Tamira Roberson Contract Case Briefs Cite: Andrew Ricketts v. Katie Scothorn, 57 Neb. 51, 77 N.W.

365-illustrates reliance (Supreme Court of Nebraska)(1898) Procedural Posture: Plaintiff, Katie Scothorn, recovered judgment against defendant Andrew D. Ricketts. Defendant Ricketts appealed ruling of the District Court of Lancaster County. Overview: Defendant, Andrew D. Ricketts is the executor of the last will and testament of John C. Ricketts. John C. Ricketts is the grandfather of plaintiff Katie Scothorn. The action was brought based on a promissory note written by John Ricketts. John Ricketts told plaintiff that he promised to pay her 2,000 on demand with 6% interest. The promissory note was dated May 1, 1891. Plaintiff alleges that in consideration of the note, she quit her job as a bookkeeper (accountant) for Mayer Bros. and ceased to work for a living. She alleged that the note was given to induce her to abandon her employment and by relying on it as a mean of support. The material facts are undisputed. The allegations of the petition are denied by Andrew D. Ricketts (defendant). Issue: Whether there is reliance by the plaintiff upon the promise made by Mr. Ricketts since it was a gift and there was no consideration in giving the gift. Rule: Even when an agreement lacks consideration, a promise may still have a right to enforce the agreement given certain limitations. Facts: Grandfather died on June 8, 1894-he had paid interest on the loan and had expressed regret on not being able to pay the rest of the note. Mr. John Ricketts expressed to his granddaughter that he was intended to pay off the debt once he sold his land in Ohio. Mr. John Ricketts supported Stockhorn in going back to work once he fell on hard times and was not able to pay on the principle on the note and Mr. Ricketts helped her get a job. Reasoning: plaintiff quit her job when she found out her grandfather gave her a gift that did not appear to be a contract. There was no consideration by the plaintiff in regards to quitting her job. She didnt need to quit in order to be entitled to the money. However, the grandfather did suggest it. Because the plaintiff altered her plans based on the faith of the note, the court found that it would be inequitable not to have the executor of the grandfathers will to pay the debt to the granddaughter. This is based on estoppel- the court stopped the estate from saying there was no obligation. Result: Supreme Court affirmed.

Bailey v. West, 105 R.I. 61, 249 A.2d 414 (1969). Facts: West (D) purchased a horse named Bascoms Folly from Dr. Strauss. West discovered on arrival that the horse was lame and ordered that the horse be returned to Strauss. Strauss refused to accept the horse and the driver brought the horse to Baileys (P) farm where the horse remained for over four years. Bailey sent bills for the horses care to West who returned them with the notation that he did not own the horse. Bailey sued West and the trial court held that an implied in fact contract to board the horse existed between the parties. The court held that the contract was in force until Bailey received notice from West that he would not pay for the boarding of the horse. The court determined that the contract had been in force for five months and awarded the cost of boarding the horse for that period. Bailey appealed and West cross appealed. Issue: May a volunteer recover for a benefit conferred under quasi-contract? Holding and Rule: No. A volunteer may not recover for a benefit conferred under quasicontract. In this case there was no implied in fact contract because there was no evidence that the parties ever actually intended to contract. If performance is rendered by one party without request by another, that person will generally not owe a duty to compensate the performing party. In this case Bailey was aware of the controversy regarding the horses ownership when he accepted the horse for boarding and he cannot reasonably expect to be compensated. West immediately notified Bailey that he would not be responsible for the horses care after receiving the bill for services and did not acquiesce to the conferment of a benefit upon him. Bailey acted as a mere volunteer and acted at his own risk that he might not be compensated. Disposition: Remanded Baileys appeal denied, Wests cross appeal sustained.

Cite: Dews v. Halliburton Industries 288 Ark. 532, 708 S. W. 2d 67 (1986)

Procedural Posture: Defendant Lyle Dews was found to be responsible for debt acquired by Halliburton Industries Inc. in the drilling of an oil well that amounts to approximately $519,397.40. Due to Massey not appearing in court, the Trial court found that Massey and Dews were jointly liable for the companies claims. Overview: Defendant, Lyle Dews had an executed a farmount agreement for leases from Crystal Oil Co. Terms of the lease required that Dews, at his expense, drill a test well by May 15, 2982 and continue drilling to a depth sufficient to test the Cotton Valley Formation. Crystal reserved an overriding royalty interest. However, if production was obtained, then Dews would be assigned an interest in the leasehold estate. Dews paid no consideration for this farmount. Dews then entered into an agreement with Bruce Massey whereby Massey would pay the Dews $50,000 in exchange for Dews assigning Massey his right to the leasehold estate under the Crystal-Dew agreement. Dews reserved a 5% of the leasehold estate as an overriding royalty interest. In return Dew agreed to have the well be drilled. Drilling was completed before deadline and Crystal signed over leases. However, Massey contracted the work to be done, but since he had not fulfilled his contractual obligation of $50, 000, Dews didnt turn over the leases as he had agreed with Massey. Companies responsible for drilling filed suit against Massey in attempt to collect money and then Dews was brought in as a party defendant and Dews then cross claimed against all the companies. Issue: Whether defendant was liable for expenses created by a contract with a third party.

Rule: Plaintiff can be held liable under a quasi contract theory. Reasoning: Dews was aware that Massey was in breach of their contract, but allowed the worked to continue in hopes that his contractual obligation would be fulfilled. It was demonstrated that Dews was aware that the companies were performing a valuable service to the well. Massey authority to contract the work came from the same contract that he breached, therefore, Dews was entitled to not stand by and watch the companies perform labor.

