Offer life-cycle
Foundations · Aug 31
Bilateral vs unilateral; agreement vs bargain. End of Module I.
Floor. ~40 min: R2d § 1 + Steinberg. The doctrine the next class assumes you have covered.
Target. ~75 min: Floor + Pappas + R2d § 2 + synthesis.
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.
(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.
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.
69 Ill. 2d 320, 371 N.E.2d 634 (1977)
Supreme Court of Illinois
Rule. A contract may be formed through a sequence of acts when one party invites performance, the other performs, and the conduct objectively manifests assent; the offeror's undisclosed intent is immaterial.
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.
William Greene began working for Grant Building in 1959. He allegedly agreed to work at a pay rate below union scale in exchange for a promise that Grant would employ him "for life."
In 1975, Oliver Realty took over management of Grant Building. The president of Oliver Realty assured all former Grant employees that their existing employment contracts would be honored. Greene explained his agreement to his new supervisor, who said he would look into it but never followed up.
In 1983, Oliver Realty fired Greene. Greene sued Oliver Realty for breach of contract.
Was a valid bargain formed between Greene and Grant? Between Greene and Oliver Realty?
Facts. Same Steinberg facts, but the brochure carries a footer in large bold type: "Admission decisions are made in the school''s sole and unfettered discretion. No published or unpublished criterion is a commitment. Application fees are non-refundable regardless of outcome." Steinberg pays the fee, is rejected on undisclosed criteria, and sues.
Question. Is there a contract Steinberg can sue on?
Stretch problems from the chapter.
Rules. R2d § 1, R2d § 2, R2d § 3.
Cases. Steinberg v. Chicago Medical School · Pappas v. Bever.
Open question. Steinberg tells us conduct can manifest assent. It does not tell us how to read the outward manifestations when the speaker denies a deal he plainly made. Module II opens Class 4 with Lucy v. Zehmer on the objective theory, and with Raffles v. Wichelhaus on what happens when the outward manifestations themselves split.
Next class: Bargains
_Mutual Assent_ · Sep 8
Read Lucy v. Zehmer and Raffles v. Wichelhaus. Zehmer swears under oath he was joking. Lucy says he was serious. The court enforces the writing. Why? In Raffles, both parties signed for cotton "ex Peerless." Two ships were named Peerless. The court refuses to enforce. Why? Come ready: you may be called on either case.