Class 2: Promises, Bargains, and Remedies

Foundations · Aug 26

What a promise is, what a bargain is, and what the law does about either.

By the end of class, you can

Apply R2d § 2 to a gratuitous family promise and decide whether the speaker manifested intent to be bound.
Apply R2d § 3 to a fact pattern and distinguish an agreement from a bargain, explaining why the bargain element matters for enforceability.
Identify, on a hypothetical, whether expectation, reliance, or restitution damages best fit the promisee's injury.

Today

Floor. ~40 min: R2d §§ 1, 2 and Pappas. The doctrine of "what is a promise" is the next class's prerequisite.

Target. ~75 min: Floor plus R2d § 3 (agreement and bargain), Problem 2.1, and synthesis.

R2d § 1: Contract Defined

A contract is a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.

R2d § 2: Promise; Promisor; Promisee; Beneficiary

(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.

R2d § 3: Agreement Defined; Bargain Defined

An agreement is a manifestation of mutual assent on the part of two or more persons. A bargain is an agreement to exchange promises or to exchange a promise for a performance or to exchange performances.

Pappas v. Bever

219 N.W.2d 720 (Iowa 1974)
Supreme Court of Iowa

Rule. A statement of present intention to act in the future is not a promise; the language of intent does not become a binding commitment merely because the speaker later behaves as if it were.

Worked example: Problem 2.1, Contract, Agreement, or Bargain?

For each item, identify whether the parties have made a promise, a contract, an agreement, a bargain, or a mere statement of opinion, and explain your reasoning.

1. Sarah Seller orally offers to sell Greenacre to Carlton for $100,000, and Carlton orally accepts.

2. Bob the Builder is constructing a home for Harry Homemaker. Bob says to Harry, "I warrant that this house will never burn down."

3. Harry Homemaker brags to his neighbor Nancy, "This house will never burn down."

4. Ernst Employer says to Wanda Worker, "I will employ you for a year at a salary of $5,000 if I go into business."

5. Stephen Stargazer remarks to Tom, "That constellation over there is called the Big Dipper." Tom replies, "Yes, that's right."

Stretch: Problem 2.2, The Monster and the Beast

Z-Trip, a DJ, told Monster Energy that his "Megamix" of Beastie Boys tracks was "available for free download" on his website. A Monster employee emailed him a draft promotional video using the Megamix; Z-Trip replied "Dope!" Monster posted the video. The Beastie Boys sued Monster for copyright infringement; Monster sued Z-Trip on a theory that he had promised Monster a license.

Did Z-Trip promise Monster that Monster could use the Megamix in its promotional video?

Stretch: practice problem

Stretch problems from the chapter.

Problem 2.1. Contract, Agreement, or Bargain?. See casebook Chapter 2.

Problem 2.2. The Monster and the Beast. See casebook Chapter 2.

Walk through the analysis on the board. Hit the rule, the elements, the line of authority, the answer.

Class summary

Rules. R2d § 1, R2d § 2, R2d § 3.

Cases. Pappas v. Bever.

Open question. R2d § 2 tells us when a statement is a promise. It does not tell us when a promise the law will enforce has been made. Pappas is a promise question, but the pledge also fails because there is no bargain (R2d § 3) and no consideration (R2d § 71). Class 3 picks up Steinberg v. Chicago Medical School and asks how a school catalog plus an application fee can manifest a contract without anyone saying "I promise."

Seed. The casebook has already shown you a promise enforced on reliance alone, before any bargain. The doctrine is R2d § 90. Module III answers when it applies.

Next time

Next class: What Is a Contract?

_Foundations_ · Aug 31

Agreement vs bargain. End of Module I. Class 3 picks up Steinberg v. Chicago Medical School and asks when a school catalog or application form crosses into a binding promise.