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Author Topic: Funny Contract Hypo...  (Read 8143 times)

Dean Prosser

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Re: Funny Contract Hypo...
« Reply #10 on: November 01, 2004, 07:38:11 PM »
You are correct - the offer is not the newspaper advertisement, but an invitation to open up bidding.  In such a situation, the offer would be the tendering of the $6k, which Jane never did.  And Mary would accept by actually taking the money.  There are a number of issues besides this that may be stated. 

Umm...no. You're dead wrong. A PROMISE to pay someone $6K for a car that has been thoroughly described is an OFFER (it's a promise, no? It's sufficiently definite, is it not?)...Jane need not 'tender' the money. The scenario describes a valid contract, formed when accepted by Mary over the phone. Sorry.

Good Point Bombs.  However, would Jane be bound to pay the 6K just because she "said so."  Where is the consideration until the actual tendering of the money?  Perhaps consideration would be as little as driving over to pick up the car...  but the facts tell us otherwise:

"Jane calls later that night and asks if it is a good time to come by. Mary said "sorry, I already sold it, and got 9000.00"  Jane is outraged, she tells Mary that they had a contract, (verbal) offer, acceptance(meeting of the minds) and consideration. (6000.00)."

But the $6k surely is not consideration, yet - maybe if she went to the bank to get a loan for 6K, but the facts are silent... so with that, I run with a unilateral contract theory.  But, I may be wrong. 

Dean Prosser

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Re: Funny Contract Hypo...
« Reply #11 on: November 01, 2004, 07:45:32 PM »
PS - re last post about going over to the bank to get a loan, or driving over to get the car is consideration... it would be more clear if I said performance, not consideration, since I take a unilateral approach. 

Louder Than Bombs

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Re: Funny Contract Hypo...
« Reply #12 on: November 01, 2004, 08:21:22 PM »
...

Dean Prosser

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Re: Funny Contract Hypo...
« Reply #13 on: November 01, 2004, 09:25:17 PM »

Good Point Bombs.  However, would Jane be bound to pay the 6K just because she "said so." 


Yes. That is why we have contract law. A contract is not a piece of paper - it is a relationship between parties that defines their obligations towards one another. A contract may be formed through words (both written and oral), conduct, or in some cases, even silence (that is, silence may lead to an acceptance)...


That's Deep  :)  Bombs, your opinion is duly noted.

swifty

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Re: Funny Contract Hypo...
« Reply #14 on: November 08, 2004, 05:31:30 AM »
You are correct - the offer is not the newspaper advertisement, but an invitation to open up bidding.  In such a situation, the offer would be the tendering of the $6k, which Jane never did.  And Mary would accept by actually taking the money.  There are a number of issues besides this that may be stated. 

Umm...no. You're dead wrong. A PROMISE to pay someone $6K for a car that has been thoroughly described is an OFFER (it's a promise, no? It's sufficiently definite, is it not?)...Jane need not 'tender' the money. The scenario describes a valid contract, formed when accepted by Mary over the phone. Sorry.

EDIT: In fact, offers are almost always promises, except in one rare case...when an offer looks to a reverse uni K.

I disagree.  There was no consideration until money exchanged hands.  You can say all you want about promises, but you can't apply that reasoning to this hypo. 

AN ADVERTISEMENT IS NOT OFTEN THE BASIS OF A CONTRACT . We learned that a
contract can only be formed when there is offer, acceptance, and consideration. Store
advertisements are not usually offers. The law, perhaps somewhat artificially, classifies them as invitations to bargain. But there are exceptions to this.
Suppose a store advertises that it will give a free gift or a special discount to
"the first one hundred customers" or to a person who has made some other special
effort. If so, the store has made an offer. You can accept it by making the special effort successfully, which constitutes consideration.
And the sign said "Long-haired freaky people need not apply" So I tucked my hair up under my hat and I went in to ask him why. He said "You look like a fine outstanding young man, I think you'll do.  So I took off my hat, I said "Imagine that. Huh! Me workin' for you!"Sign, sign, everywhere a sign..

joshdelight

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Re: Funny Contract Hypo...
« Reply #15 on: November 08, 2004, 01:18:57 PM »

Offers, as stated above, are promises (usually). Note that Jane's offer to Mary over the phone was a PROMISE - 'I WILL pay you $6000 if you WILL sell me your car'. The hypo even uses the word offer! This is without question a Bi K -  it is certain that Jane is bargaining for the promise to sell the car. What would be the performance - handing over the keys?

To stray slightly from the issue, the simple fact that something identifies itself as an "offer" is not dispositive that it is, in fact, an offer.  The offer is that which creates a power of acceptance in the offeree.  Ads generally fail as offers because they usually do not specify who has the power to accept, they often do not specify a value of the offered goods, and they almost always fail to manifest an intention to be legally bound.  A famous example of an ad that IS an offer is Carlill v. Carbolic Smoke Ball Co. 1 Q.B. 256 (1893).

Granted, I agree with you that the offer is not the newspaper ad but Jane's initial telephone call; but hey, we're in law school, and we live to argue.  ;)

I agree that the promise to pay $6000 was consideration for Mary's promise to sell the car to Jane. A promise can indeed be consideration--and fortunately the Restatement (Second) of Contracts 75 (1981) provides under what circumstances a promise can be consideration: "...A Promise which is bargained for is consideration if, but only if, the promised performance would be consideration."

The promised performance is the payment of $6000.  This would be consideration. Therefore, as you have said already, the promise to pay $6000 for the car is also consideration.