Result: Supreme Court affirmed.

Embry v. Hargadine, McKittrick Dry Goods Co., 127 Mo.App. 383, 105 S.W. 777 (Mo. App. 1907). this is the second time this court dealt with this matter. Facts: Embry (P) was an employee of Hargadine, McKittrick Dry Goods [textile, fabric company] (D). He was paid $2,000 per year and was responsible for the sample department. A written employment contract between the parties expired on December 15, 1903. A meeting occurred eight days later at which Embry said that he would seek work elsewhere unless his contract was renewed. Hargadines president, McKittrick, told Embry Go ahead, youre all right. Get your men out and dont let that worry you. Embry remained with the company until he was fired on February 15th. McKittrick denied having told Embry not to worry about his employment contract. At trial the court gave a jury instruction regarding contract formation and refused Embrys proposed instructions. The jury was instructed that it was necessary for both parties to have had a subjective intent to contract or there would be no contract. The jury returned a verdict in favor of D and P appealed based on the jury instruction. Issue: May a contract be formed without reference to the subjective intentions of either party? Holding and Rule: Yes. A contract may be formed without reference to the subjective intentions of either party. To form a valid contract there must be a meeting of the minds and both parties must agree to the same thing in the same sense. If a man conducts himself such that a reasonable person would believe that he was assenting to the terms proposed by another party, and that other party upon that belief enters into the contract, that man would be equally bound whether or not he had actual subjective intent. Therefore if what McKittrick said would have been taken by a reasonable man to be an employment contract, and P understood it as such, it constituted a valid contract of employment for the ensuing year. McKittricks subjective intent was not relevant. Disposition: Reversed and remanded. Court said Embry had a right to rely on the response and actions of Mr. Ms.Kittricks. If you manifest an intent to do something, then the expectation is that people will have to rely on it.

Konic International Corporation v. Spokane Computer Services, Inc. (Court of Appeals of Idaho, 1985) Author: Gina Koontz Procedural History: Magistrate w/o jury ruled no contract between parties b/c lack of authority of an employee of D. P appealed to District Court. DC upheld magistrates judgment. P appealed to Appellate Court. Appellate Court affirms magistrates judgment but for different reasons. Facts: A young employee of D agreed to purchase a surge protector for fifty -six twenty thinking it cost $56.20 but in reality it cost $5,620. Once D realized the mistake, they tried to return it. P refused. They went to court. Issue: Whether a K is valid when there is a misunderstanding about the terms between parties. Holding: Both parties attributed different meanings to the same term, fifty-six twenty. Thus, there was no meeting of the minds of the parties since there were two meanings to a material term. We do not reach the issue of whether Young had authority to order the equipment. (attorneys fees) B ecause this was a suit on a contract for the alleged sale of goods, D is entitled to an award of attorney fees on appeal as the prevailing party, even though no liability under a contract was established.

Local 1330, United Steel Workers of America v. United States Steel Corporation
Citation.631 F.2d 1264,1980 U.S. App. 105 L.R.R.M. 2312; 89 Lab. Cas. (CCH) P12,220 Brief Fact Summary. A steel plant closure led to the economic demise of a town. Synopsis of Rule of Law. A court cannot require a corporation to continue operations when its officers and board of directors has decided to discontinue on the basis of unprofitability. Facts. Local 13330 and 1307 of the United Steel Workers of America (Plaintiffs) are two labor organizations. Plaintiffs had a collective bargaining contract with the United States Steel Corporation for many years. Two steel plants operated by the United States Steel Corporation (Defendant) will be closing because of the age of the facilities and machinery involved and by changes in technology and marketing in steel making. The plants had been a dominant factor in the city and life of the employees. An economic blow will result to the town with the closing of the plants. Plaintiffs seek to keep the plants operating. Issue. Can a court order a corporation to continue operations when its officers and board of directors decide to discontinue on the basis of unprofitability?

Held. No.
There is no constitutional provision, federal or state law which would convey authority to this court to require the Defendant to continue operations when its officers and Board of Directors has decided to discontinue on the basis of unprofitability. There is not a property right to employment. Courts do not have the power to regulate private property. Formulation of public policy on the great issues involved in plant closings and removals is clearly the responsibility of the legislatures of the states or of the Congress of the United States.

Discussion. Even though an economic fallout would result, the court had no authority to order
a corporation to stay open when the corporation decided it was in its best interest to close because there is no property right to employment. The function of the court is to interpret law. They did, however, leave the door open for the legislature to regulate this

Izadi v. Machado (Gus) Ford, Inc., 550 So.2d 1135 (Fla. 3d DCA 1989). Facts: Machado (D) placed a newspaper ad offering a minimum $3,000 trade-in regardless of the cars actual value. The ad also contained very fine print that stated that the offer applied only to a specific type of car in stock, and that the offer was based on a trade-in worth at least $3,000. Izadi saw the ad and attempted to purchase a 1988 Ford Ranger pickup for $3,595 in cash plus trade-in. Machado refused to accept the offer. Izadi sued Machado for breach of contract, fraud, and misleading advertising. The trial court dismissed Ps complaint with prejudice and P appealed. Issue: Does the general rule that a newspaper advertisement is not an offer apply where an ad employs bait-and-switch tactics? Holding and Rule: No. An ad that employs bait-and-switch tactics is interpreted under standard contract principles and not under the general rule that an ad does not constitute an offer. The court held that the complaint properly alleged that the advertisement contained an objectively unqualified offer to pay at least $3,000 for any trade-in regardless of condition. The test for the true interpretation of an offer or acceptance is not what they party making it thought it meant or intended it to mean but what a reasonable person in the position of the parties would have thought it meant. Normally an enforceable contract does not arise from an offer contained in an advertisement. The basis for upholding the breach of contract claim is the prospect that this offer was used as bait to be followed by a switch to another deal when the acceptance of that offer was refused by D. It is difficult to find any other purpose when the bold offer is made conditioned on sub-microscopic print to apply to two models not listed in the present ad. Disposition: For P; affirmed in part and reversed in part.

