Monday, February 8th, 2016

Mills v. Wyman (1825)

- It is said a moral obligation is a sufficient consideration to support an express promise;
and some authorities lay down the rule thus broadly; but upon examination of the cases
we are satisfied that the universality of the rule cannot be supported
- Accurately reflects the traditional common law view that a promise made in recognition
of a moral obligation arising out of a benefit previously received is not enforceable
Webb v. McGowin (1935)
- Where the promisee cares for, improves, and preserves the property of the promisor,
though done without his request, it is sufficient consideration for the promisors
subsequent agreement to pay for the service, because of the material benefit received
- The averments of the complaint show that in saving McGowin from death or grievous
bodily harm, appellant was crippled for life. This was part of the consideration of the
contract declared on. McGowin was benefited. Appellant was injured. Benefit to the
promisor or injury to the promisee is a sufficient legal consideration for the promisors
agreement to pay
Harrington v. Taylor (1945)
- The question presented is whether there was a consideration recognized by our law as
sufficient to support the promise. The court is of the opinion that, however much the
defendant should be impelled by common gratitude to alleviate the plaintiffs misfortune,
a humanitarian act of this kind, voluntarily performed, is not such consideration as would
entitle her to recover at law
Restatement (Second) of Contracts 86 (1981)
(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.
Tuesday, February 9th, 2016
The Nature of Assent
- objective vs. subjective
Lucy v. Zehmer (1954)
- So a person cannot set up that he was merely jesting when his conduct and words would
warrant a reasonable person in believing that he intended a real agreement
- If his words and acts, judged by a reasonable standard, manifest an intention to agree, it is
immaterial what may be the real but unexpressed state of his mind

Hawkins v. McGee (1929)

Assent and Express Limitations on the Intent to be Bound
(a) That absent an expressed intent that no contract shall exist, mutual assent between the parties,
even though oral or informal, to exchange acts or promises is sufficient to create a binding
contract; and (b) that to avoid the obligation of a binding contract, at least one of the parties must
express an intention not to be bound until a writing is executed
Factors: (1) whether there has been an express reservation of the right not to be bound in the
absence of a writing; (2) whether there has been partial performance of the contract; (3) whether
all of the erms of the alleged contract have been agreed upon; and (4) whether the agreement at
issue is the type of contract that is usually committed in writing
This letter is not intended to create nor should it be construed as creating any legal obligation
Parties can bind themselves not to a particular term but to the process of achieving the terms
- No breach occurs if the parties fail to reach terms
Tribune Type I contract:
- Parties agree on all the points that require negotiation (including whether to be bound)
but agree to memorialize their agreement in a more formal document
- Fully binding it binds both sides to their ultimate contractual objective in recognition
that, despite the anticipation of further formalities, a contract has been reached
Tribune Type II contract:
- binding preliminary commitment
- parties agree on certain major terms, but leave other terms open for further negotiation
- does not commit the parties to their ultimate contractual objective but rather to the
obligation to negotiate the open issues in good faith toward a final contract
Doctors statements to patients and statements made for social purposes or between family
members not necessarily contractually binding
Restatement (Second) of Contracts 2 (1981)
(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.
Restatement (Second) of Contracts 27 (1981)
Manifestations of assent that are in themselves sufficient to conclude a contract will not be
prevented from so operating by the fact that the parties also manifest an intention to prepare and
adopt a written memorial thereof; but the circumstances may show that the agreements are
preliminary negotiations.

Wednesday, February 10th, 2016

Offer:
An act whereby one person confers upon another the power to create contractual relations
between themit must be an act that leads the offeree reasonably to believe that a power to
create a contract is conferred upon him It is on this ground that we must exclude invitations to
deal or acts of mere preliminary negotiation, and acts evidently done in jest or without intent to
create legal relations. All these are acts that do not lead others reasonable to believe they are
empowered to close the contract
Owen v. Tunison (1932)
There can have been no contract for the sale of the property desired, no meeting of the minds of
the owner and prospective purchaser, unless there was an offer or proposal of sale. It cannot be
successfully argued that defendant made any offer or proposal of sale.
Offer vs. non-offer
Harvey v. Facey (1893) (Jamaica)
Their Lordships cannot treat the telegram from LM Facey as binding him in any respect, except
to the extent it does by its term, viz., the lowest price.
Fairmount Glass Works v. Cruden-Martin Woodenware Co. (1899)
Appellant insists that the contract was not closed by this telegram, and that it had the right to
decline to fill the order at the time it sent its telegram of April 24.
In construing every contract, the aim of the court is to arrive at the intention of the parties.
Appelees letter was plainly an inquiry for the price and terms on which appellant would sell it
the goods, and appellants answer to it was not a quotation of prices, but a definite offer to sell on
the terms indicated, and could not be withdrawn after the terms had been accepted.
we quote you
Advertisement as Offers
The general rule is that an advertisement is not an offer, but rather an invitation by the seller to
the buyer to make an offer to purchase
Lefkowitz v. Great Minneapolis Surplus Store (1957)
We are of the view on the facts before us that the offer by the defendant of the sale of the Lapin
fur was clear, definite, and explicit, and left nothing open for negotiation.

This objection may be disposed of briefly by stating that, while an advertiser has the right at any
time before acceptance to modify his offer, he does not have the right, after acceptance, to
impose new or arbitrary conditions not contained in the published offer
Knowledge vs. Reason to Know
Restatement (Second) of Contracts 17 (1981)
(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.
Restatement (Second) of Contracts 18 (1981)
Manifestation of mutual assent to an exchange requires that each party either make a promise or
begin or render a performance.
Restatement (Second) of Contracts 22 (1981)
(1) The manifestation of mutual assent to an exchange ordinarily takes the form of an offer or
proposal by one party followed by an acceptance by the other party or parties.
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.
26
A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is
addressed knows or has reason to know that the person making it does not intend to conclude a
bargain until he has made a further manifestation of assent.