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Contracts Outline

[Contractual Obligation]
Enforceable contract requires:
Offer
Acceptance
Consideration

Mutual Assent
Intention to Be Bound: Objective Theory of Contract

Objective manifestations of an agreement rather than a subjective meeting of the


minds
Intent is determined from what a reasonable person would have thought it meant

Ray v. Eurice & Bros., Inc.: Each party separately signed the back of every page of a
contract, including a list of specifications. Home-buyer assented to those signed terms.
Home-builder claimed that they had never seen them and had assented to an earlier list
of terms.
Holding: There was a contract and the terms were those to which both parties
showed an objective manifestation of assent (i.e. signed the papers).
The contract contained the home-buyers specifications; the home-buyer assented
to those terms. The home-builders contrary belief was a unilateral mistake. An
objective look at the contract shows those terms, signed by both parties, so that is
the contract.

Offer and Acceptance in Bilateral Contracts


Bilateral Contract:
Promise for promise
o Both parties must fulfill their promise
Futurity: promise for future exchange
Restatement 2 (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
Offer
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
the bargain is invite and will conclude it
Empowers the offeree to accept
May be a qualified offer (only empowers offeree to accept based on certain
conditions)

General Rule: Advertisements and form letters are NOT offers

Longergan v. Scolnick: Seller advertised land for sale. Buyer inquired. Seller sent letter
labeled form letter with the requested information and told buyer to let him know
quickly if he wished to purchase. Buyer answered but seller had already sold to someone
else.
Holding: There was no contract. There was no offer, so there could be no contract.
Buyer could not have assented to any of sellers communication because sellers
letter required something other than just saying yes.
o Restatement 24
Izadi v. Machado (Gus) Ford, Inc.: Seller circulated an ad that in large print suggested that
a buyer could trade in any car for $3000. Buyer tried to do so and seller relied on the very
small print in the ad qualifying the trade-in.
Holding: It was an offer because there was language of commitment or invitation to
take action without further communication.
Exception to the general rule that advertisements are not offers
o The ad suggested that no further action was required (first come, first served,
bait-and-switch)
Applying an objective standard to interpreting the advertisement, it is an offer.
Counter-offer
Restatement 39: Changing the terms of an offer; an offerees power of acceptance
is terminated by his making of a counter-offer (the original offer no longer exists)
Restatement
Normile v. Miller: Buyer gave seller an offer to purchase the property. Seller gave buyer a
counteroffer that buyer neither accepted nor rejected. Seller accepted another partys
offer and informed buyer that the counteroffer was revoked.
Holding: The buyer cannot accept the original offer after making a counter-offer
Sellers counteroffer was a new offer. Once this was made, the original offer can no
longer be accepted. Since there was no option contract in the counteroffer, the
seller could revoke it up to the moment of acceptance. Since buyer did not accept it
before revocation, seller was free to revoke his counteroffer and accept another
partys offer.
Acceptance
Restatement 50(1): Acceptance of an offer is a manifestation of assent to the
terms thereof made by the offeree in a manner invited or required by the offer
Restatement 50(3): Acceptance by a promise requires that the offeree complete
every act essential to the making of the promise
Offerees power of acceptance is terminated by
Restatement 36:
o Rejection or counteroffer by offeree
o Lapse of time
o Revocation by the offeror
o Death or incapacity of the offeror or offeree

Mailbox Rule
Acceptance is effective upon dispatch (Restatement 63)
Revocation and offers are effective upon communication (Restatement 40)

Offer and Acceptance in Unilateral Contracts


Restatement 32: In cases of doubt of whether there is a unilateral or bilateral
contract the offeree chooses

Unilateral Contract
Promise for performance
Acceptance of an offer to enter into a unilateral contract is the performance of the
requested act
o Restatement 50(2): Acceptance by performance requires that at least part
of what the offer requests be performed or tendered and includes acceptance
by a performance which operates as a return promise
Restatement 45: In unilateral agreements an option contract is created when
the offeree tenders or beings the invited performance in accordance with the terms
of the offer as long as performance is later completed
o Substantial performance test used in Cook
Petterson v. Pattberg: Offeror wrote to offeree with an offer to enter into a unilateral
contract exchanging a promise that the offeror would reduce the offerees mortgage debt
for a performance that the offeree would pay the reduced principal of the debt prior to a
certain date. Offeror sold the mortgage to a third party before offeree had performed.
Before the due date, offeree visited offeror to pay the mortgage. Offeror stated that he
had sold the mortgage. Offeree showed him the money for his payment and offeror
refused to accept.
Holding: Offeror can withdraw an offer to enter into a unilateral contract at any
point before acceptance.
Unilateral contracts are revocable until the offerees full performance of the acts
called for in the offer because that performance is the acceptance of the offer.
Offeree had not yet performed the act requested of him when he arrived at offerors
home with the money because he had not actually paid the mortgage yet. Since
there had been no performance, the offer had not yet been accepted and was still
revocable. Offeror could withdraw.
Cook v. Colwell Banker/ Frank Laiben Realty Co.: Offeror orally announced that its
employees would receive varying bonuses based on their commissions at the end of the
year. Later offeror said that they would be paid the following March instead of at the end
of the year; at this time, offeree had reached the maximum tier of bonuses. Offeree
stayed at offerors company in reliance on the promise of a bonus. Offeree quit to accept

a position elsewhere the following January and offeror told her she would not get her
bonus.
Holding: Offer to enter into a unilateral contract cannot be withdrawn after the
offeree has tendered substantial performance.
An offeror may not withdraw an offer to enter into a unilateral contract where the
offeree has substantially performed.
Offeree had reached the top tier of bonuses by earning high commissions before
the offer was modified. She had substantially performed. Offeror unable to withdraw
at this point

Postponed Bargaining: The Agreement to Agree

When parties arguably intended to agree to be bound but have not determined all
terms or have left certain terms for postponed decision