Normille v. Miller

Brief Fact Summary. Plaintiffs Normile and Segal both attempted to purchase a piece of real
estate from Defendant Miller. Normile first submitted a bid, but Plaintiff responded with a counteroffer. Prior to Normiles acceptance of Defendants counteroffer, Defendant sold the property to Segal.

Synopsis of Rule of Law. A counteroffer acts as a rejection of the original offer and does not
contain the terms of the original offer. The counteroffer, like the original offer, must be accepted before it is revoked.

Facts. On August 4, Defendant listed a piece of real estate. Normile was shown the property by
a real estate broker. Upon seeing the property, Normile and the real estate broker prepared an offer. The offer specified that it must be accepted by 5:00 p.m. on August 5. Defendant received the offer, made several changes, signed and returned the offer to Normile. When the real estate broker presented the counteroffer to Normile, Normile neither accepted nor rejected the counteroffer and indicated that they were going to wait to decide what to do. However, the real estate broker was under the impression that Normile was rejecting the counteroffer based on statements made by Normile. Normile indicated that the increased amount of earnest money and decreased duration of the loan were problematic. On August 5, the same real estate broker went to the home of Segal at approximately 12:30 a.m. At that time Segal signed an offer to purchase the same property with terms very similar to Defendants counteroffer. Defendant accepted this offer. At approximately 2:00 p.m., the real estate broker informed Normile that the counteroffer had been revoked by stating you snooze, you lose; the property has been sold. Prior to 5:00 p.m. on August 5, Normile initialed Defendants counteroffer and delivered it with the earnest money deposit. Normile and Segal filed separate actions, which were consolidated. The trial court granted the Segals motion for summary judgment.

Issue. Is there an enforceable contract to purchase the property between Normile and
Defendant? Was the counteroffer a rejection of the original offer? Did the deadline for acceptance become part of the counteroffer? Was the counteroffer an option? Did Plaintiff accept the counteroffer?

Held. No. There is not an enforceable contract between Normile and Defendant to purchase
the property When a potential purchaser submits an offer to the seller and the seller makes changes to the offer prior to signing, it is generally referred to as qualified or conditional acceptance. The type of acceptance is a counteroffer and functions as a rejection of the original offer submitted by the potential purchaser. In the present case, because Defendant changed terms of Normiles offer, Defendant did not accept Normiles offer. In fact, Defendants counteroffer actually operated as a rejection of Normiles offer. In the present case, the deadline for acceptance provision in Normiles offer did not become part of Defendants counteroffer. The Court reasons that because Defendant at no point unconditionally assented to the terms of Normiles offer, the terms of Normiles offer did not become part of the counteroffer. An option contract is one that grants a potential purchaser an exclusive right to purchase property within a specified period of time for a fixed price. The Court provides two reasons why Defendants counteroffer does not grant Normile an option contract. First, an option contract must be supported by valuable consideration. In the present case, no consideration was given. Second, Defendants counteroffer did not promise that the offer would remain open for a specific amount of time. A potential purchaser does not have the power to accept an offer after it has been revoked. Under these facts, Normile neither accepted nor rejected the counteroffer when it was first presented. Normile instead expressed concern regarding some of the terms of the counteroffer and indicated that he was going to wait to decide whether to accept the counteroffer. When Defendant entered into a contract with Segal, Defendant manifested an intention to revoke the counteroffer. Revocation generally must be communicated to the offeree to be effective. In the present case, Normile did receive notice of the revocation through the real estate broker. Because Normiles power of acceptance had already been terminated by Defendants revocation of the counteroffer, Normiles attempt to accept the counteroffer failed.

Discussion. In this case, Defendant rejected Normiles offer by submitting a counteroffer.

Because the counteroffer operated as a rejection of Normiles original offer, the terms of Normiles original offer were not transferred to the counteroffer. Normile did not have a contract to purchase the property from Defendant because Normile failed to accept the counteroffer before it was revoked.

Southworth v. Oliver
|

Brief Fact Summary. The Defendant, Oliver (Defendant), began negotiations with the
Plaintiff, Southworth (Plaintiff) and a third party. When negotiations became complicated the Defendant rescinded the offer to avoid disagreement. Plaintiff claims the offer was valid and accepted.

Synopsis of Rule of Law. There is a valid offer if a price quotation is addressed to a definite
group [this is a change] and includes explicit language such as price, exact location, terms and sale date because a reasonable person would believe that the Seller is making an offer to sell.

