contract case brief.docx

contract case brief.docx

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contractcasebrief

Lonerganv.Scolnick–CaseBriefSummary

Summaryof Lonerganv.Scolnick,129Cal.App.2d179,276P.2d8（Cal.Ct.App.1954）.

Facts

Scolnick（D）soughttosellcertainrealpropertyandplacedthefollowingadinaLosAngelespaper:

‘JoshuaTreevic.40acres,...needcash,willsacrifice.’Lonergan（P）answeredtheadandScolnickwrotetohimdescribingthepropertyandprovidingdirections,andstatedthathisrock-bottompricewas$2,500cash.

LonerganwrotetoScolnicktoaskfordetailsregardingthepreciselocationoftherealestateandtorecommendanescrowagent“shouldIdesiretopurchasetheland.”Scolnickrepliedthenextdayandtoldhimtodecidequicklybecauseheexpectedtohaveabuyerwithinaweek.Scolnicksoldthepropertyfourdayslater.TwodayslatertheplaintiffreceivedScolnick’sletterandrepliedthenextdaythatheacceptedtheoffer.

Lonerganbroughtthislawsuitallegingthatthedefendanthadbreacheda contract toselltheland.Theplaintiffclaimedthatthelandwasworth$6,081andsoughtthedifferencebetweenthatandtheaskingpriceof$2,500.Defendantdeniedthatacontracthadformed.ThetrialcourtfavorofScolnickandLonerganappealed.

Issue

∙Musttherebeamanifestationofcontractualintentinordertocreateanenforceablecontract?

HoldingandRule

∙Yes.Theremustbeamanifestationofcontractualintentanditmustbeunequivocalandshowthatthepartiesintendedtocreateabindingagreement.

Therecanbenocontractunlesstherehasbeenameetingofthemindsandthepartieshavemutuallyagreeduponsomespecificthing.Thisisusuallyevidencedbyonepartymakinganofferwhichisacceptedbytheotherparty.Section25oftheRestatementoftheLawonContractsreads:

‘Iffromapromise,ormanifestationofintention,orfromthecircumstancesexistingatthetime,thepersontowhomthepromiseormanifestationisaddressedknowsorhasreasontoknowthatthepersonmakingitdoesnotintenditasanexpressionofhisfixedpurposeuntilhehasgivenafurtherexpressionofassent,hehasnotmadeanoffer.’

Thecourtheldthatthelanguageusedbythedefendantinhislettersindicatedthattheywerenotintendedasanexpressionoffixedpurposetomakeadefiniteoffer.Theadvertisementinthepaperwasamererequestforanoffer.TheletterofMarch26containednodefiniteofferbecauseitmerelygavefurtherparticularsandtoldtheplaintiffhowtolocatethepropertyifinterested.TheletterofApril8answeredsomequestionsaskedbytheplaintiff,andstatedthatifhewerereallyinterestedhewouldhavetoactsoon.Thatthedefendantexpectedabuyerinashorttimeindicatedthatheintendedtoselltothefirst-comer.Lonerganwasnotbeinggivenarighttoactwithinareasonabletimeafterreceivingtheletter.

Disposition

JudgmentforScolnickaffirmed.

Notes

Manifestationofcontractualintentisdeterminedbytheobjectivepersonstandardofareasonablepersonstandingintheshoesoftheofferee.

Lonerganv.Scolnick

Facts:

∙Dpostedanadinanewspaperaboutsomelandheneededtosellurgently.Psawtheadandinquiredaboutit.

∙DsentPinformationabouttheproperty,alongwithdirectionstogettoit.Dstatedthattherock-bottompricewas$2500;Dalsomadesurethattheletterpurporteditselftobea"formletter".

∙PwrotetoDaskingformoreinfoonthelandandsuggestinganescrowservice"should[he]desiretopurchasetheland".

∙DwrotebackgivingthelegaldescriptionofthelandandsayingthatifPwasreallyinterested,heshoulddecidequicklysinceDexpectedtohaveabuyerinaweekorso.

∙Dsoldthepropertytoathirdparty.

∙Threedayslater,PopenedanescrowaccountandsentDalettertellinghimthathewaspurchasingtheland.

∙Uponfindingoutthatthelandhadalreadybeensold,PsuedDforbreachofcontract. 

ProceduralHistory:

∙LowercourtfoundforD,saidthattheDmadeanofferwhichwasqualifiedandconditioneduponpromptacceptancebyP.SincePdelayed,contractwasnotenteredupon.

∙CACOAaffirmed,foundforD,nocontract,butfortotallydifferentreasonsthanthelowercourt.

Issues:

∙Whereisthelinebetweencontractnegotiationandcontractformation?

∙Doesanadvertisementqualifyasanoffer?

Holding/Rule:

∙Acontractisofficiallyformedwhenonepartymakesanofferandtheotherpartyassentstotheoffer.

∙"If…thepersontowhomthepromiseisaddressedknowsorhasreasontoknowthatthepersonmakingitdoesnotintenditasanexpressionofhisfixedpurposeuntilhehasgivenafurtherexpressionofassent,hehasnotmadeanoffer."

∙Anadvertisementisamererequestforanoffer.

Reasoning:

∙Thecanbenocontractunlessthemindsofthepartieshavemetandmutuallyagreeduponsomespecificthing.