NOT generally permitted under common law; UCC permits it

Walker v. Keith: Landlord leased to tenant for at 10-year term at $100/month with an
option provision for an additional 10-year term under the same terms and conditions with
rent to be fixed on the comparative basis of rental values reflected by the comparative
business conditions at the date of the renewal. Tenant gave proper notice to renew the
lease but the parties could not agree on the new rent.
Holding: There is no contract to renew because the parties have neither determined
a rent term nor determined a sufficiently certain method of calculating one.
An agreement must be sufficiently definite. Terms may be left for future
determination by a prescribed method
The parties agreed to agree to a rent figure, but this is not binding. The rent is a
material term to the lease. The provision that future rent would be based on
business conditions is too uncertain a method and so unenforceable.
Letters of Intent
The requirement that there is going to be a substantive formal agreement is not
determinative
o Formalistic language wont undue the parties intention to be bound
Must look at parol evidence to determine intention
Quake Construction, Inc. v. American Airlines, Inc.: Contractor orally notified that it had
been awarded the contract. Owners agent sent contractor a letter of intent to induce
contractor to enter into agreements with subcontractors and to induce subcontractors to
supply their license numbers. . At a preconstruction meeting, Jones told Quake, the
subcontractors, and government officials that Quake was the GC for the project.
Immediately following the meeting, American Airlines informed Quake that their
involvement was terminated.
Holding: The language of the letter is ambiguous as to whether the parties intended
to be bound; it is a question of fact for the jury
The parties intent should be determined from the language of the writing. If the
language is ambiguous, parole evidence is admissible to determine the parties
intent.

Intention to be bound is supported by the detailed terms of the letter, the


statement that the letter authorizes the work, the short time between when the
letter was sent and when work was to begin, and the cancellation clause suggesting
that the letter was something that might need to be cancelled. Intention not to be
bound is supported by the contemplated formal contract and the cancellation
clause.

Consideration
Defining Consideration

Benefit/Detriment Test
o Benefit to the promisor, OR detriment to the promisee
Bargain for Exchange Test
o Did the parties bargain for the promise or performance exchanged?
o Restatement 71 (2): Performance or return promise is bargained for if it is
sought by the promisor in exchange for his promise, and given by the
promisee in exchange for that promise
Promise given in consideration for x ; quid pro quo
Willistons Tramp Example: A benevolent man tells a tramp that if he goes around
the corner, he may there buy a coat on the mans credit. No reasonable person
would understand that the short walk was requested as consideration for the
promise but rather that in the event that the tramp go to the shop, the promisor
would make him a gift.

Hamer v. Sidway: Offeror promised offeree that if offeree would refrain from drinking,
using tobacco, swearing, and gambling until he was 21 years old, offeror would pay him
$5,000. Offeree notified offeror when he turned 21 that he had fully performed. Offeror
died without having paid the money to his uncle.
Holding: There was consideration. The offerees giving up his legal rights to drink,
use tobacco, swear, and gamble was a detriment to him that constituted
consideration.
Consideration is either some right, interest, profit, or benefit to the promisor or
some forbearance, detriment, loss, or responsibility given, suffered, or undertaken
by the promisee. Courts will not ask whether the consideration was of substantial
value to the parties.
Even though the offeree was in some way benefitted by the purported
consideration (the requested behavior), this is irrelevant because the offeree still
gave up a legal right in refraining from the requested activities.
Pennsy Supply, Inc. v. American Ash Recycling Corp.: The project specifications included a
notice to bidders that aggregate was available at no cost from this supplier.
Subcontractor informed supplier of the quantity needed and picked it up. The pavement
developed cracking and had to be redone. The aggregate was hazardous waste and
subcontractor had to incur disposal costs.

Holding: There was a contract. The consideration was the subcontractor picking up
the aggregate (this induced the promise, and the promise was induced by this).
The promise must induce the detriment and the detriment must induce the
promise.
Suppliers promise to supply subcontractor with aggregate free of charge induced
subcontractor to assume the detriment of taking title to the aggregate (and
assuming its disposal responsibilities), and it was this detriment which induced the
supplier to make the promise to provide free aggregate to the subcontractor.
o This is not a conditional gift situation because although there was no active
bargain, the promise induced the consideration and the consideration induced
the promise.

Applying the Consideration Doctrine

Adequacy of the consideration will not be judged


o Restatement 79: If the requirement for consideration is met, there is no
additional requirement of (b) equivalence in the values exchanged; or (c)
mutuality of obligation
Consideration motivation
Past consideration is no consideration

Dougherty v. Salt: Promisor gave promisee a promissory note for $3,000 on a printed
form stating Value Received (which is supposed to signify consideration), and said You
have always done for me, and I have signed this note for you. Now, do not lose it.
Holding: There was no consideration if the note was just a gift, no matter how it is
labeled, and it is not enforceable as a contract
Nothing is consideration that is not regarded as such by both parties.
The note was labeled value received, but there was no actual consideration for
the note. It was a voluntary promise of a gift to be executed in the future. The
promisor had a number of methods to make the note legally enforceable that she
failed to employ (executed gift, testamentary gift, gift in trust).
Batsakis v. Demotsis: Lender agreed to lend borrower 500,000 drachmae in exchange for
a letter in which the borrower promised to pay the lender $2,000 plus 8% interest at the
end of the war or when she could access her U.S. money. The drachmae were actually
worth $25.
Holding: There is consideration even though there was a disparate value.
Inadequacy of consideration will not void an otherwise enforceable contract.
The contract was essentially 500,000 drachmae in exchange for execution of the
written instrument. The borrower got exactly what she bargained for, regardless of
the disparity of value
Plowman v. Indian Refining Co.: Employer needed to lay off some of its workforce. ThenVP separately arranged with individual employees to keep the employees on payroll at
one-half their current salary, minus insurance premiums, if the employees retrieved the
check from the office, for their long and faithful service. Employees say VP told them the
payments would last as long as they lived; VP said he told them the payments were
terminable at the companys pleasure. VP did not have the authority to make this

arrangement and there are no records of it. A new VP replaced the one who made the
arrangement and the payments to employees stopped.
Holding: There was no consideration because there was no benefit to the promisor,
detriment to the promisee, or bargain for exchange.
Past consideration is no consideration. Consideration requires a benefit to the
promisor or a detriment to the promisee.
The employees long and faithful service cannot be consideration because it
happened before the promise was made and so had not been bargained for with
respect to the promise. Picking up the checks was not a benefit to the employer or
a detriment to the employees, but in fact was the opposite.
Agency issue: VP didnt have the authority. Continued issuance of the checks does not
imply acceptance by those who do have the authority.
Agency: A consensual relationship in which an agent agrees to act on behalf of, and
is subject to the control of, the principal
Principal is bound by the agent when the agent has actual authority
Agent has actual authority to take actions
o Expressly designated by principals manifestations
o Implied by principals manifestations
o Necessary/incidental to achieve principals objectives
When agent has no actual authority, principal may be bound if he gives the third
party reason to think that the agent has actual authority to do the act in question
(apparent authority)
When agent has neither actual nor apparent authority, principal is liable on a
contract that he learns the agent has entered him into and approves of

