moral obligation exists, the law does not enforce it.
NoteOn the Moral Consideration Doctrine 333
Prior consideration valid where parties would have formed a K but couldnt
by statute
eg, one is a minor who will soon be of age, can create K when of
age
Serves public policy: natural law
Joe Webb v. Floyd McGowin 334
Can an estate be made to continue promised periodic payment based on
prior consideration?
Moral obligation can be sufficient Cons where promissor has received a
material benefit.
Does not require original duty / liability
Express promise to pay raises presumption services rendered by request
Note 336
Grant Gillmore: Webb v McGowan will grow like Jacks beanstalk.
Lena Harrington v. Lee Walter Taylor 337
Does saving ones life from an angry battered spouse constitute sufficient
consideration for a
subsequent promise to pay for injuries sustained during the act?
Prior consideration is no consideration.
A humanitarian act performed voluntarily is not sufficient for legal
recovery.
Notes 337
Restatement 86 Promise for benefit received:
1)Promise recognizing past benefit is binding to extent necessary to
prevent injustice
2) UNLESS
a) promisee conferred benefit as gift / promisee not unjustly
enriched
b) value is disproportionate to benefit.
NY Gen. Obligations Law Art. 5 5-1105: Binding w/ past Cons if valid
otherwise & written
An Alternative to Restatement (Second) Section 86: 338
A serious promise made in recognition of a benefit received by the
promisor or rendered by the promisee in the past is not unenforceable by reason
of lack of consideration
27
Realty Associates of Sedona v. Valley National Bank of Arizona