Facts. Defendant decided to sell some of their property and some of their Forest Service
grazing permits. Defendant stopped by Plaintiffs house and asked if Plaintiff was interested in buying the property. Plaintiff said yes. Defendant said he thought Plaintiff would be interested in the land and Holliday, a neighbor, would be interested in the permits. Defendant showed a map to Plaintiff showing the land that was for sale. This conversation ended with the understanding that Defendant would develop the value and price and Plaintiff would get the financing arranged for the purchase. Defendant said that he would send information to the Plaintiff about what price he wanted so as to give him notice of what he wanted for the land. Defendant called Holliday and Holliday said he was not interested in the land only the permits. Plaintiff called Defendant almost a month later to ask if Defendant still planned to sell. Defendant said yes, he had some delays, but he would soon have infor mation to establish the value of the land. Plaintiff said he had made all of the financial arrangement and he was ready to make an offer. Days later Plaintiff received a letter from Defendant that included the asking price and explicit terms and the date of sale for the property as well as the asking price for the permits. There was a second enclosure with a similar property. Defendant sent the letter to Holliday and two others. Defendant claimed the letter was not made as an offer and the intention was to sell property and permits together. Plaintiff immediately responded to letter I accept your offer. Holliday called Plaintiff and said he needed to buy some of that land and Plaintiff said he would work something out with Holliday. Defendant was informed by Holliday that he and Plaintiff were having trouble with the exchange, but that they would work it out. Defendant decided to pull the offer because he did not want to arbitrate a disagreement between his neighbors. Defendant sent a letter to Plaintiff saying that the first letter was not a firm offer to sale. Defendant said he did not wish to sell the permits separate from land. Defendant claimed in the letter that it would not constitute an enforceable contract.

Issue. Was Defendants letter to Plaintiff an offer for sale? Held. Yes. Affirmed.
The surrounding circumstances under which this letter was prepared by Defendants and sent by them to Plaintiff were such to have led a reasonable person to believe that Defendants were making an offer to sell to Plaintiff the lands described in the letters enclosure and upon the terms as there stated. If a price quotation is expected, addressed to a definite group and includes explicit language such as price, exact location, terms and sale date a reasonable person would believe that Seller is making an offer to sell. It is the manifestation of a previous intention that is controlling, rather than a persons actual intent. The failure to add the word offer and the use of the word

information are also not controlling and an offer may be made to more than one person

Discussion. Murray on Contracts states: The most important of the remaining guides is the
language used. If there are no words of promise, undertaking or commitment, the tendency is to construe the expression to be an invitation for an offer or mere preliminary negotiations in the absence of strong, countervailing circumstances.

Leonard v. Pepsico U.S. District Court, Southern District of New York, 1997 88 F. Supp. 2d 116 Author: ERL Procedural History: P filed suit in trial court. Court ruled for D. Facts: D advertised a promotional for Pepsi Stuff on tv. In the commercial, it listed several items such as a jacket, a t-shirt, and sunglasses as prizes redeemable with pepsi points. At the end of the commercial, a Harrier Jet is shown, valued at 7m pepsi points. The jet was not listed in the catalogue of prizes. P sent in a check ($700K) purchasing 7m pepsi points asking for the Harrier Jet, which is in reality valued at $23m. D responded by returning the check with a letter stating that the Jet offer had been made in jest. P filed suit. Issues: Did Ds inclusion of a Harrier Jet in the advertisement consist of a genuine offer, even though it was meant to be humorous? >No. Was Ps subjective belief that the offer was genuine entitle him to enforcement of the promise? >No. Rationale: The reasonable person clearly would not have taken the offer of the Harrier Jet seriously. D and Ps specific states of mind are irrelevant. Thus, no real offer was made in the context of the tv commercial, and P was not justified in believing it was a genuine offer. Law: If an offer is made that is clearly meant to be a joke and interpreted as such by an objective standard, it does not constitute a binding offer.

Beard Implement Co. v. Krusa FACTS: A seller brought a breach of contract action against a buyer for the purchase of a combine. The buyer appealed the decision of the trial court that found a contract existed between the parties. The court reversed. The court agreed with the buyers argument that the seller never accepted the buyers offer to purchase the combine. The court found that the purchase order form signed by the buyer constituted an offer made by the buyer to the seller. The court concluded that the purchase order unambiguously required the signature by the sellers dealer in order to be a proper acceptance of the buyers offer. The court therefore found that because the sellers dealer never signed the purchase order, no contract ever existed. ISSUE: Did a contract exist between the two parties? Court must first identify the offeror and the offer. Court must determine whether defendants offer was accepted by plaintiff. Unambiguous/ambiguous. RULE: Cannot be an ambiguous contract.

Weight of authority suggests that purchase orders are not enforceable contracts until accepted by the offeree. An offeror has complete control over his offer and its terms of acceptance, and no other mode may be used where a written acceptance is required.

ANALYSIS: No one ever signed for dealer. For the purposes of the present case, the key word in this statute is the term unambiguously. If defendants offer contained on the purchase order is unambiguous in inviting acceptance only by the signature of plaintiffs dealer, no contract exists until the purchase order is signed accordingly. If, however, defendants offer is ambiguous in inviting plaintiffs acceptance, a contract between plaintiff and defendant could be found to exist.

The offeror is the master of his offer

CONCLUSION: Based on the foregoing, we conclude that the purchase order in this case unambiguously required the signature by plaintiffs dealer in order to be a proper acceptance of defendants offer. Because plaintiffs dealer never signed the purchase order, no contract ever existed. Judgment in favor of plaintiff is reversed.