Contract Formation Under Article 2 of the UCC

UCC applies when there is a sale of goods


o If you cant hold it or move it, it is NOT a good
UCC deals with merchants (person who deals in goods) AND non-merchants
(consumers)
o UCC 2-104 (1): :Merchant means a person who deals in goods of the kind or
otherwise by his occupation holds himself out has having knowledge or skill
particular to the practices or goods involved in the transaction or to whom
such knowledge or skill may be attributed by his employer of an agent or
broker or other intermediary who by his occupation holds himself out as
having such knowledge or skill
Special rules for transactions between merchants
o Rationale: Bar is lowered for merchants; assumed that they have attorneys/
should know better
3 purposes of the UCC
o Make commercial law reflects the actual agreements between the parties
rather than applying formalistic principles
o The UCC likes to have commercial law reflect actual current business
practices
o The UCC imposes a duty of good faith to parties in commercial transactions

Mutual Assent Under the Uniform Commercial Code


2-206 Offer and Acceptance
o An offer to enter into a contract shall be construed as inviting acceptance in
any manner and by any medium reasonable in the circumstances
o An order or other offer to buy goods for prompt shipment shall be construed
as inviting acceptance by a prompt promise to ship or by prompt shipment
2-204
o (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.
o (2) An agreement sufficient to constitute a contract for sale may found even
though the moment of its making is undetermined.
o (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.
Jannusch v. Naffziger: P owned and operated Festival Foods (concessions truck and
trailer); P entered into an oral contract with D to sell Festival Foods for $150,000. D paid
10,000 and said they would pay rest once they got a bank loan. P cancelled lease where
the truck and trailer were stored. D backed out of the agreement. D admitted to taking
possession of the business, receiving income from it, purchasing inventory, replacing
equipment, and paying taxes and employees.
Holding: There was an agreement to sell Festival Foods, and Ds breached that
agreement
E.C. Styberg Engineering Co. v. Eaton Corp.: From 1998 to 2000, P manufactured a
custom brake assembly part for inclusion in Ds six-speed transmission motor vehicle
part. In 1999, the parties began negotiating an agreement under which Styberg would
produce large quantities of the part for Eaton. During this time several e-mail exchanges
and telephone calls between employees of both parties occurred that discussed quantity
and price. Lisa Fletcher, Ds employee, sent an email to Ps engineer committing D to
purchase 13,000 parts. However, P wanted a larger purchase commitment from D to
offset its capital investment in manufacturing the parts. Thereafter, no purchase order
was ever issued by D for the 13,000 parts.
Holding: There was no contract. The various discussions by e-mail, telephone, and
letter are evidence of continued negotiations NOT a contract
Parties usually made a purchase order their failure to do so suggests that they did
not have an agreement;
o Look at trade usage, course of dealings of prior transactions to determine
mutual assent
o We expect merchants to behave the way they have in the past

Irrevocability By Statute: The Firm Offer


Option contract; there does not need to be consideration to bind

2-205
o (1) An offer
o (2) By a merchant

o
o
o
o

(3)
(4)
(5)
(6)

To buy or sell goods


Singed and in writing
Which by its terms gives assurance that it will be held open
For a reasonable time not to exceed 3 months

Qualified Acceptance: The Battle of Forms


Why use the form?
o Limits the power of your agents (especially salespeople)
Problems with forms
o It is very common that they do not actually reflect the parities agreement
UCC 2-207 is intended to deal with written confirmations to an oral or informal
agreement or the exchange of order and acceptance forms (as in Princess or Brown
Machine)
2-207 applies to additional or different terms, NOT the consideration of the bargain
(ex. I will sell you X for $100 and I will buy X for $75 the $ is the consideration so
this is not the type of term it means)
UCC 2-207 Additional Terms in Acceptance or Confirmation
(1) An acceptance or written confirmation which is sent within a reasonable time is
an acceptance even if it states additional or different terms, unless acceptance is
expressly made conditional on assent to the additional or different terms
[Expressly made conditional construed narrowly Brown Machine]
(2) The additional [& different] terms are proposals for addition to the contract.
o Between merchants the terms become part of the contract unless:
The offer expressly limits acceptance to the terms of the offer,
They materially alter the offer, or
The offeror has already objected to them or objects to them a
reasonable time after they are received
o 2-207-2 different terms not mentioned; Courts split on how to handle this
o Some jurisdictions: Different terms never become part of the contract
o Others: Treat different and additional terms the same (based on
Comment 3)
o Others: Knockout rule all different or conflicting terms gets knocked
out of the contract
(3) Conduct by both parties that recognize the existence of a contract is sufficient
to establish a contract for sale even if the writings do not establish a contract. The
terms of such a contract are those terms on which the writings agree.
Terms that materially alter are those that result in surprise and hardship (ex. clause
negating standard warranties, but NOT clause setting forth sellers exemption due
to supervening causes beyond his control)
Terms that are proposals for addition to the contract the other party has to accept
each additional term for it to be part of the contract
Common Law Solutions to Battle of the Forms
Mirror Image Rule: Acceptance must exactly match the offer for there to be a
contract (otherwise the acceptance is a counteroffer)

o Restatement 59 A reply to an offer which purports to accept it but is


conditional on the offerors assent to terms additional to or different from
those offered is not an acceptance but is a counteroffer
Last Shot Rule: A party impliedly assents to and accepts a counteroffer by conduct
indicating lack of objection to it; last form governs the contract
o Criticism: The seller usually has the last form corporation gets to set up
terms and the buyers are always the losers (formalistic classical contract
law)

