A contract is a promise or 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.

Contract = manifestation of mutual assent (MMA) + enforceability

RS 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 to justify a promisee in understanding that a commitment has been made.

(2) The person manifesting the intention is the promisor.

(3) The person to whom the manifestation is addressed is the promisee.

(4) Where performance will benefit a person other than the promisee, that person is a beneficiary. 

RS 4: How a Promise May be Made

An agreement is a manifestation of mutual assent (offer + acceptance) on the part of 2 or more persons.

A bargain is an agreement to exchange promises or to exchange a promise for a performance or the exchange of performances.

(1) Formation of a contract requires a manifestation of mutual assent and a consideration

(1) The manifestation of assent may be made wholly or parly by written or spoken words or by other acts or by failure to act.

(2) The conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that hte other party may infer from his conduct that he assents.

(3) The conduct of a party may manifest assent even though he does not in fact assent.  In such cases a resulting contract may be voidable because of fraud, duress, mistake, or other invalidating causes.

An offer cannot be accepted to form a contract unless the terms of the contract are reasonably certain - there must be a basis for determining breach and for giving an appropriate remedy.

• If one or more terms are left open or uncertain, the manifestation of intention may not be intended as an offer or acceptance.

(1) The manifested intention of the offeror determines the person or persons in whom is created a power of acceptance.

(2) An offer may create a power of acceptance in a specified person or in one or more of a specified group or class of persons, acting separately or together, or in anyone or everyone who makes a specified promise or renders a specified performance.

RS 35: Power of Acceptance

RS 36: Methods of Termination of Power of Acceptance

(1) An offer gives to the offeree a continuing power to complete a manifestation of mutual assent by acceptance of the offer.

(2) A contract cannot be created by acceptance of an offer after the power of acceptance has been terminated in one of the following ways.

(1) Rejection by offeree, (2) counter-offer, (3) lapse of time, (4) revocation by offeror, (5) death or incapacity of offeror or offeree.

RS 42-47: Revocation

RS 42: Revocation by Communication

The offeror is free to revoke his offer at any time before it is accepted (except in option contracts)

A revocation by the offeror does not become effective until it is received by the offeree.

(1) An offer may invite or require acceptance to be made by an affirmative answer in words, or by performing or refraining from performing specified act, or may empower the offeree to make a selection of terms in his acceptance.

(2) Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances.

(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.

(2) The offeror's duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.

RS 87(2): Option Contract

(1) No notice is required unless the offer requests such notification

(2) If an offeree accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty, the contractual duty of the offeror is discharged unless:

(a) the offeree exercises reasonable diligence to notify the offeree or of acceptance, or

(b) the offeror learns of the performance within a reasonable time, or

(c) the offer indicates that notification of acceptance is not required.

(1) Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance.

(2) Such an acceptance operates as a promise to render complete performance.

(1) Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only:

(a) Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation.

(b) Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.

(c) Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intent to accept.

(2) An offeree who does any act inconsistent with the offeror's ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable.  But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.

Unless the offer provides otherwise, 

(a) an acceptance made in a manner by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree's possession, without regard to whether it ever reaches the offeror; but

(b) an acceptance under an option contract is not operative until received by the offeror.

(1) Words/conduct interpreted in light of all circumstances.

(2) Writing interpreted as a whole, all writings part of same transaction interpreted together.

(3) Unless different meaning manifested:

(a) Interpreted in accordance with general prevailing meaning.

(b) Technical terms or terms of art are given their technical meaning when used in a transaction of that field.

(4) Course of performance accepted is given great weight.

(5) When reasonable, manifestation of internet interpreted consistent with each other AND with course of performance and course of dealing, usage of trade.

(1) Where the parties have attached the same meaning to a promisor agreement or a term, it is interpreted in accordance with that meaning.

(2) Where the parties have attached different meanings to a promise or agreement or a term, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made:

(a) that party did not know of any different meaning attached by the other, and the other knew the meanings attached by the first party; or

(b) that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the other, and the other had reason to know the meaning attached by the first party.

