First question – UCC or Not? Goods/Services?

Predominance test

OFFER
- Willingness to enter into a bargain? R 24 (UCC 2-204-206)
o Transfer of power
- Unilateral or Bilateral?
o Promise or performance?
- Identify the OFFEROR?
o Master of the offer, International
- Assent
o Meeting or the Minds
o Objective theory, most followed, Lucy v. Zehmer (words & actions
matter)
- Intent
o Words of offer
 Objective test of a RP
 Strength of language/definiteness, Fairmont Glass
 Just an offer to negotiate, discrepancy in terms, Harvey
o Surrounding circumstances
 Real or Joke that’s obvious? Jest, Lucy v. Zehmer
 RP think it was really an offer? Harvey
o Parties involved
 Names specific parties (private)
 Like an invitation (public, like ad)
- Certainty of terms
o R 33
o More certain = more likely an offer
- Communication
o To appropriate audience
o Mistake
 Bids can be rescinded, clerical errors, Elsinore
 Mistakes of judgment not excusable
- Length of the offer?
o If not stated a reasonable time, Evertite
- Factors to look for – Southworth
o RP test, Lucy
o Words of promise, undertaking, commitment that are clear
o Expressed names of offeree (none made in Lefkowitz)
o Definiteness and detail (of terms Fairmont)
ACCEPTANCE
Voluntary act of the offeree whereby he exercises the power conferred upon him by the
offer, and thereby creates the set of legal relations called a contract.
- Who may accept, R 52
o Person to whom offer is made
- How can it be accepted? R 50
- Required to be R 30
o Equivocal and unqualified
- Type
o Bilateral – promise for promise
 Notice generally required, White v. Corlis & Tift
o Unilateral – promise for action or forbearance
 Notice not generally required, allow reasonable time, Evertite
- Form
- Good – UCC 2-204-207
- Offeror
o Determines the act that constitutes acceptance, can chose whether
communicated or not (Intl Filter)
o Suggested method doesn’t preclude another, Allied v. Ford
- Silence acceptable? R 69 (not generally)
- Counter-offer?
o Operates as a rejection and reverses the roles/Mirror Image Rule!

CONSIDERATION
- Bargained for?
o Benefit to promisor or detriment to promise (Webb v. McGowin)
- Promise for a promise? (bilateral) R 71
o UCC 2-615, 2-306, 2-716, 2-309(3)
- Exchange – R 82, 83
- Bargain – R 370-377
- Kind of consideration?
o Action
o Forbearance (Hammer v. Sidway) even in good faith, Feige v. Boehm
o Promise
- Other considerations
o Illusory, R 77 (Strong v. Sheffield) be specific!!!
o Gratuitous (Kirksey v. Kirksey)
o Past (Mills v. Wyman, Dementas, Feinberg)
o Mistake? R 152 (Feige v. Boehm, Elsinore)
- Motive
NOT CONSIDERATION
- Reliance R 90! and R 75
o Action induced by promise? (Ricketts v. Scothorn)
o Reasonable belief for reliance? (Feinberg v. Pfeiffer)
o Partial performance, Johnson v. McEnroe

- Unjust Enrichment/ Promissory estoppel

o One side unduly enriched? (Pyeatte v. Pyeatte)
o Restitution (quasi K) damages R 370, R 112, 371
- Moral obligation? (Webb v. McGowin)
- Quantum Meriut

TERMINATION OF ACCEPTANCE
- Lapse? Anytime if no consideration to keep it open
- Revocation? At any time if no consideration to keep it open Ragosta v. Wilder
- Option K? can’t terminate at any time – must see if conditions are met (like
unilateral contract), Rewards that induce part performance, Toys v. Burlington
- Firm offer under UCC?
- Rejection?
o Mirror Image Rule – services/CL works like a counter offer, R 59
o UCC? 2-207 applies
- Mailbox Rule R 63(a)
o Revocation – receipt
o Acceptance – dispatch

BATTLE OF THE FORMS

- UCC 2-207
o (1) A definite and seasonable expression which is sent w/in a reasonable
time operates as an acceptance even w/ addt’l or different terms unless
acceptance is expressly made conditional on assent to the addt’l terms
 If ADDITIONAL TERMS – go to (2)
 If DIFFERENT TERMS – probably go to (3)
o (2) The additional terms are construed as proposals for addition to the K –
between MERCHANTS they become part of the K unless
 The offer expressly limits acceptance of the tems
 They MATERIALLY alter it, Step-Saver & Dorton
• Subject to doesn’t make it expressly made conditional,
Dorton
 Notification of objection has already been given or given w/in a
reasonable time
o (3) Conduct by both parties which recognizes the existence of a K
establishes a K although these writings don’t otherwise establish a K.
 These particular terms of disagreement drop out and are filled w/ UCC gap
fillers
 Conduct of parties which recognizes a K even if writings don’t lets
gap fillers create one, C. Itoh
 Majority view when dealing with “different terms” is knockout
rule (then fill) though Posner favors CA minority view of treating
them as additional terms as it seems it was intended, Northrop
o Shrinkwrap terms?
 Typically there is thought to be a duty to read these terms, ProCD

