discerning the agreement Flashcards
Raffles (ambiguous) – the ex peerless ship case! The parties were in disagreement about which peerles ship was meant when the k said the cotton would be arriving ex peerless, issue of whether there was a meeting of the minds when pirates have different meanings regarding terms
there is no contract if there is a mutual misunderstanding by both pirates as to the meaning of a term of an agreement
would we have found for the raffles case the same way today
no, on its face the k put little emphasis on the name of the ship, and objectivly both parites were mutually assenting so there should have been a k
Oswald (ambiguous) – the coin case; P, who didn’t speak english wanted to buy swiss coin collection from D, he went to see them and didn’t realize that all the coins were from two separate collections, he understood them to all be apart of the swiss coin collection, she did not, but they did not realize this miscommunication till later; issue of whether there was an agreement
when any of the terms used to express an agreement is ambiguous and the parties understand it in diff ways, there is no K UNLESS one of the paries should have been aware of the other’s understanding
Frigaliment (vague)– the chicken case! There was an agreement between the parties to buy and sell ‘chickens’ issue of what the word chicken meant/ and whether courts can look externally to discern the meaning of a vague term.
when parties to a K, in good faith, subjectively construed a term differently, courts are allowed to look externally to determine the proper meaning of the term
what external factors did the frigalment court look at to discern the menaing of chicken
hey looked at the og k, and also considered the fact that because D was new to the trade, D’s acceptance of the standard must be made to appear by proving he had knowledge of the meaning the P put to the word or that there was a general understanding of P’s use
When all the evidence was taken into consideration, it was clear that D believed it would comply with the K by delivering stewing chicken
Weinberg (vague) – the dress case, p and d had retail stores, the leasing agreement said that no one else but P would sell ladies dresses, D began selling skirt - blouse sets, P sued for breach of K, issue of what the word dresses entailed
an example of the court stepping in when two people in the same industry have conflcing subjective defs of a term
a K will not be enforced when the terms of the k are too vague for the court to try and interpret.
rst 201 - whose meaning prevails when
the parties have the same meaning to a term
if the parties have diff meanings but one party had reason to know of the other parties meaning
the parties have different meanings and have no reason to know the other’s attached meaning
If parties have the same meaning to a term = that meaning will prevail
If the parties have diff meanings, it is attached by one of them at the time the agreement was made
When one party didnt know of any diff meaning but the other party knew the meaning attached by the first; the first pirates meaning will prevail
When one party had no reason to know of any other meaning attached by the other and the other did have a reason to know
Neither party is bound by the meaning attached by the other (except inthe above exceptions) even if that means a failure of mutual assent
2-208 course of performance or practical construction
Comment - the parties themselves know best what they have meant by their words of agreement and their actions under that agreement is the best indication of what the meaning was.
what are the two ways a court will supply terms to fill a gap
Implied in fact- those that the parties actually (although implicitly) agreed to
Implied in law - thought to be imposed upon parties without their consent
what are the types of judical gap fillers
Default rules - refers to those legal rules that the parties can avoid or vary by menas of an express clause that differs from the term a court will otherwise apply by default
Immutable rules - may not be varied by consent of the parties and will override any express clause to the contrary
Sun printing- the parties agreed to buy and seel 1000 tons of paer of months for an allotted time, and that the price of paper should be agreed upon 15 days before the expiration of each period, and the price was not to exceed what the canadian paper company charged; time came for them to agree on a ndw price, D gave notice that the K was imperfect and that they wont deliver, issue over whether the terms were definite and the court could fill in tiny gaps or if it was just an agreement to agree
a court cant fill in gaps in a contract if the terms are not definite enough to assume to know what the parties meant ; to constitute a binding K, the terms of each element of the K must be sufficiently specific
Wood v lucy (illusory promise) – D employed P to help her turn her designs into money, gave P the EXCLUSIVE RIGHT subject to D’s approval to place P’s endorsements on the designs of others, this was to last a year, P alleged D broke the K by putting endorsements on clothes without his knowledge; issue of whether the court will fill the gap an show that there was an implication that a promise was made
a promise can be implied if the facts provide evidence of a mutual obligation and courts will fill that gap; a promise to use reasonable efforts may be implied from the entire circumstances of a contract
New York Central Iron works (illusory promise) – d was bound via k to furnish P with the entire radiator needs for the year on the terms and the prices specified, usually the P only needed 48k feet of radiation but this time P needed more and it totaled 100k, D refused to fill the order, issue over whether the court could fill the gap and imply that the P should not exceed what they normally needed per year
definite terms will not be implied when a K does not expressly contain them, but each party is required to act in good faith and reasonably
Ie the indefinite term was the amount of iron ot be filled (the d should have been specific if it didn’t want to exceed)
Eastern Airlines – the parties had mutually enjoyed the business relationship up until this point; in the STANDARD FORM aviation K, it said that the parties agreed to buy and deliver jet fuel; but communications between the parties resulted in a demand by D that P meet its demand for a price increase or D would shut off P’s supply; issue over whether the standard form aviation K was a binding requirement K despite its lack of definiteness?
based on the standards set out by the UCC, the k is binding, since the purchasers in this K was an OPERATING BUSINESS, the lack of mutuality and its lack of definition is resolved by an objective standard of good faith
Requirement Ks must be carried out in good faith for them to be binding
what is an illusory promise
A promise is illusory if the person who makes the promise retains complete and unfettered discretion over whether to perform
Ie ‘if I want to’
The principle question is whether the meaningful promise made by one of the parties is enforceable
rst 204 supplying an ommitted essential term
when the parties to a bargain sufficiently defined to be a contract have not agreed with respect to an essential term of the K, the court will supply the term that is reasonable in the circumstances
what is a form contract aka a contract of adhesion
a k between two parties, where the terms and conditions favor one of the parties, and there is no chance for the other party to bargain for better terms
Carnival – P bought a cruise ticket that had form k language on the back that said that all disputes would be litigated in florida, p was injured and tried to sue in washington court; issue of whether a forum selection clause is valid when there is no opportunity to negotiate.
a forum selection clause is not fundamentally unfair just because the clause was not negotiated; they also look at the intent of the party who wrote it .