Princess Cruises, Inc. v. General Electric Co.: Buyer issued Purchase Order for services to
be performed by seller plus terms and conditions, with a proposed price of $260,000.
Seller received Purchase Order and sent buyer a Fixed Price Quotation with a detailed
service description and parts list plus its own terms and conditions, with an offering price
of $201,888. Seller sent buyer Final Price Quotation with price of $231,925 and sellers
terms and conditions, including limited liability to repair/replace defective goods or
damaged equipment resulting from defective service. Buyer gave seller permission to
proceed on the price in Final Price Quotation by phone. Seller sent confirmatory letter
restating price and specifying that sellers terms would govern the contract. During
services, the rotor was damaged, causing buyer to cancel two lucrative cruises. Buyer did
pay the full $231,925. Buyer sues for breach of contract.
Holding: The UCC would apply to a mixed contract predominantly for the sale of
goods with services incidentally involved. This is a contract predominantly for the
rendition of services with goods incidentally included, and so is governed by
common law.
In determining whether the UCC applies to a mixed contract, the predominant
purpose of the contract must be the sale of goods.
o Factors
(1) language of contract
(2) nature of the business of the supplier
(3) intrinsic worth of the materials.
The contract was principally concerned with the rendering of services. (
o 1) The language of the purchase order requested service functions and the
quotation was titled Quotation for Services, making it plain that the contract
was for services with parts supplied incidentally.
o (2) The seller company was a manufacturer of goods, but the sellers
correspondence came from their Installation & Service Engineering
Department, which provides service functions.
o (3) The intrinsic worth of the parts cannot be determined, but rather both
parties correspondence blend the prices together into the final price of a
services contract. There was a mixed contract primarily for services, so it will
be governed by common law.
The Purchase Order was an offer. The Final Price Quotation materially altered the
offers terms and was a counteroffer.
Buyer accepted the counteroffer with its phone call, by not objecting to the
confirmatory letter, and by paying the price of that counteroffer. That counteroffer
determines the terms of the contract, so sellers terms are part of the contract.
Brown Machine, Inc. v. Hercules, Inc.: Seller sent proposal to buyer containing
indemnification clause. Buyer sent purchase order to seller stating This order expressly

limits acceptance to the terms stated herein. Seller sent order acknowledgement to
buyer with the original and the indemnification clause. Buyer sent letter to seller stating
that the one specification should be changed and all other specifications were correct.
Seller sent buyer invoice.
Holding: There is NOT indemnification clause because of 2-207(1) and 2-207(2)(a).
Price quotes are generally not offers but rather offers to enter into negotiations.
Orders are generally offers to purchase.
Sellers purchase order was not an offer but rather an offer to enter into
negotiations.
Buyers purchase order was an offer.
Sellers order acknowledgement was an acceptance with additional terms that did
not expressly limit acceptance to buyers assent to these terms, and so it was an
acceptance and not a counteroffer.
Buyers offer stated that acceptance was limited to the offers terms, so the
indemnification clause is not part of the contract.
o If there is a counteroffer Accepted by express assent to those terms; if not
express assent but the parties continue as if there is a contract, go to 2207(3) and knock out any contradictory terms

Electronic and Layered Contracting

UCC may apply BUT may not be relevant


o 2-204 important predicate for formation
o 2-207 MIGHT come into play
Shrinkwrap terms: written terms and conditions that the purchaser finds when he
opens the box; usually contains a term that you have a certain number of days to
return the product or else you have accepted the terms
o Majority view (Easterbrook):
Consumers or buyers order is merely an invitation
Shipment of the goods with the terms constitutes an offer
The buyer accepts by keeping the item, OR rejects by returning the
items
o Minority view (Koceck)
o Buyers order is the offer
o Seller accepts by shipping the goods
o The shrink-wrap terms are the additional terms
Consumer buyer and merchant seller: The terms are not part of
the contract unless the consumer agrees to them
Merchant buyer and merchant seller: Follow 2-207 (2)
Clickwrap terms: Purchaser must scroll through and click I agree before they can
complete their purchase; must affirmatively signal their assent
o MOST objective manifestation of assent
Browsewrap terms: terms elsewhere on an Internet providers website;
o Likely binding when the buyer has reason to know of the terms
o UNLIKE clickwrap the buyer doesnt have to affirmatively signal assent
o LEAST objective manifestation of assent

Hines v. Overstock: Buyer returned a vacuum purchased from sellers retail website and
received a full refund, minus a $30 restocking fee. . The only link to these terms was
found at the bottom of the pages of the website, and it was not necessary for the buyer
to scroll to the bottom of any page she visited to complete her transaction. Buyer
initiated a class action lawsuit against defendant Overstock.com alleging that defendants
restocking fee amounted to a breach of contract. Seller claimed that the buyer also
agreed to arbitration.
o Holding: There was no agreement to arbitrate
o A contract requires a meeting of the minds and a manifestation of mutual assent;
the making of contracts over the internet DOES NOT fundamentally change the
rules of contract
o NO evidence that she was aware of the terms and conditions
o The buyer had NO constructive notice of the agreement
o UCC applies BUT is NOT relevant
DeFontes v. Dell, Inc.: Buyers brought a class action against Sellers. Buyer alleged that
when they purchased computers and software and accompanying Optional Service
Contract Sellers improperly imposed a tax on the service contracts. The optional service
contract provided for on-site repair and service of its computers with Dell often acting as
an agent for third-party service providers, including BancTec and QualxServ. Sellers filed a
motion to dismiss the complaints and argued that buyers were
with reasonable notice of the tax when they agreed to the terms and conditions by
accepting delivery of the goods.
o The purchaser is the offeror to buy the goods
o 2-204/ 2-206(1)(b)

[Liability in the Absence of Bargained-for Exchange]

Promissory Estoppel

Restatement 90
o A promise
o The promisor should reasonably expect to induce action or forbearance on
the part of the promisee
o Does induce such action or forbearance
o Injustice can be avoided only by enforcement of the promise
Rationale: Private autonomy

Promises Within the Family


Kirksey v. Kirksey: Promisors letter to promisee (widowed sister-in-law) stated, I would
advise you to obtain your preference, and sell the land and quit the country, as I
understand it is very unhealthy, and I know society is very bad. If you will come down and
see me, I will let you have a place to raise your family. Promisee received the letter,
abandoned her land, and moved to the promisors land. After 2 years, promisor required
her to move to another house and then required her to leave.
Holding: There was no breach because there was no contract; this was a gratuitous
promise.