Transamerica Title Insurance Company, and Katherine L. Peterson 339
Where a second agreement would invalidate a first, can the first be
enforced when it appears
to be based in prior consideration?
Restatement 86, comment G: statutory agreement authorizing broker
to sell is void unless
in writing. Written, signed sales agreement binding
Consideration a benefit to promisor or detriment to promisee.
Listing agreement must be read w/ purchase K signed on same day
AZ law: read contemporaneous instruments together for nature of
transaction.
Intended to apply to sale (executed on same day)
Notes 342
1) How often are promises made on the basis of past benefit in
commercial settings?
2) Was Blackburns promise to pay Associates for work done in the past in
his self interest?
Right thing to do? Just?
3) Are values of restitution in conflict with those of bargain?
C. Review of Bases of Liability in Contract and Restitution 343
a) Bargained for exchange
b) Promissory Estoppel
c) Promise in Recognition of Past Benefit
d) Promise Under Seal
But: UCC 1-107, 2-205
e) Restitution
1) No explicit promise necessary
2) Unjust Enrichment
3) Breach of Fiduciary Duty
4) Violation of Statutory Duty
5) Constructive Trust
6) Replevin
William Edwin Van Brunt III v. Robert Rauschenberg 344
Breach of K
1)agreement,
2)due performance by P,
3)breach by D
4)damage suffered by P.
K by unmarried living together as valid as not living together (if sex not
part of Cons.).
Promise to transfer real property must be in writing
Promise to pay debt must be in writing to be enforced by creditor, need not by debtor.
Statute of Limitations 6 years on Breach of K claims
Work prepared on behalf of an employer becomes property of the employer.
Immediate and superior right of possession.
Constructive trust: where property acquired so that title holder may not in good conscience
retain the beneficial interest.
1)Confidential / fiduciary relationship
2) promise / agreement express / implied
3) transfer in reliance upon such promise / agreement
4)unjust enrichment resulting therefrom.
28
a) D unjustly enriched
b) enrichment at Ps expense
c) Ds retention of benefit would be unjust
P didnt demonstrate confidential relationship necessary for creation of constructive trust.
Services of a type ordinarily rendered gratuitously?
RESTATEMENT OF CONTRACTS 2d
1. CONTRACT DEFINED
A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the
performance of which the law in some way recognizes as a duty.
2. PROMISE; PROMISOR; PROMISEE...
(1) A promise is a manifestation of intention to act or refrain from acting in a specified way, so made
as to justify a promisee in understanding that a commitment has been made.
(2) The person manifesting the intention is the promisor.
(3) The person to whom the manifestation is addressed is the promisee.
17. Requirement Of A Bargain
(1) Except as stated in Subsection (2), the formation of a contract requires a bargain in which there is a
manifestation of mutual assent to the exchange and a consideration.
(2) Whether or not there is a bargain a contract may be formed under special rules applicable to formal
contracts or under the rules stated in 82- 94.
20. EFFECT OF MISUNDERSTANDING
(1) There is no manifestation of mutual assent to an exchange if the parties attach materially
different meanings to their manifestations and
(a) neither party knows or has reason to know the meaning attached by the other; or
(b) each party knows or each party has reason to know the meaning attached by the
other.
24. OFFER DEFINED
An offer is the manifestation of willingness to enter into a bargain, so made as to justify
another person in understanding that his assent to that bargain is invited and will conclude it.
29. To Whom An Offer Is Addressed
(1) The manifested intention of the offeror determines the person or persons in whom is created a
power of acceptance.
(2) An offer may create a power of acceptance in a specified person or in one or more of a specified
group or class of persons, acting separately or together, or in anyone or everyone who makes a
specified promise or renders a specified performance.
40. Time When Rejection Or Counter-Offer Terminates The Power Of Acceptance
Rejection or counter-offer by mail or telegram does not terminate the power of acceptance until
received by the offeror, but limits the power so that a letter or telegram of acceptance started after the
sending of an otherwise effective rejection or counter-offer is only a counter-offer unless the
acceptance is received by the offeror before he receives the rejection or counter-offer.
45 -- Option Contract Created by Part Performance or Tender
(1) Where an offer invites an offeree to accept by rendering a performance and
does not invite a promissory acceptance, an option contract is created when the
offeree tenders or begins the invited performance or tenders a beginning of it.
(2) The offeror's duty of performance under any option contract so crated is
conditional on completion or tender of the invited performance in accordance
with the terms of the offer.
63. Time When Acceptance Takes Effect
Unless the offer provides otherwise,
(a) an acceptance made in a manner and by a medium invited by an offer is
operative and completes the manifestation of mutual assent as soon as put out
of the offeree's possession, without regard to whether it ever reaches the offeror;
but
29
(b) an acceptance under an option contract is not operative until received by the
offeror.
66. Acceptance Must Be Properly Dispatched
An acceptance sent by mail or otherwise from a distance is not operative when
dispatched, unless it is properly addressed and such other precautions taken as
are ordinarily observed to insure safe transmission of similar messages.
71 -- Requirement of Exchange; Types of Exchange
(1) To constitute consideration, a performance or a return promise must be
bargained for.
(2) A 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.
(3) The performance may consist of
(a) an act other than a promise, or
(b) a forbearance, or
(c) the creation, modification, or destruction of a legal relation.
(4) The performance or return promise may be given to the promisor or to some
other person. It may be given by the promisee or by some other person.
79 -- Adequacy of Consideration; Mutuality of Obligation
If the requirement of consideration is met, there is no additional requirement of
(a) a gain, advantage, or benefit to the promisor or a loss, disadvantage, or
detriment to the promisee; --or(b) equivalence in the values exchanged or
(c) mutuality of obligation
86. Promise For Benefit Received
(1) A promise made in recognition of a benefit previously received by the promisor from the promisee
is binding to the extent necessary to prevent injustice.
(2) A promise is not binding under Subsection (1)
(a) if the promisee conferred the benefit as a gift or for other reasons the promisor has not been
unjustly enriched; or
(b) to the extent that its value is disproportionate to the benefit.
87. Option Contract
(1) An offer is binding as an option contract if it
(a) is in writing and signed by the offeror, recites a purported consideration for the making of the
offer, and proposes an exchange on fair terms within a reasonable time; or
(b) is made irrevocable by statute.
(2) An offer which the offeror should reasonably expect to induce action or forbearance of a
substantial character on the part of the offeree before acceptance and which does induce such action or
forbearance is binding as an option contract to the extent necessary to avoid injustice.
90 -- Promise Reasonably Inducing Action or Forbearance
(1) A promise which the promisor should reasonably expect to induce action or
forbearance on the part of the promisee or a third person and which does induce
such action or forbearance is binding if injustice can be avoided only by
enforcement of the promise. The remedy granted for breach may be limited as
justice requires.
(2) A charitable subscription or a marriage settlement is binding under
subsection (1) without proof that the promise induced action or forbearance.
205. Duty Of Good Faith And Fair Dealing
Every contract imposes upon each party a duty of good faith and fair dealing in
its performance and its enforcement.
RESTATEMENT OF RESTITUTION
2. Officious Conferring Of A Benefit
30
A person who officiously confers a benefit upon another is not entitled to

restitution therefor.
UCC
2-103. Definitions and Index of Definitions. (1)(b)

