TodayBilateral vs. Unilateral ContractsExpress vs. Implied ContractsFour Elements of a ContractAgreementComponents of AgreementScenario 1DefinitenessScenario 2Scenario 2 (cont.)Scenario 3Unjust EnrichmentScenario 4Before Acceptance OccursScenario 5AcceptanceScheduleToday•Finish terminology from chapter 11•Apply chapter 12Bilateral vs. Unilateral Contracts•Bilateral: promise for a promise•Unilateral: promise for an act•Contests: Texas A&M vs. South Carolina•Furniture purchased between 8/16 – 8/27•Free, if A&M wins by at least 10 points•Over $1 million of furniture was purchasedExpress vs. Implied Contracts•Express: words of the contract•Implied: conduct, not words•Example: late payments on rent•Contract states “$25 fee if rent is paid late”Four Elements of a Contract•Agreement•Consideration•Capacity•LegalityAgreement•“meeting of the minds”•“reasonable person standard”•Would a reasonable person think there was an agreement, a meeting of the minds?Components of Agreement•Agreement = Offer + Acceptance•Valid offer•Intent•Definiteness•CommunicationScenario 1•“I’ll buy your house for a fair price.”•“You’ve got a deal.”•Enforceable contract?•No. Lacks definiteness.•Would a reasonable person conclude there was a meeting of the minds?Definiteness•Definiteness depends on facts of each case.•Key items to look for:•Subject matter•Quantity•Price•TimingScenario 2•Ceramic grinders: transfer or quit (six months’ severance)•“We’ll give you all the work you can handle. We’d like to give you all our grinding work.”•Currently, $10,000 per month in grinding work•Valid contract?•Court: promises were too vague, so no contract•Fairness vs. Law (ethics vs. legality)Scenario 2 (cont.)•Court opinion, ceramic grinders case:•“A person of principle and character would keep his word; but if his word is sufficiently imprecise, the law will not force him to do so.”Scenario 3•Sopranos TV show: aspiring writer pitches established producer•Writer rejects hourly rate•Producer: “Okay, I’ll take care of you if the show succeeds”•Contract?•No. Also too vague. •But what about unjust enrichment?Unjust Enrichment•No contract, but unfair result•Flexibility of common law (equitable remedy)•One party benefits at the expense of another•Unjust enrichment is only applicable if there is no contract.Scenario 4•Bob and Jane having breakfast…•Need to pay for landscaping work?•Enforceable contract? Unjust enrichment?Unjust enrichment1) No contract, but2) benefit given3) with opportunity to reject4) and expectation of payment•Sopranos case?Before Acceptance Occurs•Revocation of the offer•Express revocation – valid when received•Expiration date•Termination of the offer•By the parties•By operation of lawScenario 5•House for sale for $55,000 in Missouri•Offer at $40,000 rejected•Offer at $55,000 accepted, with crossed out closing date•Closing date on May 15 or June 1? Buyer disappears…•Valid contract?•Court: new closing date is a counteroffer, which terminates previous offer and creates a new offer, which may or may not be accepted.Acceptance•Mirror image rule•Valid acceptance cannot add or subtract terms•Counteroffers•Ping pong ball analogySchedule•Thursday•Finish chapter 12 (agreement)•Begin chapter 13