Mutual Assent Flashcards
Ray v. William G. Eurice & Bros., Inc. (1952)
♣ Facts: 2 brothers agree to build a house for Rays; only 1 brother sees the specifications and both signs; later other brother refuses to build home b/c specs are unreasonable
♣ Rule: Mutual assent is determined by what a reasonable person in the position of the parties would have thought it meant NOT what the party making it meant or intended to mean
Skrbina v. Fleming Co.
♣ .: π signed release from employer to get severance pay barring other claims; court upholds release b/c π willingly signed it.
Lucy v. Zehmer
contract upheld past dealings made it reasonable for buyer to believe that land seller was not joking and seller should reasonably have known
Leonard v. Pepsico, Inc.
no reasonable viewer could think that jet was redeemable for Pepsi points
Lonergan v. Scolnick
Facts: π sees ad for land; replies asking for description, directions and suggesting a bank; replies that bank is O.K. but tells buyer to decide in 1 week; π doesn’t respond w/in week and sells.
Rule: An offer is not made if the person to whom the offer is addressed reasonably knows that further assent is required; no contract exists w/o meeting of the minds
Izadi v. Machado (Gus) Ford, Inc.
Facts: Ad in paper for car is deceptive and π refuses to honor it; claims ad is an offer
Rule: Communications should be interpreted as a reasonable person would interpret them regardless of secret intention of the person making it (objective theory of contract)
Ads are not offers unless they invite acceptance w/o further negotiations in clear, definite, express, unconditional language
o Normille v. Miller (1985)
♣ Facts: Normille attempts to buy real estate from ; N submits bid and responds with counteroffer; N thinks that he has an option to purchase so waits to think about it; sells
♣ Holding: no contract; option to purchase to exist when the counteroffer was made; notice of revocation given indirectly by the broker before N tried to accept
♣ Rule: a counteroffer is a rejection of the original offer
• CL: Offers are revocable at any time before acceptance
o Notice of revocation must be communicated to offeree to effectively terminate their power to accept
♣ Notice can be received indirectly so long as its reliable
• Option contracts must be supported by consideration
Cook v. Coldwell Banker/Frank Laiben Realty Co.
♣ Facts: brokerage appeals from judgment award to former broker for breach of bonus agreement
♣ Holding: promise to pay bonus for continued employment is an offer for a unilateral contract which becomes enforceable by employee’s performance
♣ Rule: An offer to enter a unilateral contract may not be revoked once the offeror has rendered substantial performance; in a unilateral contract the offer may not be revoked where the offeree has accepted the offer by substantial performance
Sateriale v. R.J. Tobacco Co. (2012)
Facts: Ran bucks program. Decided to unwind program, gave people 6 months to redeem. However, they stopped accepting the bucks. People sued for value etc.
Holding: They were trying to sell as many cigs a possible, not a limited amount of goods. They had complete control of the offer, so
Rule: An advertisement constitutes an offer when the advertiser, in clear and positive terms, promised to render performance in exchange for something, and the recipient of the advertisement reasonably might have concluded that by acting in accordance with the request a contract would be formed.
Walker v. Keith (1964)
Facts: Lease option. Missing essential term, I.E. price.
Rule: To be enforceable and valid, a contract to enter into a future covenant must specify all material and essential terms and leave nothing to be agreed upon as a result of future negotiations.
Quake Construction, Inc. v. American Airlines
Facts: Quake subcontractor, “awarded the position”. Letter of intent, announced as the contractor at a meeting. Conduct indicated that there was a contract…therefore..
Rule: A letter of intent to enter into a contract may be enforced.