∙ThecorrespondenceindicatedanintentiononthepartoftheDtofindoutwhetherthePwasinterested,notanintentiontomakeadefiniteoffertotheP.

∙ThestatementthatDexpectedtohaveabuyerinthenextweekorsoindicatedthatDintendedtoselltothefirst-comerandwasreservingtherighttodoso.

oPshouldhaveknownthathewasnotbeinggiventimetoacceptanoffer,butthatsomefurtherassentonthepartoftheDwouldberequired.

Dissent:

None.

Notes:

"Manifestationofcontractualintent"isrequiredtoformabindingcontractandisjudgedusingthe"reasonableperson"standard.

Davisv.Jacoby–CaseBriefSummary

Summaryof Davisv.Jacoby,34P.2d1026（1934）.

Facts

BlancheWhiteheadandherhusbandRupertenjoyedacloserelationshipwiththeirnieceCaroDavis（P）.TheWhitehead’ssufferedhealthandfinancialdifficultiesandRupertaskedDavistocometoCaliforniatohelptakecareofBlancheandassistRupertwithhisbusinessaffairs.Shewaspromisedaninheritanceinreturnforherassistance.

OneweekafterDavisagreedRupertcommittedsuicide.DavismovedtoCaliforniatocareforBlanche.UponBlanche’sdeathDavislearnedthatRuperthadlefthisentireestatetotwonephews.

DavissuedRupert’sestate（Jacoby,D）,assertingthatheragreementwithRuperthadcreatedacontractualobligationforhimtomakeawillandbequesthisestatetoherandthatshewasentitledtoquasi-specificperformance.Davisappealedthetrialcourt’srulinginfavoroftheestatethatnocontracthadbeenformedbecauseRuperthadmadeaunilateralofferthatcouldonlyhavebeenacceptedviaperformance.

Issue

Whattypeofofferispresumedtohavebeenmadewheretheofferisambiguousastowhetheritisunilateralorbilateral?

Rule

Anofferispresumedtobebilateralifitisambiguouswithregardtowhetheritisunilateralorbilateral.

ThecourtpointedtoRupert’sstatement“Willyouletmehearfromyouassoonaspossible…”asarequestforanimmediatereplysothathecouldmakearrangementsandrelyonDavis’spromisetocometoCalifornia.Furthermore,sinceRupertaskedhertotakecareofthemuntilbothofthemhaddied,itwasapparentthathehadtorelyonDavis’spromisetocontinuetocareforBlancheifshesurvivedhim.

Disposition

Judgmentfortheestatereversed.

Akersv.J.B.Sedberry,Inc.–CaseBrief

Facts:

Sedberry（D）,throughmajorityshareholderMrs.Sedberry,enteredintoacontractwithAkers（P）wherebyAkerswouldserveasChiefEngineerforfiveyears.SedberryenteredintoasimilarfiveyearemploymentcontractwithWhitsitt（P）.AkersandWhitsittweretoperformtheirdutiesattheJayBeeManufacturingCompanyinTyler,Texas.

Mrs.SedberrylaterpurchasedstockinJayBeeownedbyJayBee’sgeneralmanager,whowasthenreplacedbySorenson.PshaddifficultyworkingwithSorensonandJayBeeowedlargeamountsofmoneytoabankwhoseofficialswereconcernedthecompanywouldfailunderSorenson.ThebankaddresseditsconcernstoPs,whothenmetwithSedberrywithoutSorenson’sknowledgetodiscusspossibilitiesfortherefinancingofJayBee.Asashowofgoodfaith,Psofferedtheirresignationsonninetydaysnotice;Sedberryrefused.PsreturnedtoJayBeewithinstructions;however,thenextdayMrs.SedberryinformedPsthattheirresignationswereacceptedeffectiveimmediately.

PssuedDforbreachoftheiremploymentcontractsandcontendedthatMrs.Sedberryhadrefusedtheirresignationsandthatnoofferremainedopen.ThetrialcourtawardeddamagestoPsandDappealed.

Issue

 Iftwopartiesareineachother’spresenceandonepartyextendsanofferwithoutindicatinganytimeperiodforacceptance,forhowlongwilltheofferremainopen?

HoldingandRule

 Iftwopartiesareineachother’spresenceandonemakesanofferwithoutindicatinganytimeforacceptance,aninferencewillbedrawnthatthatofferwillnotextendbeyondthetimeoftheconversationunlessspecialwordsorcircumstancesindicateacontraryintentiononthepartoftheofferor.

Anemployee’stenderofresignationisnotbindinguntilithasbeenacceptedbytheemployer.Suchanoffermustbeacceptedaccordingtoitstermsandwithinthetimefixed.Anoffermaybeterminatedby:

1）rejection,or2）failuretoacceptwithinthetimefixed,or3）failuretoacceptwithinareasonabletimeifnotimeisfixed.

Adeterminationofwhatconstitutesa“reasonabletime”isaquestionoffactdependingonthenatureofthecontractproposed,usagesofbusiness,andotherfactualcircumstances.Anoffermadebyonetoanotherfacetofaceisdeemedtocontinueonlytothecloseoftheirconversationandcannotbeacceptedthereafter（Restatement（2d）ofContracts40）.

ThecourtheldthatinthiscasePs’facetofaceofferwasterminatedwhenMrs.Sedberryrejectedit.TheattemptbyDtoterminatethecontractthefollowingdaywasabreachandPswereentitle