One judge says that there was consideration (inconvenience to the promisee of
moving).
Majority says that there was not and this was a gratuity rather than a contract.
[Promissory estoppel not applied; too modern]

Harvey v. Dow: Parents (land owners) owned acres of land. The daughter and son
each had placed mobile homes on the property with their parents permission. Each of the
children understood that oneday some or part of the property would become theirs.
Daughter decided to build a house on the property. Father obtained the required building
permit and construction began. Father personally assisted in the building process. After
construction of the $200,000 home was completed, the relationship between daughter
and parents deteriorated. Daughter thereafter asked for a deed to the property on which
the home sat, but he refused. Daughter sued
Holding: The jury must decide if the facts meet the elements of promissory estoppel
Note Cases
Greiner v. Greiner: Promisor (mother) wrote to promisee (son) that she would make a
settlement with him to divide up a tract of land that she wanted him to move onto.
Promisee moved home onto the land. Promisor was going to give promisee title to the
land and write it in her will but her other son told her that if she did he would move off
the land, so promisor did not actually give promisee title or write it in her will but let him
continue to live there. Promisor then sued to recover possession of the land.
Holding: Under promissory estoppel the promisee has a right to the land
Promisor made a promise (manifestation of intention) by consistently expressing her
intention to give the land to the promisee (letter, separating the land, moving a
house onto the land for promisee, etc.). Promisor promised the land if promisee
moved home and so expected him to rely on getting the land if he moved. Promisor
did move home, made valuable improvements to the property, and lived on the
property for about a year. It is an injustice to now leave promisor homeless after
such reliance and expenditures.
Wright v. Newman: Promisor is neither the birth father nor adoptive father of promisees
son. Promisors name is on the birth certificate, the boy took promisors last name, and
promisor has held himself out as the boys father.
Issue: Whether there was a promise to provide child support that should be
enforced
Holding: Yes, promisors implied promise holding himself out as the boys father will
be enforced so that promisor pays child support
Promisors actions constituted an implied promise that he would assume the
obligations and responsibilities of fatherhood. Promisor should have reasonably
expected promisee to rely on his promise because he was otherwise acting as the
boys father for 10 years. Promisee did rely on the promise by not looking for and
seeking support from the birth father. There is an injustice to the promisee (who
now likely couldnt find the birth father and has no financial help in raising the boy)
and the boy (who has no father or $).

Charitable Subscriptions

Restatement 90(2): A charitable subscription or a marriage settlement is binding


under Subsection (1) without proof that the promise induced action or forbearance.
o Not widely accepted by the states

King v. Trustees of Boston University: BU sought to add Dr. Kings papers to its library. Dr.
King deposited some papers with BU, with a letter. Letter stated that King authorized
removal of most of his papers to BU and that it was his intention that at the end of each
year, more papers would be sent to BU. All papers sent to BU would remain Kings legal
property until otherwise indicated. If, despite scrupulous care, the papers were lost or
damaged, BU was absolved from liability. King stated that it was his intent to each year
name a portion of the papers to become the absolute property of BU as an outright gift,
until all papers belonged to BU, and that in the event of his death all materials deposited
with BU became BUs property.
[This court rejects 90(2), which does not require consideration or reliance for a
charitable subscription].
Holding: There is evidence that this is an enforceable charitable subscription
A charitable subscription is an oral or written promise to do certain acts or to give
real or personal property to a charity for a charitable purpose.
To enforce a charitable subscription there must be a promise to give some property
to a charitable institution and that the promise was supported by some reliance.
The bailment relationship created by the letter provides evidence of a donative
intent. Evidence that BU indexed the papers, made them available to researchers,
and provided and trained staff to care for the papers show reliance or consideration
for the promise.

Promises in a Commercial Context


Katz v. Danny Dare, Inc.: Employee worked for employer for 25 years. He was injured on
the job, by a man stealing money from employers store, and was impaired physically and
mentally. Employer negotiated with employee for 13 months to induce him to retire.
Employee accepted a pension plan of $13,000/year for life that was approved by the
Board of Directors. Employee then retired in reliance on the resolution and employer
began making payments as negotiated. Employer intended for employee to rely but
claimed that he had planned on firing him if he did not retire. Employee began working
part-time elsewhere and then worked part-time for employer again. Employer sent him a
payment that was only half of the agreed pension. Employee sent it back. Employer
stopped sending payments.
Holding: The pension plan is enforceable under promissory estoppel
The resolution was a promise. Employer made the promise intending for employee
to rely on it by retiring. Employee did rely by retiring.
It does not matter that employer was planning to fire employee if he did not take
the pension because they chose not to. It is an injustice not to continue the
payments now that he is otherwise unable to support himself.

Aceves v. U.S. Bank, N.A.: Plaintiff obtained a home loan from Option One Mortgage
Corporation (Option One) secured by a deed of trust on the residence. Thereafter, Aceves
loan was transferred to U.S. Bank, N.A. (defendant). Aceves could no longer afford the
monthly mortgage payments and U.S. Bank sought to foreclose on the property. Aceves
then filed for bankruptcy under Chapter 7which imposed an automatic stay on the
foreclosure proceedings (they couldnt evict from her home court is going to manage
the liquidation process). After speaking with a U.S. Bank representative who informed her
that the bank would work with her on a mortgage reinstatement and modification, Aceves
considered converting the Chapter 7 bankruptcy into a Chapter 13 bankruptcy (would
allowed her to keep the residence and pay the owed amount over a period of time),
However, U.S. Bank persuaded Aceves to forgo bankruptcy altogether so that it could
proceed with a loan modification. After the automatic stay was lifted U.S. Bank scheduled
Aceves home for public auction. Around the same time, a loan servicer, on behalf of U.S.
Bank, mailed documents to Aceves for her to complete in order to proceed with a
mortgage modification. The day before the public auction, a negotiator proposed a
monthly mortgage payment that nearly doubled what Aceves was previously paying.
Aceves rejected the offer. Aceves home was sold at auction and she was required to
vacate the premises. Aceves filed suit.
Holding: Court reversed trial courts dismissal of Aceves promissory estoppel claim.