When analyzing bilateral vs. unilateral contracts, rather than looking at promise or performance as acceptance, I prefer to defer to Murray's analytical tool:  At the moment of the formation of the K, if one party has a right (but no duty), and the other party has a duty (but no right), then there is a unilateral K.  If at the moment of formation of the K both parties have both a right and a duty, then it is a bilateral K.

In this case, both parties have rights and duties; Jane has a right to the car and a duty make good on the promise to pay, and Mary has a duty to transfer title and possession of the car to Jane and a right to Jane's $6000.  Therefore, it is a bilateral K.
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Dean Prosser

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Re: Funny Contract Hypo...
« Reply #16 on: November 08, 2004, 01:58:14 PM »
I'm just wondering if you all got his one yet:

Mary posts an ad in her local newspaper advertising her Corvette for sale and the asking price in the ad said 6000.00.  Jane calls up Mary, doesn't even want to look at the car, and offers Mary 6000.00 for the Corvette and informs Mary that she will come later that night with 6000.00 and to pick up the car.  Mary agrees, she is happy she sold the car on the first day, and got she was aking for.


There is something funny about this Hypo, and I can't put my finger on it!  I see the Bi K in this, but is it that clear?   

Jane: Offers (Master of Offer) $6k AND she will come to pick up the car - offeror - can Mary accept by a verbal Yes (a promise and a Bi K, or accepts by turning the car over to Jane - uni k)

Mary:  Accepts offer to give up the car provided she comes over with $6k and picks up the car - Conditional acceptance on Jane's performance.  At This Point (not later in the hypo) If Jane did not come over, would there be a breach??? 

Here is why it may be tricky:  From a reasonable offeree (Mary is now the offeree) position, the offer is ambiguous, thus indifferent, meaning *Mary* can accept either by promise or performance.  Common Law would presume Bilateral, Modern Law would presume either.  With that, Mary could bring a defense that she was accepting the ambiguous offer through performance, and Jane did not perform and thus, she rejected the offer when she sold the car to someone else.  However, this is a big reverse because Jane is the one who would commence performance, not Mary, the offeree!  Anyway, just trying to analyze from a different angle.  Yes, a bi K is the strong  argument, but to me,  it's not that obvious...

joshdelight

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Re: Funny Contract Hypo...
« Reply #17 on: November 08, 2004, 04:44:57 PM »
Here is why it may be tricky:  From a reasonable offeree (Mary is now the offeree) position, the offer is ambiguous, thus indifferent, meaning *Mary* can accept either by promise or performance.  Common Law would presume Bilateral, Modern Law would presume either.  With that, Mary could bring a defense that she was accepting the ambiguous offer through performance, and Jane did not perform and thus, she rejected the offer when she sold the car to someone else.  However, this is a big reverse because Jane is the one who would commence performance, not Mary, the offeree!  Anyway, just trying to analyze from a different angle.  Yes, a bi K is the strong  argument, but to me,  it's not that obvious...
The problem I see with this analysis is indeed the "big reverse."  Under UCC 2-206(1)(a), "unless unambiguously indicated by the language or circumstances an offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances."  Given that the offer was by the buyer Jane, the power of acceptance is of course in Mary, the seller. 

If we assume, for the moment, that the exchange of promises over the phone did not execute a K, then Mary the seller-offeree would accept by performance.  Performance in this case has all of jack-squat to do with Jane! Mary's acceptance by performance would be Mary's being available for Jane to tender payment and to make the car accessible for Jane to pick it up. In this scenario, Mary could tell Jane--"no deal," even if Jane showed up on her doorstep with money in hand and said to Mary "I am tendering payment."

Now, the question is how Jane's offer could be accepted.  The language of the offer did not express a specific manner of acceptance. If the circumstances made the offer ambiguous, then any reasonable manner of acceptance is possible. The circumstances indicated that Jane's offer could be accepted, as in fact it was, by Mary's verbal assent to Jane's offer; this is a reasonable manner of acceptance all things considered.  We've established that a promise can be consideration if performance of the promise is consideration, so in my mind, there is no question that there was a bilateral K that formed at the moment "Mary agrees."  If Jane bailed, then Jane would be responsible for any reasonably determinable damages that resulted from her breach, and vice versa for Mary.

Have we resolved this hypo yet?  You be the judge  ;)
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swifty

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Re: Funny Contract Hypo...
« Reply #18 on: November 11, 2004, 05:33:40 AM »
It's resolved if you all believe there WAS NO OFFER.  In this hypo, the offer and acceptance occurred simultaneously when the money was transferred to the seller.

However, the main issue is consideration.  That was taken care of at the precise time the money was transferred to the seller.  This was an easy one.  Come on people!   ::)

And the sign said "Long-haired freaky people need not apply" So I tucked my hair up under my hat and I went in to ask him why. He said "You look like a fine outstanding young man, I think you'll do.  So I took off my hat, I said "Imagine that. Huh! Me workin' for you!"Sign, sign, everywhere a sign..

Wild Jack Maverick

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Re: Funny Contract Hypo...
« Reply #19 on: November 11, 2004, 07:59:45 AM »
I would have to agree with joshdelight.

In this instance, the advertisement served as an announcement that the Corvette was for sale, and the asking price was $6000.

The ad led to Mary calling Jane and making the offer of $6000 for the car, to be paid that same night (setting a time limit), which Jane accepted.  Mary could have offered $3000 or $10,000 or whatever amount that she thought reasonable, and Jane would have had the option of accepting or rejecting the offer. Jane could also have changed her mind and decided to not sell the car or hedged and hoped for a better offer or changed the price, and Mary would have the option of making that offer.

If Mary did not perform by arriving the same night with the $6000 as agreed upon, Mary would have been in breach, and Jane would then have right of recourse, or to release Mary from the contract and to sell the car to someone else the next day.
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