Beard Implement Co v Krusa

Facts: Beard was a farm implement company and Carl Krusa was a farmer. The parties had negotiated for the purchase of a 1985 Duetz-Allis combine. After DF present combine broke, he approached Beard where a purchase order for the combine in question was filled out. The price was $52,800 cash after trade in. Df signed the purchase order but neither of PLs representatives signed. The purchase order required their signatures for acceptance. DF tendered an undated counter check for $5200. Df subsequently negotiated a better deal with Cox for the same model. Issue: Whether a valid contract existed between Krusa and Beard without Beards signatures for acceptance? Holding: Yes Procedure: Bench trial concluded a contract existed. Reversed. Rule: Where a verbal agreement takes the form of a written agreement, acceptance is effective only when the document is signed and delivered unless the intention of the parties that the earlier verbal agreement is binding and the written form is a memorialization of the verbal K. Ct. Rationale: The offeror is the master of his offer. An offeror may prescribe as many conditions or terms of the method of acceptance as he may wish, including, time, place, and manner. The Pl drafted the purchase order and then gave it to DF to use for his offer to purchase the combine. The P. O. clearly required the signature of the PL dealer, in order to be a proper acceptance of DFs offer. PL never signed the P. O. therefore no contract existed. PL A: 1-The Parties had a verbal agreement and the purchase order only memorialized the verbal terms. 2-PL offered the combine to Df and Df accepted by tendering a signed counter check and giving that check to PL as down payment. Def A: Pl never accepted Dfs offer to purchase the combine as evidenced by their missing and required signatures on the purchase order.

Klocek v. Gateway, Inc., 104 F. Supp. 2d 1332 (D. Kan. 2000). Facts: Klocek (P) brought a class action suit against Gateway (D), alleging that it had made misrepresentations regarding technical support in efforts to induce him and others to purchase computers and special support packages. Klocek also brought breach of contract and breach of warranty claims, alleging that Gateway had claimed that their computers would be compatible with standard peripherals and internet services. Each Gateway computer shipped with a document referred to as the Standard Terms in the box containing the instruction materials and cables. The Standard Terms provided that all claims would be settled through arbitration. The Standard Terms contained a notice on the first page stating that by keeping the computer for more than five days the user accepts the Terms as the binding agreement between the parties. Gateway moved to dismiss under the Federal Arbitration Act (FAA) which ensured that written arbitration agreements in transactions involving interstate commerce are valid, irrevocable, and enforceable. Under the FAA, if any suit is brought on any issue covered by an arbitration clause the court, on motion by one of the parties, must stay the trial until the conclusion of arbitration proceedings. Klocek in turn argued that the provisions of the Standard Terms were not binding. Klocek argued that his order of the computer constituted an offer and therefore the Standard Terms were either an expression of acceptance or written confirmation of the offer governed by Section 2-207 of the UCC. The trial court denied Gateways motion to dismiss and Gateway appealed. Issues: 1) Under UCC 2-207, must the seller prove sufficient evidence of notice and assent to the terms at the time of purchase in order for a shrinkwrap license to be binding? 2) Can UCC 2-207 be applicable if only one form is exchanged between the parties? Holding and Rule: 1) Yes. Under UCC 2-207, the seller prove sufficient evidence of notice and assent to the terms at the time of purchase in order for a shrinkwrap license to be binding. 2) Yes. UCC 2-207 can be applicable if only one form is exchanged between the parties. UCC 2-207 may apply even if there is only one form involved in the transaction. The official comment to the section specifically provides that sections 2-207(1) and (2) apply where an agreement has been reached orally and is followed by one or both of the parties sending formal memoranda embodying the terms so far agreed and adding terms not discussed. In typical consumer transactions the purchaser is the offeror and the seller is the offeree. Klocek offered to purchase the computer and Gateway accepted. Under UCC 2-207, the Standard Terms constitute either an expression of acceptance or written confirmation. The Terms would constitute a counter-offer only if Gateway expressly made its acceptance conditional on Kloceks assent to the additional or different terms. Additional or different terms contained in the Standard Terms did not become part of the agreement because Gateway has not presented evidence that Klocek expressly agreed to the Standard Terms. That he kept the computer for more than five days is not sufficient to demonstrate that he expressly agreed to the Standard Terms.

Disposition: For Klocek. Gateways motion to dismiss denied. Notes: In typical consumer contracts the offeror is the purchaser and the offeree is the seller. The court held that the contract formed at the time of the order and not five days after receipt of the computer. The terms that shipped with the computer were therefore not part of the bargain and the arbitration clause was not enforceable in light of UCC 2-207.

-Saver Data Systems, Inc. v. Wyse Technology

Brief Fact Summary. Defendant sold computer programs to Plaintiff and all the programs
had box top license terms which stated that opening the package was acceptance of certain terms, including a disclaimer of warranties. Plaintiff would resell the software to various customers. Plaintiff started getting sued because of problems with the software and sought to get indemnity from Defendant and enforce breach of warranties against Defendant.

Synopsis of Rule of Law. Under 2-207, an additional term detailed in a box top license will
not become incorporated into the parties agreement if the term would materially alter the agreement.

Facts.
Plaintiff would call Defendant to order programs and Defendant would accept over the phone and ship the goods promptly. The phone calls never discussed the disclaimer of warranties. The invoice would only discuss price, quantity and shipment terms. The License specifically states that opening the package would indicate acceptance of the terms, including the disclaimer, and if a person did not agree then they could return the package unopened for a refund.

Issue.
Whether the box-top license should be considered a conditional acceptance Whether the course of dealing established that the disclaimer became incorporated in the contract. Whether the box-top license was a material alteration to the parties contract which could not become part of the contract under UCC 2-207. Held. The box-top license would not be considered a conditional acceptance because the software producer did not clearly express an unwillingness to proceed unless the additional terms were incorporated into the agreement. The actions of the software producer in repeatedly sending the writing of terms that could be otherwise excluded did not result in a course of conduct that adopted the terms of the writing. As a matter of law, if the original contract included warranty, the addition of the disclaimer of the warranties by the box-top license would substantially alter the distribution of risk relating to the product between the two parties. Therefore, under 2-207 the disclaimer would materially alter the agreement between the parties and could not become a part of the agreement. Discussion. The box top license statement that opening the program was an acceptance was not a clear enough indication that the deal would not go forward without assent to the additional terms. A disclaimer of warranties would change the distribution of risk relating to the product such that it was a material change form what the agreement would be if normal warranties applied to the seller under the UCC. Use UCC rule to reject the last shot form.

