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Unformatted text preview: Brian Burgess Contracts Outline I. Objective Theory of Contract • Reasonable objective interpretation of party’s actions govern questions of contract formation and terms, including offer, acceptance, etc., rather than subjective intent. • For obligation to be enforceable, must be reasonable belief of commitment or agreement based on objective interpretation of party’s actions. • Rule: Signed document is binding (as evidence of objective manifestation of assent) in the absence of fraud, duress or mutual mistake (Ray v. Eurice Bros.) (Park 100 ). Signor has obligation of ordinary care before signing (Skirbina ). Agency • In agency relationship, one party (agent) acts on behalf of another party (Principal) on basis of their mutual consent. Agent is subject to control by Principal • Agency law with manifestation by principal that agent shall act on her behalf, agent’s acceptance of undertaking, and understanding by both parties that principal shall be in control of undertaking • Agent can only act beyond bounds with knowledge of principle’s intention • The scope of the agent’s authority may be more or less broad to act in certain capacities o For instance in battle of forms context, employees are given sufficient agency capacity to take and make orders, forming contracts. However, the scope of their agency does not extend to altering the standard terms of the agreement. • Agent and principal are equally liable with respect to third-party for action within the scope of the agency. Actual authority vs. Apparent authority • Claim against principle can be made if either actual or apparent authority is established. • Actual authority is grounded in agent’s perspective- • Principal actually granted authority to agent. o It may be implied or explicit; usually encompasses authority needed for agent to complete assigned task. o Not required for third-party to be aware of this authority. o President of corporation has implied authority to execute contracts reasonably necessary to operation of business, though not unusual contracts involving significant assets (as likely in Plowman ). • Apparent authority is grounded in third-party’s perspective o Words or conduct of the principal would cause a reasonable third-person to believe agent’s authority was authorized. Principal obliged to police the agent. o Authority must come from words or actions of the principle for it to be bound by K, though there may be a PE remedy available. • Principal may also be bound if it subsequently ratifies agent’s activity and contract formation by approving of it. Principal then bound to contract. o Subsequent words or actions by principal inducing reliance may also create grounds for estoppel....
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This note was uploaded on 04/04/2008 for the course LAW ALL taught by Professor Multiple during the Fall '06 term at NYU.
- Fall '06
- The Land