(3) Except as stated in this Section, neither party is bound by the meaning attached by the other, even though the result may be failure of mutual assent.

Course of dealing - sequence of pervious conduct between the parties which is fairly to be regarded as establishing a common basis of understanding for interpreting their expressions and other conduct.

Usage of Trade - Any practice or method of dealing having such regularity of observance in a place, vocation or trade, as to justify an expectation that it will be observed with respect to the transaction in question.

(1) Where the contract for sale involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted without objection shall be relevant to determine the meaning of the agreement.

(2) The express terms of the agreement and any such course of performance, as well as any course of dealing and usage of trade, shall be construed whenever reasonable as consistent with each other; however, express terms trump both UoT and CoD.

(3) Such course of performance shall be relevant to show a waiver of modification of any term inconsistent with such course of performance.

(1) The terms of a contract may be reasonably certain even though it empowers one or both parties to make a selection of terms in the course of performance.

(2) Part performance under an agreement may remove uncertainty and establish that a contract enforceable as a bargain has been formed.

(3) Action in reliance on an agreement may make a contractual remedy appropriate even though uncertainty is not removed.

(1) (Usually enforceable) Where a party to an agreement signs or otherwise manifests assent to a writing and has reason to believe that like writings are regularly used to embody terms of agreements of the same type, he adopts the writing as an integrated agreement with respect to the terms included in the writing.

(2) Such a writing is interpreted wherever reasonable as treating alike all those similarly situated, without regard to their knowledge or understanding of the standard terms of the writing.

(3) Where the other party has reason to believe that the party manifesting such assent would not do so if he knew that the writing contained a particular term, the term is not part of the agreement.

(1) 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 construed as proposals for addition 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; or

(c) Notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract.  In such cases, the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this act.

(1) A binding integratd agreement discharges prior agreements to the extent that it is inconsistent with them.

(2) A binding completley integrated agreement discharges prior agreements to the extent that they are within its scope.

(3) An integrated agreement that is not binding or that is voidable and avoided does not discharge a prior agreement.  But an integrated agreement, even though not binding, may be effective to render inoperative a term which would have been part of the agreement if it had not been integrated.

(1) An integrated agreement is a writing or writings constituting a final expression of one or more terms of an agreement.

(2) Courts must determine whether an agreement is integrated before applying PER.

(3) Where the parties reduce an agreement to writing which in view of its completeness and specificity reasonably appears to be a complete agreement, it is taken to be an integrated agreement unless it is established by other evidence that the writing did not constitute a final expression.

(1) A completely integrated agreement is an integrated agreement adopted by the parties as a complete and exclusive statement of the terms of the agreement.

(2) A partially integrated agreement is an integreated agreement other than a completely integrated agreement.

(3) Courts must determine whether an agreement is completely or partially integrated before applying PER.

(1) Evidence of a consistent additional term is admissible to supplement an integrated agreement unless the courts finds that the agreement was completely integrated.

(2) An agreement is not completley integrated if the writing omits a consistent additional agreed term which is

(a) Agreed to for separate consideration, or

(b) Such a term as in the circumstances might naturally be omitted from the writing.

Agreements and negotiations prior to or contemporaneous with the adoption of a writing are admissible in evidence to establish:

(a) that the writing is or is not an integrated agreement.

(b) that the integrated agreement, if any, is completely or partially integrated;

(c) the meaning of the writing, whether or not integrated;

(d) illegality, fraud, duress, mistake, lack of consideration, or other invalidating cause;

(e) ground for granting or denying rescission, reformation, specific performance, or other remedy.

Terms with respect to which the confirmatory memoranda of the parties agree or which are otherwise set forth in a writing intended by the parties as a final expression of their agreement with respect to such terms as are included therein may not be contradicted by evidence of any prior agreement or of a contemporaneous oral agreement but may be explained or supplemented.