Varney v. Ditmars, 217 N.Y. 223, 111 N.E. 822 (1916).

Facts: Varney (P) was an architect and draftsman who accepted a position for $35 per week with Ditmars (D). A few months later Varney informed Ditmars that he had been offered another position at a higher salary and Ditmars gave Varney a raise. Ditmars was very pleased with Varneys work and promised him that when he closed his books the following January he would give him a fair share of the profits. P became ill and did not go to the office and was subsequently fired. P sued D for $1,680 for lost wages and profit sharing. P was the only witness to testify to the alleged contract and the complaint was dismissed. P appealed. Issue: How specific must the material terms of a contract be in order to be enforceable? Holding and Rule: The material terms of a contract must be definite and certain in order for a contract to be enforceable at law. The court held that there could be no definite and certain meaning attached to the words fair profit and the alleged contract relating to that provision was therefore uncertain and indefinite. The court held that there is no contract so long as any essential element is open to negotiation. Disposition: Affirmed. Dissent (Cardozo): P failed to supply data essential to the computation of a fair profit. I cannot concur that he failed to make his case regarding the extent of his lost salary. The hiring was not at will and the plain implication was that P was to continue until the end of the year when the books were closed. The evidence presented would allow a jury to find that P was discharged without cause and his damages could be proven.

Cobble Hill Nursing Home, Inc. v. Henry and Warren Corp. (New York - 1989) Parties: Plaintiff: Cobble (buyer) Defendant: Henry (seller) Facts: Cobble Hill Nursing Home, Inc. (hereinafter Cobble Hill) was appointed as the receiver for the
nursing home owned by Henry and Warren Corporation (hereinafter Henry and Warren). Pursuant to the receivership agreement, Cobble Hill and Henry and Warren entered into a lease of the subject premises. The lease, by incorporating by reference the receivership agreement, granted Cobble Hill the option to purchase the premises during the term of the lease at a price to be determined by the Department of Health in accordance with the Public Health Law and the Department's rules and regulations known as "the Medicaid allowable transfer price". In 1979, during the term of the lease, Cobble Hill elected to 566*566 exercise its option to purchase the subject premises and requested the Department of Health to set the purchase price. The Department calculated the Medicaid allowable transfer price for the premises as of January 1, 1980, at $3,046,352. However, Henry and Warren refused to sell the premises at the price set by the Department of Health. Thereafter, Cobble Hill commenced Action No. 1 for specific performance of the option to purchase the real property and Henry and Warren counterclaimed for rescission or adjustment of rent payments to the fair market value. Henry and Warren also separately sued the Department of Health and the Commissioner of Health challenging, inter alia, the determination of the price.

Procedural History: o Trial Court ruled in favor of D o P appealed to the Court of Appeals o Court of Appeals affirmed the trial court's finding, ruling in favor of D o P appealed to the Supreme Court o The Supreme Court of N.Y. reversed the lower court's finding in favor of P and entered summary judgment for P. Issue: Whether an option permitting P to purchase a nursing home is so indefinite in its price as to preclude enforcement by the courts? Holding: No Rule: o The court concluded that specified law and regulations did not provide an explicit mechanism for determining purchase price, and that the parties had therefore failed to state an essential term, rendering the option unenforceable. - Appellate division - reversed by Court of Last resort o If an agreement is not reasonably certain in its material terms, there can be no legally enforceable K.

The doctrine of definiteness serves 2 purposes: 1. unless a court can determine what the agreement is, it cannot know whether the K has been breached, and it cannot fashion a proper remedy. 2. the requirement of definiteness assures that the courts will not impose contractual obligations when the parties did not intend to conclude a binding agreement.

o Before rejecting an agreement as indefinite, a court must be satisfied that the agreement cannot be rendered reasonably certain by reference to an extrinsic standard that makes its meaning clear. o Passing from the general to the particular, a price term is not necessarily indefinite because the agreement fails to specify a dollar figure, or leaves fixing the amount for the future, or contains no computational formula.

--Notes- Purchase option does not include specific price. Option K is enforceable because: o Where the parties have manifested an intent to be bound, a price term, left to be determined, may be sufficiently definite if the parties here have provided a method or formula for the objective determination of the price. In regards to the price the court said it is fine because Henry needed to sell it fast because he was going to jail (a fire sale) and thus the value was not supposed to be the fair market value. In an option or renewal lease, etc. set future option, renewal lease, etc. to market value, if they fail to do so then have a set formula to be used by an independent 3rd party to determine the price.