Limiting the Offerors Power to Revoke: The Effect of Pre-acceptance Reliance

Classical Theory: An offer is revocable anytime until the offeree accepts


Restatement: Once you begin to perform in response to a unilateral offer you are
entitled to complete it
Question here: Is the pre-acceptance reliance a sufficient proxy for acceptance of
the offer?
Restatement 87:
o (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.
o (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.
Majority Rule (Drennan): The sub-contractor is bound to the prime-contractor, the
prime-contractor is not bound to the sub-contractor
James Baird Co. v. Gimbel Bros., Inc.: Supplier sent an offer to supply linoleum to many
contractors likely to bid on a particular job, guaranteeing that the contractor awarded the
contract would have those prices and offering these prices for reasonable prompt
acceptance after the contract has been awarded. Contractor factored suppliers offer
into his bid. Supplier realized it had miscalculated and sent out a withdrawal, which
contractor received after bidding. Contractor awarded the job a couple days later and
then formally accepted suppliers offer. Supplier does not recognize a contract because of
the withdrawal.
Holding: There was no contract because the offer was withdrawn before it was
accepted.

Promissory estoppel does not create an option contract because there was no
promise.
Contractor did not accept the offer by using it in the bid, but by communicating
acceptance to the supplier. The offer was withdrawn before it was accepted so there
is no contract. Promissory estoppel requires a promise, and here there is an offer for
exchange (which is not meant to become a promise until consideration is received).

Drennan v. Star Paving Co.: Contractor received subcontractors bid the day general bids
were due. It was customary for contractor to receive bids on the day of and use them to
compute their bids. Subcontractor bid and contractor computed his bid according to this
number, and was then awarded the job. Subcontractor then said the price was a mistake
and they could not do the work for that price. Contractor had to find another
subcontractor but still had to pay more for the work.
Holding: All elements of promissory estoppel are met and the reliance makes the
promise binding.
There was no option contract (no separate consideration) and no bilateral contract
(no acceptance).
Subcontractors offer was a promise to perform on certain conditions. Subcontractor
had reason to believe that if its bid was the lowest, it would be use by contractor.
Contractor relied on the promise by using it in computing his own bid and naming
the subcontractor, binding himself to use it. Injustice can only be avoided by
enforcing the promise because the subcontractor made the mistake and the
contractor should not be made to bear that financial loss.
Berryman v. Kmoch: Sellers option agreement stated, For $10 and other valuable
consideration, I grant you an option for 120 days after date to purchase the real estate.
$10 was never paid. Seller sold to someone else. Buyer went to bank to arrange to buy
the land and was informed that it had been sold. Buyer attempted to exercise option.
Holding: There was no consideration so there was no contract. Seller had no
expectations of the buyers reliance so promissory estoppel cannot be used to
enforce it.
An option contract must be supported by consideration to be binding
Seller had no reason to expect the buyer to rely on his promise by expending
money and effort to find a buyer, so promissory estoppel cannot be used to enforce
the promise.
The $10 is not consideration because it was not paid. The other acts done by the
buyer are not consideration because the seller, though perhaps motivated by the
fact that the buyer would expend energy to sell the land, did not bargain for him to
do this and he was not required to do it.
Pops Cones, Inc. v. Resorts International Hotel, Inc: Lessee and lessor had several
discussions about lessees business possibly relocating to lessors space. Lessee informed
lessor that she had to decide whether to continue her current lease by Oct. 1. Lessor told
lessee that they were 95% there and that all she needed was the COOs signature, and
advised lessee to plan on moving. Lessee moved out of current location, closed business,
and put equipment in storage. Lessor sent proposed form of lease and written offer to
lessee that stated it was not binding on the lessor. Lessor then withdrew its offer. Lessee
was able to re-open elsewhere but at a loss.

Holding: The promise can be enforced, because every element of promissory


estoppel is satisfied.
Lessor promised lessee that the lease would be signed and advised lessee to move
out of its current space. Lessor should have expected lessee to rely on this because
the lessee repeatedly told the lessor that she was relying exactly as instructed.
Lessee did rely to her detriment by leaving its location, closing its business, using
storage, etc. There is an injustice because the mom & pop store was screwed over
by the corporation and lost profits and time to be in business.

Principle of Restitution

Implied-in-fact contract agreement that typically meets all the requirements of a


contract but is not express or formal (but can be inferred from circumstances) -(expectation damages)
Implied-in-law / quasi contract obligation imposed by law without either party
agreeing --(restitution)

Restitution in the Absence of a Promise

Offisciousness interference in the affairs of others not justified by the


circumstances under which the interference takes place
Restatement of Restitution 116: A person who has supplied things or services to
another, although acting without the others knowledge or consent, is entitled to
restitution therefor from the other if
a) He acted unofficiously and with the intent to charge therefor, and
b) The things or services were necessary to prevent the other from suffering
serious bodily harm or pain, and
c) The person supplying them had no reason to know that the other would not
consent to receiving them, if mentally competent, and
d) It was impossible for the other to give consent, or, because of extreme youth
or mental impairment, the others consent would have been immaterial
Restatement of Restitution 117: A person who, although acting without the others
knowledge or consent, has preserved things belonging to another from damage or
destruction, is entitled to restitution for services rendered or expenditures incurred
therein, if
a) He was in lawful possession or custody of the things or if he lawfully took
possession thereof, and the services or expenses were not made necessary
by his breach of duty to the other, and
b) It was reasonably necessary that the services should be rendered or the
expenditures incurred before it was possible to communicate with the owner
by reasonable means, and
c) He had no reason to believe that the owner did not desire him so to act, and
d) He intended to charge for such services or to retain the things as his own if
the identity of the owner were not discovered or if the owner should disclaim,
and
e) The things have been accepted by the owner
Posners argument The law should reflect transaction costs. When transaction costs
are high (like someones life), the law should assume that the parties would have
entered into the agreement and impose restitution. When transaction costs are low,