PRECONTRACTUAL LIABILITY
- No offer + acceptance w/ consideration = no K, R 45
- Remedies
o UE
o PE/detrimental reliance, R 90
- Revocability of Subs bids
o General’s reliance will allow recovery under PE, Drennan
o Sub no reliance even if listed, Holman
- Option K – R 87(2)
o An offer which is reasonably expected to induce action/forbearance before
acceptance and which does is a binding option K to the extent necessary to
avoid and injustice,

REQUIREMENT OF DEFINITENESS
- K must be specific enough to be enforced – R 33(2) Certainty
o Terms explicitly stated
o Reasonably certain if provide a basis for determining the existence of
breach and giving appropriate remedy
 If expectation speculative that doesn’t mean reliance can’t be
given, Hoffman
- Assent
o Negotiate in good faith is enforceable and not lacking definiteness, CH
o Option K to agree to agree doesn’t fail b/c of lack of definiteness, Toys
o Long term relationship – may not get around lack of definiteness if require
good faith, Eastern, Oglebay, UCC 2-306
o Intent of parties
STATUTE OF FRAUDS
- R 131, 139
- UCC 2-201 = S/F
o UCC 1-201(46) requires writing
- Suretyship Clause – agreeing to take on debt of another
o Exceptions:
 Main purpose doctrine
 Benefit by grantee
- One Year Clause
o Performable?
o Lifetime employment NOT required to be in writing
- Employment Agreements
- Goods worth more than $500?
- Marriage?

AMERLIORATING THE S/F

- Reliance? R 139
o A promise which promisor reasonably expect to induce action/forbearance
is enforceable notwithstanding the S/F if only way to prevent injustince,
Monarco
- Partial performance?
o Reliance damages can be given but not equitable/specific remdies,
Johnson Farms
- Estoppel?
- Agent acting on behalf of another?

POLICING THE BARGAIN

CAPACITY
- Age R 14 - Infants
o Over 21 – must be or voidable at option (now 18 is age) Keifer
o Exception: Necessaries?
- Insane R 15 – Mental illness or defect
o Not able to function? Has to be typically, Cundick OR
o Not act reasonably & the other party had reason to know, Ortelere

UNFAIRNESS
- Bargaining disparity?
o Restriction on land?
 - Reliance in good faith
o Prospective test
- Business people w/ same level of bargaining power (relatively)
o Protect freedom to K

OVERREACHING
- Pressure
- Pre-existing duty – C/L rule – once there’s a K under which the party has a duty
the party can’t refuse and demand a higher price, NO CONSIDERATION b/c
already responsible for duty, Alaska Packers
- Express duress – unfairly coerced b/c of wrongful act or threat, R 175
- Economic duress? Alaska Packers
o For necessary?
o Notice given?
o No other options?
o Usually allow modification if unforeseen circumstance that creates
additional consideration arises, Watkins
- UCC 3-311 – accord & satisfaction by use of instrument
- UCC 2-209 abolishes pre-existing duty rule prefer economic duress if resistance
and no alternatives, Austin
- Duress in business
o Austin, see UCC 2-209 test
- Undue influence
o 7 factor test, Odorizzi
- Concealment
o Patent or latent?
 Latent = no duty to disclose, caveat emptor - Swinton
o Positive actions to conceal/fraud = can’t do this, Kannavos
- Misrepresentation R 164 – When misrepresentation makes K voidable
o When justified in relying then voidable K by the recipient
o Must be of fact not opinion, R 168
o Opinion – might be fraud in rare cases, Vokes
 Trickery
 No Arms Length dealing

ADHESION CONTRACTS & UNCONSCIONABILITY

- Adhesion K – document containing non-bargained for clause in fine print
- Standard form contracts R 211(3) – whether party has reason to know/assent
o Exculpatory clauses
 Warranty – UCC 2-314
• Not going to enforce something that leans towards public
injury, Henningsen
 Public policy behind it if not unconscionable then enforceable,
O’Callaghan
 o Arbitration clause
 Reasonable expectations
 Unfair terms? Graham
o Forum clause
 Fair and policy reasons behind it, Carnival Cruise

UNCONSCIONABILITY
- Procedural (process) & Subjective
o Need both
o Can relax one depending on the gravity of the other
- Fairness of terms
o Will take a PROSPECTIVE, not retrospective approach, Tuckwiller
o Look at bargaining power & what was given v. what received, McKinnon
o Some things are obviously UNFAIR, Williams v. WT
- Price unconscionability
o Bargaining disparity, Jones
o Bad law
- Commercial
o Public policy/illegality behind it, but going to allow freedom to K and
high margin of profit isn’t evidence if no disparity in bargaining power,
Bush
- Substantive – outcome is so one-sided and unfair it’s refused to enforce,
Armandiz
- Remedies for Unconsionability
o UCC 2-302 -

PUBLIC POLICY
- Freedom to K protected, Bush
- Illegal straight up
- Labeling as illegal
o Court will look into nature of the conduct, extent of public harm & moral
quality of conduct in light of prevailing community standards, R 178
- Clean hands, Bovard
o Not going to provide an equitable remedy to “bad parties” will leave it
where it is
- In pari delicto, XLO, Bovard
o P defense that D is much more culpable
- Price fixing/indirect illegality, XLO