Oglebay Norton Company v. Armco, Inc |52 Ohio St. 3d 232,556 N.E.2d 515,1990 Ohio

Brief Fact Summary. The Appellee, Oglebay Norton Company (Appellee), a shipper, and the Appellant, Armco (Appellant), a Steel manufacturer entered into a 1957 long-term agreement whereby Appellee would transport iron ore for the Plaintiff. After 23 years, the contract between the parties was renewed numerous times and often modified. Appellee was required to undergo changes to its ships and ports in order to maintain Appellants business. In 1983, the iron and steel industry began to suffer and the parties became unable to reach a mutually satisfactory shipping rate, as the mechanisms encompassed in their original contract failed. Synopsis of Rule of Law. When a contracts operating mechanisms break down, the court will look to the intent of the parties to determine whether an agreement will continue or end. Facts. By 1985, Appellant encountered an inability to pay the shipping prices as they were set by Appellee. In 1986, Appellee filed a Declaratory Judgment action, requesting a rate be set for the price of steel. Appellant filed a counterclaim, seeking the contract be voided due to a failure of the rate pricing mechanism. The trial court found that the parties intended to be bound, despite the failure of the pricing mechanisms and fixed a price at which the parties were to operate. The court of appeals affirmed the judgment of the trial court. Issue. This case deals with insufficient agreements. The main issue is whether a contract remains enforceable when its mechanisms fail. Held. Affirmed. The Court found there was a question of fact as to whether the parties intended to be bound. The trial court was within its discretion to consider the on-going and tangential relationships between the parties, determining that they did intend to be bound to their shipping agreement. As such, after a failure of the pricing mechanisms, setting the price was acceptable and ordering mediation for further price disputes was a good resolution of the problem Discussion. Whenever a court finds that parties intend to bind themselves to an agreement, the court will err on the side of preserving the agreement, rather than not.

Dickinson v. Dodds
2 Ch. Div. 463 (1876). Brief Fact Summary. Defendant gave a written offer to Plaintiff to sell a certain property and that stated the offer was to be left over until Friday 9 oclock am. Plaintiff left acceptance with Dodds mother-in-law at 7pm Thursday evening upon learning that Defendant had been offering the property to another. Plaintiff attempted to deliver the acceptance personally to Defendant on Friday morning who refused stating that he had already sold the property. Synopsis of Rule of Law. Promises to keep an offer open until a certain time will be only a promise unless made by binding by consideration and acceptance necessary to form a binding agreement. Facts. Plaintiff believed he had the power to accept until 9am on Friday. He learned that Defendant was negotiating with another party and immediately brought his acceptance to the house where Defendant was known to be staying and left written acceptance with his mother-in law. Defendant had sold the property to Allen on the day before, Thursday. Defendant, found him before 9am on Friday at the train station and handed him a copy of the acceptance. Issue. Whether the promise to keep the offer left over until Friday 9 oclock was a binding contract without consideration and before complete acceptance by Plaintiff. Held. The offer to be held open until Friday 9 oclock was only an offer that was not supported by consideration or acceptance by Plaintiff. There was no binding agreement to keep the property unsold until 9 oclock Friday morning. Concurrence. The other party was free to make a more favorable offer to Defendant which he was free to accept. There was no binding agreement between Defendant and Plaintiff since Plaintiff had not accepted the offer. In addition, it was questionable whether Plaintiff could accept at all once he had knowledge that the person had sold the property to someone else. Discussion. Consideration would have supported the agreement to keep the property unsold until 9 oclock as an agreement separate from the offer to sell. Without that, it was a mere promise that Defendant was free to break. Since the other party, Allen, purchased the property before Plaintiff accepted there could not be any acceptance by Plaintiff.

Drennan v. Star Paving Co. Case Brief Summary Summary of Drennan v. Star Paving Co., 51 Cal.2d 409, 333 P.2d 757 (Cal. 1958). Facts Star Paving (D) submitted a subcontractor bid to Drennan (P), a general contractor, for a public school construction project. Drennan used Star Pavings bid of $7,131.60 to prepare his final bid and was awarded the contract. The next day Star Paving informed Drennan that it had underestimated the cost of the project and refused to do the work for less than $15,000. Drennan hired another subcontractor to do the work for $11,000 and sued Star Paving for the difference between $11,000 and $7,100. The trial court entered judgment for Drennan, holding that Star Paving had made an offer and that Drennan had relied upon that offer when listing Star Paving as the subcontractor. Star Paving appealed. Issues 1. Can reasonable, justifiable, and foreseeable reliance render an offer binding? 2. What is the test for applying promissory estoppel? Holding and Rule (Traynor) 1. Yes. An offer that the promissor should reasonably expect to induce action or forbearance of a definite and substantial character by the promisee, and which does induce such action or forbearance, is binding if injustice can be avoided only by enforcing the promise. See Restatement (2d) of Contracts 90. 2. In order for promissory estoppel to apply there must be: 1) a clear and definite offer; 2) a reasonable expectation that the offer will induce reliance in the other party; 3) actual and reasonable reliance by the offeree; and 4) a detriment which only can be avoided by enforcement of the offer. Star Pavings subcontractor bid constituted a promise to perform under conditions both express and implied, according to the circumstances. It was silent on revocation and therefore the court determined whether there were conditions imposed by law or reasonably inferred. The court turned to Restatement (2d) of Contracts 45; merely acting in justifiable reliance on a unilateral offer is sufficient to make that offer irrevocable for a reasonable period of time to complete performance. Public Policy Whether implied in law or fact, enforcement of Star Pavings promise precluded the injustice that would result if the offer could be revoked after the offeree acted in detrimental reliance upon it. Reasonable reliance resulting in a foreseeable and prejudicial change in the promisees position affords the compelling basis for implying a subsidiary promise not to revoke a unilateral offer. Star Paving had a stake in Drennans reliance on the bid in making Drennans bid on the general contract. The court held that it was only reasonable that Drennan have the opportunity to accept Star Pavings bid after Drennan was awarded the general contract if Drennan justifiably and reasonably relied on Star Pavings offer. As for Star Pavings mistake defense, Drennan could not have justifiably relied on Star Pavings bid if Drennan had reason to believe that Star Pavings bid was in error. The mistake that Star Paving made in its bid was not one of which Drennan knew or should have known and Drennans reliance was justified.

Disposition Judgment for Drennan affirmed.