the law should assume that parties would not have entered into the agreement and
not impose restitution.
Credit Bureau Enterprises, Inc. v. Pelo: Patient made threats of self-harm and purchased a
shotgun; police took him to a hospital. County magistrate found that he was seriously
mentally impaired and likely to injure himself, and entered an emergency hospitalization
order. Patient refused to sign a form that would make him or his insurance liable for the
bill. Patient ultimately signed form when woken up at 5am by a nurse and told that he
would not get his belongings back if he did not sign it. Patient released from hospital a
few days later. Hospital sought payment for medical services during his stay.
Holding: The patient is liable for the cost of services by restitution under Restatement
fof Restitution 116
Patient argues that he did not consent and that he received no benefit from the
services. The hospital unofficiously and with the intent to charge supplied him with
mental health services. The services were necessary to keep him from hurting
himself. The patients claim that he did not consent and made this clear is irrelevant
because he was mentally incompetent.
Commerce Partnership 8098 Limited Partnership v. Equity Contracting Co.: Owner hired
general contractor, who hired subcontractor. Owner inspected subcontractors work as it
progressed and when work was finished, gave subcontractor a punch list of remedial
work. Subcontractor asked owner for partial payment but owner said he could not do that,
and subcontractor did not complete the punch list. Subcontractor was never paid.
Subcontractor sued general contractor, but it was bankrupt. Subcontractor alleged that
the owner did not pay the general contractor. Owner gave evidence that the general
contractor was paid $223,065.04 and the negotiated price was $256,894, and was
precluded from presenting evidence that owner also made some payments to other
subcontractors that would bring the total amount paid over the negotiated price.
Holding: Whether the owner was unjustly enriched by the subcontractors work
depends on whether the owner paid anyone for the subcontractors work
A cause of action for a contract implied-in-law requires that
o (1) the plaintiff has conferred a benefit on the defendant,
o (2) the defendant has knowledge of the benefit,
o (3) the defendant has accepted or retained the benefit conferred, and
o (4) the circumstances are such that it would be inequitable for the defendant to
retain the benefit without paying fair value for it.
A subcontractor may maintain such an action against an owner if
o (1) the subcontractor had exhausted all remedies against the general
contractor and still remained unpaid and
o (2) the owner had not given consideration to any person for the
subcontractors work.
The subcontractor has a claim if it can prove that the owner did not pay a total
amount to the general contractor and any subcontractor that included payment for
this subcontractors work.
Watts v. Watts: James indicated to Sue that he would provide for her if she would quit her
job and move in with him. Sue did so and the couple held themselves out as husband and
wife, she assumed his last name, gave birth to 2 children who also assumed his last
name, they took out insurance as husband and wife, and they purchased real and

personal property as husband and wife. Sue contributed childcare and homemaking
services, served as a hostess for James business, and worked 20-25 hours/week as a
receptionist for him. James indicated orally and through his conduct that she would share
equally in the increased wealth.
Holding: There is evidence supporting the claims of a contract or a contract impliedin-law
Contracts are not generally enforced where the sole consideration is sexual
relations but a bargain between two people may still be upheld between parties
with a sexual relationship so long as it is independent of the relationship.
Unjust enrichment requires (essentially the same as Commerce Partnership)
o (1) a benefit conferred on the defendant by the plaintiff,
o (2) appreciation or knowledge of the benefit by the defendant, and
o (3) acceptance or retention of the benefit by the defendant under
circumstances making it inequitable for the defendant to retain the benefit.
There is evidence for an express contract, Sues change in circumstances may
indicate an agreement and the money, property, and services provided by Sue may
be adequate consideration.
There is also evidence for unjust enrichment. Sue contributed property and services
to the relationship that increased the parties assets. James knew that Sue expected
to share in this accumulated wealth and accepted her services. It is unjust for James
to retain all of the wealth while Sue retains nothing from the relationship where she
is no more at fault for it ending than he is.

Promissory Restitution

Recipient of benefits does make an express promise to pay for the benefits after they
are received
Past consideration generally does not make a promise legally enforceable with
certain exceptions for pre-existing legal duties:
o Restatement 82 Express or implied promises to pay debts barred by statute
of limitations are enforceable
o Restatement 83 Express promise to pay debts previously discharged in
bankruptcy is legally enforceable
o Restatement 85 Contracts made by a minor are unenforceable before the
minor reaches the age of majority unless they are for necessaries; the minor
becomes legally liable for other contracts that the minor affirms or fails to
disaffirm when he reaches the age of majority
Restatement 86
(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 benefits 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
Material Benefit Rule: If a person receives a material benefit from another, other than
gratuitously, a subsequent promise to compensate the person for rendering such
benefit is enforceable

Mills v. Wyman: Promisors adult son was ill after a voyage and promisee found and cared
for him. After expenses were incurred, promisor wrote a letter to promisee promising to
pay for the expenses of caring for his son. Promisor never paid.
A promise made after the fact for benefits received by the promisors adult son is
unenforceable
A moral obligation is only a surrogate for legal consideration where there is a preexisting legal duty.
The promisors son received the benefit, but he is past the age of majority and the
promisor has no duty to care for him. There is no preexisting legal duty such that the
moral obligation replaces a legal consideration.
Webb v. McGowin: : Promisee was dropping large pine blocks off an upper floor of a mill in
the course of his employment. He realized that the block he was moving would fall on and
severely injure or kill the promisor, below, if he dropped it. The only safe and reasonable
way to prevent serious bodily harm or death to promisor was to hold and fall with the
block, diverting it from hitting the promisor. Promisee was crippled from the fall. Promisor
promised to pay him $15/week to support him for the rest of his life. Promisor made these
payments until his death. The payments continued for a few weeks after his death and
then stopped.
The promise to pay for benefits received is enforceable
A moral obligation is sufficient consideration for a subsequent promise to pay where
the promisor has received a material benefit from the promisee
The promisors agreement to pay and the promisees acceptance of payment show
that the services were not gratuitous. The promise is enforceable because the
promisor received a material benefit, his life, from the promisees services and
subsequently promised to pay in recognition of this

[The Statute of Frauds]

Rationale: evidentiary function, causes the parties to reflect on the agreement, makes
it easier to see if the agreement is enforceable
There is no one statute of frauds
o Jurisdictional
o Topic-dependent
Certain types of contracts must be in writing to be legally enforceable
o Generally the writing must:
Identify the subject matter
Indicate that some type of agreement has been made
State essential terms, usually
o Price
o Quantity
o Delivery date
Basic Statute of Frauds Analysis:
o Is there a statute of frauds that requires that this contract be in writing?
o If yes, is there a sufficient memorandum that complies with the statutory
requirement? (Is there a writing that meets the statutory requirements that
reflects the non-performing partys assent?)
o If a statute covers it but a sufficient memorandum is lacking, is there an
applicable exception to the SOF?

