THE FOUNDATIONS OF CONTRACT LAW Professor Helen Hartnell, Juris Doctor Introduction to the U.S. Legal System U.S.-amerikanische Rechtssprache mit Einführung in das U.S.-amerikanische Recht Juristische Lehrveranstaltung Nr. 2055 Universität zu Köln Winter Semester 2005/06 27 January 2006 Overview • Formation of Contract – Mutual Assent – Consideration • Promissory Estoppel • Damages in Contract Mutual Assent • Offer – Offeror determines the nature of acceptance that will suffice to form a contract • Promise-for-performance: unilateral contract – Brooklyn Bridge hypothetical • Promise-for-promise: bilateral contract – Offeror can revoke offer prior to acceptance by offeree, except: • “Option contract” = offeror promises to keep offer open for a period of time; must be supported by consideration to be binding • Uniform Commercial Code (UCC) Article 2 (Sales) = binding offer is possible in commercial transactions; no consideration required • Acceptance – Effective upon receipt by offeror, except: • Mailbox Rule = acceptance effective when deposited in mail box, even if prior to receipt by offeree Consideration • Definition – Quid pro quo – Must be bargained-for – But need not be “adequate” • E.J. Baehr v. Penn-O-Tex Oil Corp., 258 Minn. 533, 104 N.W.2d 661 (1960) Promissory Estoppel • Restatement Second of Contracts, § 90: A promise, which the promisor should reasonable expect to induce reliance or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. • Feinberg v. The Pfeiffer Company, 322 S.W.2d 163 (Ct. Appeals Missouri, 194?) Damages in Contract • Hawkins v. McGee = “The Hairy Hand Case” – Facts: doctor operated on patient’s hand, promised the hand would be “as good as a new hand” – What measure of damages can plaintiff claim? • Expectation interest – The value of the hand as promised … the “benefit of the bargain” • Reliance interest – Hospital costs – Pain & suffering • Are these two measures of damages compatible?
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