State v. Wheeler, 631 P.2d 376 (Wash. 1981) Facts: Wheeler (D) was offered a plea bargain which was withdrawn before Wheeler had the opportunity to accept and offer a guilty plea. Wheeler sought specific performance of prosecutors plea bargain offer. Wheeler contended that the prosecutor could not rescind the offer before Wheeler had an opportunity to accept it. Issue: May a prosecutor withdraw a plea agreement before the entry of the defendants guilty plea? Holding and Rule: Yes. Absent detrimental reliance, a prosecutor may withdraw a plea agreement prior to the actual entry of the defendants guilty plea. Most jurisdictions apply strict contract principles to plea bargain agreements. The court held that a plea agreement is a unilateral contract and only the defendants plea, or some other detrimental reliance, can constitute an acceptance. There court held that there was no right to the opportunity for a plea bargain under the constitution.

Hamer v. Sidway, 124 N.Y. 538, 27 N.E. 256 (N.Y. 1891). Facts: William E. Story and his nephew, William E. Story II, agreed that the uncle would pay his nephew $5000 if the nephew would refrain from drinking, using tobacco, swearing, and playing cards and billiards for money until he turned 21. When the nephew turned 21 his uncle sent him a letter that indicated that the nephew had earned the $5000 and that he would hold the money with interest until the nephew became capable of taking care of it responsibly. The nephew accepted the terms. The uncle died twelve years later without having transferred the funds to his nephew. The nephew assigned the funds to Louisa Hamer (P) who brought suit against the executor of the uncles estate, Franklin Sidway (D). At trial judgment was entered in Hamers favor which was reversed on appeal in Sidways favor. Hamer appealed. Issue: Is forbearance from permissible legal conduct sufficient consideration to create a valid and enforceable contract? Holding and Rule: Yes. The mere abstention from a permissible legal conduct is sufficient consideration to make a promise based on that forbearance a valid contract. Consideration is not measured as a benefit to the promisor. When an offer is ambiguous regarding whether acceptance shall be in the form of performance or an exchange of promises, determining if the offeror was indifferent to whether acceptance be by performance or promise is accomplished by interpreting the language of the offer under the circumstances in which it was made. The court held that in this case, the language of the offer made it clear that the uncle sought acceptance by performance and not by a promise to perform. D contended that the contract was invalid because it lacked consideration and that there is no consideration unless the promisor is benefited. The court stated that consideration may consist in either a some right, interest, profit, or benefit to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other. It is immaterial whether the consideration does in fact benefit the promisee or a third party or is of substantial value to anyone. Refraining from something that one is entitled to do is a sufficient detriment to create an enforceable contract. Disposition: Reversed in favor of Hamer (P). Note: Under Restatement 2nd 32 if an offer is ambiguous it can be accepted by a promise or actual performance. If acceptance is through performance the contract is unilateral, if through promise the contract is bilateral.

White v Village of Homewood 256 Ill. App. 3d 354 Parties: White: Plaintiff: Angela White, Defendant: Village Facts: 1. White was injured while taking a physical agility test to become a firefighter/paramedic 2. Sued for negligence in administering the test 3. She signed an exculpatory agreement excusing the Village from all liabilities associated with the agility test. 4. Plaintiff contends that the agreement lacks consideration to make a Contract Procedural History-Trial Ct. dismissed the negligence count. Issue: Whether the exculpatory agreement had sufficient consideration to constitute a contract with plaintiff waiving all ability to recover from damages suffered Rules of Law: 5. To be efficacious in a court of law, however, a release must be based upon Consideration

6. Same rules for an exculpatory agreement 7. Valuable consideration exists either of some right, interest, profit, or benefit accruing to one party, or some forebearance, detriment, loss of responsibility given, suffered, or undertaken by the other 8. The pre existing duty rule provides that where a party does what it is already legally obligated to do, there is no consideration as there is no detriment 9. Hotel guest safe example Holding: Reversed/Remanded Reasoning: Village had a duty to give the agility test according to the Illinois Municipal Code Plaintiff had a legal right to participate No consideration because of the pre existing duty of defendant, cannot put a limit on that NO consideration, exculpatory agreement cannot be enforceable Sufficiency of consideration not considered here because there was NO consideration.

Langer v. Superior Steel

Facts:

P retired from working for D. D told P that he would receive $100/mo. As long as P preserved attitude of loyalty to D and was not employed in any competitive occupation. D paid for four years until P was notified that D did not intend to pay any longer.

Procedural History:

Issues:

Lower court found for D. Reversed on appeal and remanded to lower court. Lower court found for P. Highest court in state found for D since person who made promise did not have the legal right to bind the company.

Is consideration valid even if the promisee is not bound to the constraints of the agreement? Is consideration given if the promisee was only restrained from doing that which he had a right to do?

Holding/Rule:

Being constrained from doing something one has a right to do, suffering any detriment, or doing something a one isn't required to do is sufficient consideration, whether there is any actual benefit to the promisor or not. Just because one party has an option to act inside or outside of the agreement and one side does not, does not preclude consideration.

Reasoning:

It was to the advantage of the D if the P did not work for any other company. P did not work for any other company because of the agreement with D. By receiving monthly payments, the P accepted the conditions and was constrained from doing what he had a right to do. This was sufficient consideration. Contract is also enforceable through the theory of promissory estoppel. o P was induced by the promises by D to refrain from seeking other employment. (reliance) o "We do not mean to state that in all cases where a gratuitous promise is made, and one relies upon it, the promisee can recover, but, if a detriment of a definite and substantial character has been incurred by the promisee, then the court may enforce the promise."

Dissent:

None.