Restatement 110(1):
(a) A contract of an executor/administrator to answer for a duty of his decedent (any
agreement not to be enforced during the lifetime of the promisor)
(b)Suretyship Provision A contract to answer for the duty of another (Suretyship
I will be responsible for the debt or liability of another)
(c) Marriage Provision A contract made in consideration of marriage (like a dowry,
not a marriage license)
(d)Land Contract Provision A contract for the sale of an interest in real property
Usually long term (>1 year) leases have to be in writing
Restatement 129: A contract for the sale of land that does not comply
with the statute of frauds may be enforced when the party seeking
enforcement satisfies promissory estoppel
(e) One-Year Provision A contract that is not to be performed within one year (if
there is any conceivable way that the contract can be performed in the next 365
days, there is no requirement to put it in writing)
Restatement 131: A contract under the statute of frauds is enforceable if it is
evidenced by any writing, signed by or on behalf of the party to be charged, which
(a) Reasonably identifies the subject matter of the contract
(b)Is sufficient to indicate that a contract with respect thereto has been made
between the parties or offered by the signer to the other party
(c) States with reasonable certainty the essential terms of the unperformed
promises in the contract
Restatement 129: [The Land Contract Provision]
o A contract for the transfer of an interest in land may be specifically enforced
notwithstanding failure to comply with the Statute of Frauds if it is established
that the party seeking enforcement, in reasonable reliance on the contract and
on the continuing assent of the party against whom enforcement is sought, has
so changed his position that injustice can be avoided only by specific
performance
Restatements do not preclude promissory estoppel arguments from being made

Crabtree v. Elizabeth Arden Sales Corp.: P negotiated an employment contract for a sales
manager position with Elizabeth Arden Sales Corporation (Defendant). P accepted Ds
offer of a two-year contract based on an annual salary of $20,000 for the first six months,
$25,000 for the second six months and $30,000 for the second year plus expenses. Ms.
Ardens personal secretary prepared a memorandum on a telephone order blank. A payroll change card was prepared and initialed and forwarded to the payroll department.
Crabtree received the first scheduled increase but Arden refused to approve the second. P
filed a complaint for breach of contract. D denied the existence of any agreement to
employ P for two years and further contended that, even if one had been made, the
statute of frauds barred its enforcement. The trial court found in favor of P and awarded
damages of $14,000. D appealed and the Appellate Division affirmed.
Holding: The writing requirement may be met by several documents both signed and
unsigned and their relationships may be established by oral testimony
o The court held that it would permit the signed and unsigned writings to be read
together, provided that they clearly refer to the same subject matter or
transaction.
It DOES NOT matter that the writings were not prepared or signed with the intention of
evidencing the contract, or that they came into existence subsequent to its execution.

The statute of frauds demands that they were signed with intent to authenticate the
information on the writings, and that such information DOES evidence the terms of the
contract.
Beaver v. Brumlow: Buyers entered into an oral agreement with Seller to purchase a
parcel of real property located on the sellers 24-acre tract. Buyer was employed at
sellers business. Buyer and seller walked and marked off the specific boundaries of the
proposed parcel of property to be sold. Additionally, the buyers cashed in their IRA and
401(k) retirement plans to pay for the home and improvements. The buyers placed a
mobile home on the proposed property, spent approximately $85,000 making
improvements, and moved in. No formal sale documents were prepared because the
sellers learned that their mortgage contained a due-on-sale clause that required the
entire amount to be paid when the land was sold. When the buyers consistently
requested that a contract for the sale be formalized, they were told, we will work it out,
by the sellers. Although a date was never mentioned for the sale of the property and a
price was never determined, the buyers had stated that they would pay the market price
for the land. After leaving the employment of the Beavers and working for a competitor,
the relationship between the buyers and sellers deteriorated. Thereafter, the sellers
changed their minds about selling the land to the buyers and, instead, attempted to lease
the property to them. At that point the buyers had been living on the property for nearly
three years. The sellers also attempted to eject the buyers from their property. The
buyers brought suit against the sellers to enforce the oral agreement to purchase the
property. At trial, the sellers argued that the statute of frauds barred enforcement of the
oral agreement. The trial court disagreed and ordered specific performance of the
contract to sell the property. The sellers appealed.
Holding: Trial court judgment affirmed
Court uses same basic analysis as Restatement 129
Part performance: Took possession of the property by bringing their mobile home
onto the land, made substantial improvements by skirting the mobile home, adding
a septic tank, and landscaping

The Sale of Goods Statute of Frauds: UCC 2-201


UCC 2-201
(1)A contract for the sale of goods for $500 or more in not enforceable without
sufficient writing. A writing is not insufficient because it omits or incorrectly
states a term in the contract but a contract is only enforceable for the quantity
of goods shown in the writing.
o [MUST HAVE evidence that it is a contract for sale of goods, the signature of
the party against whom enforcement is sought, and the quantity of goods]
(2)Between merchants if a writing is received by one party who has reason to know
its contents, it is sufficient for an enforceable contract if not objected to within
10 days

Merchant confirmation exception one of the merchants must send a


confirmation of the contract in writing within a reasonable period of time
after the contract was formed that must be sufficient against the sender. If
it meets these requirements it is sufficient to comply with the statute of
frauds even though the recipient does not sign it, but it is not necessarily
conclusive that there was a contract.
(3)A contract that does not satisfy (1) but is otherwise valid is enforceable
(a) If the goods are specially manufactured and not suitable for sale to others
(b)If the party against whom enforcement is sought admits in court that a
contract for sale was made
(c) For goods for which payment has been made and accepted of which have
been received and accepted
[Partial performance validates the contract only for the goods that have
been accepted or for which payment has been accepted]

Buyer rented 5 barns from seller then negotiated to purchase them, with an oral
agreement to do so. Buyer tried to get a loan and told seller that he would then pay for
them with one payment rather than in installments; buyer did not get the loan and
reconfirmed the earlier agreement. Buyer had made improvements to the barns and held
them out as his own. Buyer arranged with other people to purchase the barns from him.
Buyer gave seller a check to seller dated, payable to seller, signed by buyer, and for
the five barns. Seller called buyer the next day and told buyer she didnt want him to sell
them to other people. A few days later seller mailed buyer back the check, ripped up.
Check was an insufficient writing because the party against whom the contract was to
be enforced had not signed it. The parties partial performance made the contract
enforceable.
The writing was insufficient because it was not signed by the party against whom it
was to be enforced. However, the buyer had told people that he had purchased the
barns, reimbursed the sellers for insurance on the barns, paid for improvements, took
possession of the barns, and sought to sell the barns. The buyer delivered a check to
the seller, which was accepted by the seller and not returned for four days. This
constitutes partial performance and the contract is enforceable.