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Vangilder Contracts Outline- Schmitz

Vangilder Contracts Outline- Schmitz - CONTRACTS OUTLINE...

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CONTRACTS OUTLINE VanGilder 1 Prof. Schmitz Does the UCC or Common Law Apply? (What is the predominant purpose?) Is there a contract? Contract (K) = offer + acceptance + consideration If so, what are the terms? If not, are there other ways to enforce the agreement? Consideration A. Functional Analysis 1. Consideration shows the parties acted deliberately—INTENT 2. Consideration is evidence or proof of the promise, that the party meant what he said 3. Helps determine remedies 4. Keeps courts efficient (prevents open floodgates) B. Gold Standard— R2d § 71 1. Bargained for exchange (external manifestation rather than undisclosed mental state) 2. Inducement to the promisor (benefit to promisor or detriment to the promisee) a. measured by the reasonable persons standard b. may consist of 1) Act other than a promise (including money) 2) Promise to pay works 3) Detriment or Forbearance (declining a legal right) a) Hamer v. Sidway (drug and alcohol free nephew)—A promisee does not have to suffer harm for there to be consideration. It is enough that something is promised, done, forborne, or suffered by the party to whom the promise is made as consideration (here, there was inducement because nephew abstained from drinking, gambling, etc. Uncle benefited by gaining family pride.) 4) creation, modification, or destruction of a legal relation (restriction of a legal right) 3. Must be proportional 4. No pre-existing duties 5. Not gratuitous a. Squishy promises are often gratuitous b. Cash v. Benward (promise to mail insurance application) —An oral expression to aid or assist someone, when unsupported by consideration or bargaining, is an unenforceable promise. (here, no inducement or bargained for exchange) C. Consideration for Option Contracts 1. When there is gross disproportion between payment and value of the option, there is no consideration— R2d § 87, comment b. 2. When an option is supported by adequate consideration, it becomes its own meta contract Consideration Substitutes (other mechanisms that serve the same function as consideration) A. Past Performance Doctrine based on Moral Obligation R2d § 86 1. A promise made in recognition of a benefit previously received is binding only to the extent necessary to prevent injustice (prevents unjust enrichment) a. Webb v. McGowin (saved from a falling block)—A moral obligation is a sufficient consideration to support subsequent promise to pay where the promisor has received a material benefit (here, $15 every 2 weeks is a proportionate payment for serious bodily harm)
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CONTRACTS OUTLINE VanGilder 2 Prof. Schmitz b. Harrington v. Taylor (blocked an axe with her hand)—No consideration for the promise to pay and that the plaintiff had not engaged in her humanitarian act with an expectation of compensation 2. Promise for benefit previously received NOT binding if: a. Gift or no unjust enrichment b. Value is disproportionate to the benefit received B. Promissory Estoppel Doctrine based on Detrimental Reliance— R2d § 90 1. A promise which the promisor should reasonably expect to
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Vangilder Contracts Outline- Schmitz - CONTRACTS OUTLINE...

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