(a) by course of performance, course of dealing, or usage of trade, and

(b) by evidence of consistent additional terms unless the court finds the writing to have been intended also as a complete and exclusive statement of the terms of the agreement.

(1) The following classes of contracts are subject to the Statute of Frauds, forbidding enforcement unless there is a written memorandum or an application exception:

(a) Land Contracts:sale of interest in land

(b) Suretyship: contract to answer for debt of another

(c) Contracts that cannot be performed within one year

(i) Effective from the time the contract is made until the time of full performance.

(ii) When an agreement CAN be performed within 1 year, but it may not, it does not fall within the Statute of Frauds (ie death)

(e) Executor-administrator: a contract of an executor or administrator to answer for a duty of his decedent.

(f) UCC 2-201 : Contracts for the sale of goods over $500.

(1) A promise to transfer to any person any interest in land is within the SoF.

(2) A promise to buy an interest in land is within the SoF, irrespective of the person to whom the transfer is made.

(3) When a transfer of an interest in land has been made, a promise to pay the price, if originally within the SoF, ceases to be within it unless the promises price is itself in whole or in part an interest in land.

(4) Statutes in most states except from the land contract and one-year provisions of the SoF short term leases and contracts to lease, usually for a term not longer than one year.

(1) A promise which the promisor show reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding the SoF if injustice can be avoided only by enforcement of the promise.  The remedy granted for breach is to be limited as justice requires.

(2) In determining whether injustice can be avoided only by enforcement of the promise, the following circumstances are significant:

(a) availability and adequacy of other remedies, particularly cancellation and restitution;

(b) definite and substantial character of the action or forbearance in relation to the remedy sought.

(c) extent to which the action or forbearance corroborates evidence of the making and terms of the promise, or the making and terms are otherwise established by clear and convincing evidence;

(d) reasonableness of the action or forbearance

(e)extent to which the action or forbearance was foreseeable by the promisor.

(1) Where any promise in a contract cannot be fully performed within a year from the time the contract is made, all promises in the contract are within the SoF until one party to the contract completes his performance.

(2)When one party to a contract has completed his performance, the one year provision of the SoF does not prevent enforcement of the promises of the other parties.

Unless additional requirements are prescribed by the particular statute, a contract within the SoF is enforceable if it is evidenced by any writing, signed by or on behalf of the party to be charged, which 

(a) Reasonably identifies the subject matter of the contract

(b) is sufficient to indicate that a contract with respect thereto has been made between the parties or offered by the signer to the other party, and 

(c) states with reasonable certainty the essential terms of the unperformed promises in the contract.

A writing satisfies the Sof if it is sufficient to indicate that a contract for the sale has been made between the parties and is signed by the party against whom enforcement is sough.

(1) Between merchants, the memorandum is also enforceable against the party who does not sign it, unless the recipient objects within 10 after receiving the confirmation.

(1) To constitute consideration, a performance or a return promise must be bargained for.

(2) A performance or return promise is bargained for it if it sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise.

(3) The performance may consist of

(a) An act other than a promise, or

(b) A forbearance, or

(c) The creation, modification, or destruction of a legal relation.

(4) The performance or return promise may be given to the promisor or to some other person.  It may be given by the promisee or by some other person.

(1) A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.

(2) A promise is not binding under (1):

(a) if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or

(b) to the extent that its value is disproportionate to the benefit.

A promise modifying a duty under a contract not fully performed on either side is binding:

(a) If the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made, or

(b) To the extent provided by statute, or

(c) to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

If the requirement of consideration is met, there is no additional requirement of

(1) a gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promisee; or

(2) Equivalence in the values exchanged; or

(3) "Mutuality of obligation"

Goal is to put the injured party in the position he would be in if the contract had not been breached.  Give P the benefit of the bargain, including any profits he would have made from the contract.

Measured by:

(a) Loss in value to him of the other party's performance caused by the other party's failure or deficiency

(b) any other loss, including incidental or consequential loss, caused by the breach (not anticipated costs of performance), less

(c) any other cost or other loss that he has avoided by not having to perform.