Capsi- P wanted to sue Defendant microsoft, there was a form contract about where the dispute should arise, issue over whether the forum selection clause was valid
when a consumer has adequate notice of the forum selection clause, and the clause is reasonable and not hidden, the forum selection clause is valid.
does the ucc follow the common law mirror image rule for acceptamce
nope! unlike common law with the last shot rule, the ucc follows the battle of the forms/ 2-207
step saver
Facts- one party argues that the K was formed over the phone, the other said that it isn’t complete until opening of the package
Issues- was there a conditional acceptance upon opening the package, does 2-207 apply because there was a material alteration, and without the boxtop, would the K have been a definite contract?
under UCC 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
union carbide
Facts- union had to pay back taxes, and they brought suit against oscar myer to get reimbursed for what they had to pay, relying on the indemnity clause on the back of its invoice that said the buyer shall pay the seller the amount of all government taxes. — so the part about the buyer paying the taxes was the additional term added to the parties agreement
Issue- was the clause added by Union an enforceable term/proposal or was it a material alteration that would not be enforceable without oscar’s express acceptance?
a term inserted by the offeree is ineffectual
- If the offer expressly limits acceptance to the terms of the offer OR
- If the new term
Makes a material alteration, in the sense that consent to it cannot be presumed AND
There is no showing that the offeror in fact consented to the alteration – whether
Expressly OR
By silence against the background of a course of dealings
what is a rough summary of ucc 2-207/battle of the forms and deviant acceptance
it replaces the mirror image rule becuase the ucc is more forgiving of acceptances that dont macth the term of an offer
something that wouldnt have counted as an acceptance because it adds terms might now count as an accpetance, even though the terms of each party dont macth
deviant acceptances must be made in defenint and seasonble time
2-207: Additional Terms in Acceptance or Confirmation
- A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance EVEN THOUGH it states terms additional to or different from those offered or agreed upon, UNLESS—- acceptance is expressly made conditional on assent to the additional or different terms
2.The additional terms are to be understood as proposals for additions to the contract. Between MERCHANTS such terms become part of the contract UNLESS
a. The offer expressly limits acceptance to the terms of the offer;
b.They materially alter it
c.Notification of objection to them has already been given or is given within a reasonable time after notice of them is received
why does it matter whether a ucc 2-207 transaction is btweem two merchants
because if a non merchant is invovled, they have to expressly accept the propsal
three ways shoppers can attain info about terms of a product
They can ask the vendor to send a copy before deciding whether to buy
Shoppers can consult public sources
They may inspect the documents AFTER the products delivery
ProCD- customer buys software that contains a shrinkwrap license (which was not visible until after you purchased and opened) that limits the consumer to using the software for noncommercial use, he uses it for commercial use. proCD sues, customer argues that placing the software on the shelf was the offer and him buying it was the acceptance and it only includes only the terms that he could see upon buying.
Issue- does the buyer have to comply with the terms of a shrinkwrap license?
Should terms in the shrinkwrap agreement be put on the outside of an item for consumers to read in order to make it binding.
the buyer has to comply with the terms of the shrinkwrap license, and their continued use of the item shows assent to the additional terms in the shrinkwrap agreement
hill v gateway
customers bought a computer via a telephone order, they got a box with the computer and it came with terms that will govern UNLESS the customer returns the computer within 30 days; one of the terms was an arbitration clause. After the 30 days P stil had the computer in their possession and had problems with the computer, P sued D for fraud
issue - are the terms that come later included in a contract?
Under the Uniform Commercial Code, a purchaser may be bound to terms included in product packaging if the purchaser has an opportunity to review the agreement and reject it by returning the product.
kloeck v gateway
Facts- P purchased computer that came with later terms in a standard term notice which said that all disputes had to be arbitrated. The form said that the consumer accepted the terms and conditions by keeping the computer for more than five days. P tried to sue.
Issue- did the term about arbitration govern the agreement, and does the UCC 2-207 govern where only one party was sending forms?
Additional or different terms provided in the acceptance do not become terms of the contract unless acceptance is made expressly conditional upon acceptance of the additional terms or the non-merchant offeror expressly agrees to the additional terms.
ucc 2-207 addtion of terms - added terms if not btwn merchants
any addtional terms are treated as proposals, even if it is unimportant/non material alterantion
it only becomes part of the agreement if expressly agreed to by the non merchant
ucc 2-207 addtion of terms– added terms between merchants
if both parties are merchants, the addtional terms in the offerees response can be added as part of the K UNLESS the three provsions happen; if the three are there, then they are just propsals
what are the three cases in ucc 2-207 btween merchants where the terms wont be automatically added and will just be treated as proposals
if the addtion to the term is a condtion to the acceptance
if its a material alteration
if they object to it in a timely manner