"Good faith" in the case of a merchant means honesty in fact and the observance of
reasonable commercial standards of fair dealing in the trade.
2-201(19)
"Good faith" means honesty in fact in the conduct or transaction concerned.
2-204. Formation in General.
(1) A 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.
(2) An agreement sufficient to constitute a contract for sale may be found even though the
moment of its making is undetermined.
(3) 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.
2-205. Firm Offers
An offer by a merchant to buy or sell goods in a signed writing which by its terms give
assurance that it will be held open is not revocable, for lack of consideration, during the
time stated or if no time is stated for a reasonable time, but in no event may such period
of irrevocability exceed three months; but any such term of assurance on a form supplied
by the offeree must be separately signed by the offeror.
2-206. Offer and Acceptance in Formation of Contract.
(1) Unless otherwise unambiguously indicated by the language or circumstances
(a) an offer to make a contract shall be construed as inviting acceptance in any manner and
by any medium reasonable in the circumstances;
(b) an order or other offer to buy goods for prompt or current shipment shall be construed as
inviting acceptance either by a prompt promise to ship or by the prompt or current
shipment of conforming or non-conforming goods, but such a shipment of nonconforming goods does not constitute an acceptance if the seller seasonably notifies the
buyer that the shipment is offered only as an accommodation to the buyer.
(2) Where the beginning of a requested performance is a reasonable mode of acceptance an
offeror who is not notified of acceptance within a reasonable time may treat the offer as
having lapsed before acceptance.
2-207. Additional Terms in Acceptance or Confirmation.
(1) A definite and seasonable expression of acceptance or a written confirmation which is
sent within a reasonable time operates as an acceptance even though it states terms
additional to or different from those offered or agreed upon, unless acceptance is
expressly made conditional on assent to the additional or different terms.
(2) The additional terms are to be construed as proposals for addition to the contract.
Between merchants such terms become part of the contract unless:
(a) the offer expressly limits acceptance to the terms of the offer;
(b) they materially alter it; or
31
(c) notification of objection to them has already been given or is given within a reasonable
time after notice of them is received.
(3) Conduct by both parties which recognizes the existence of a contract is sufficient to
establish a contract for sale although the writings of the parties do not otherwise establish
a contract. In such case the terms of the particular contract consist of those terms on
which the writings of the parties agree, together with any supplementary terms
incorporated under any other provisions of this Act.
2-305. Open Price Term.
(1) The parties if they so intend can conclude a contract for sale even though the price is not
settled. In such a case the price is a reasonable price at the time for delivery if
(a) nothing is said as to price; or
(b) the price is left to be agreed by the parties and they fail to agree; or
(c) the price is to be fixed in terms of some agreed market or other standard as set or recorded
by a third person or agency and it is not so set or recorded.
(2) A price to be fixed by the seller or by the buyer means a price for him to fix in good faith.
(3) When a price left to be fixed otherwise than by agreement of the parties fails to be fixed
through fault of one party the other may at his option treat the contract as cancelled or
himself fix a reasonable price.
(4) Where, however, the parties intend not to be bound unless the price be fixed or agreed
and it is not fixed or agreed there is no contract. In such a case the buyer must return any
goods already received or if unable so to do must pay their reasonable value at the time of
delivery and the seller must return any portion of the price paid on account.
2-601. Buyer's Rights on Improper Delivery.
Subject to the provisions of this Article on breach in installment contracts (Section 2-612)
and unless otherwise agreed under the sections on contractual limitations of remedy
(Sections 2-718 and 2-719), if the goods or the tender of delivery fail in any respect to
conform to the contract, the buyer may
(a) reject the whole; or
(b) accept the whole; or
(c) accept any commercial unit or units and reject the rest.

32

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CONTENT

in a market and in any exchange.

A way for society to allocate RISK

Influence: Power by fear without explicit threat

Gifts given to one another are gratuities.

Promissory Estoppel = most direct legal expression of RELIANCE

Gives Weight to Informal Agreements

Variations of the Reasonable Person:

Reminds cts difference important, Obj reaffirms

Significant differences in backgrounds and NEED for particular

Not what offeror meant, what REASONABLE person would have

RESTATEMENT 20(2)(a) only REASONABLE understanding of doc

bargain, so made as to justify another person in understanding that his assent to

ACCEPTANCE: Manifestation of willingness to enter into the exchange as

Newman v Schiff: Call in show offer, but performance didnt meet

James v Turilli: Jesse James alive: reward to prove wrong. Enforced.

Jennifer Harms v. Northland Ford Dealers and Moccasin Creek Country

Wheeler didnt rely on plea to detriment; can revoke - no prom. estoppel.

Meaning of law cannot be understood outside of moral principles.

Analytic Jurisprudence-Debate about nature of law, post-war

Laurence Tribe, Ronald Dworkin.

indeterminacy of legal doctrine

Emerging Use of Consideration to Implement Fairness & Other Public

Grant Gilmore The Death of Contract

Poor pay more than rich for comparable goods, housing,

pay more than for

Angela White v. Village of Homewood and Village of Homewood Fire and

Dissent: Adequacy an issue for fact finder should go to court, not be

Where benefited party is in dominant social position.

Ks I UDC-DCSL Prof. Samuel Jefferson. Fall 2007

Jerry M. Worley v. Wyoming Bottling Company, Inc.,d/b/a Coca-Cola of

Japan: Short of bankruptcy, businesses run primarily FOR

Richard E. Freeman v. The Duluth Clinic, Ltd. 267

statement w/o expecting reliance.

Drennan v Paving Star: Reasonable reliance resulting in foreseeable

change in position affords a compelling basis for implying a

Plant left as deteriorating waste. Shifted costs of ceasing operation to

Employees justifiably rely, justifiably expect employers to do

Failure of unions to organize indicates reliance on

Realty Associates of Sedona v. Valley National Bank of Arizona

A person who officiously confers a benefit upon another is not entitled to

2-103. Definitions and Index of Definitions. (1)(b)

Ks I UDC-DCSL Prof. Samuel Jefferson. Fall 2007

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