Contracts: Offers and Advertisements - Class 5

CONTRACTS Class 5 Plan Review Advertisement, reward, offer After the offer Requirements for an offer Communication Shows intent to be bound Sufficiently clear essential terms Invites acceptance/acceptance will create K To a specific person or group of people Hypo Peter...

CONTRACTS Class 5 Plan Review Advertisement, reward, offer After the offer Requirements for an offer Communication Shows intent to be bound Sufficiently clear essential terms Invites acceptance/acceptance will create K To a specific person or group of people Hypo Peter tells Grace, “I am eager to sell my house. I would consider $400,000 for it.” Grace promptly answers, “I will buy your house for $400,000 cash.” Valid offer from Peter? Valid offer from Grace?  Hypo Kaylen posted the following ad online: “Ferguson Farm for sale. $50,000 or best offer.” Katie texted Kaylen, “Interested in purchasing Ferguson Farm.” Kaylen texted back, “Let me know, I have other offers.” The next day, Katie texted Kaylen that says she opened escrow with instructions for the escrow agent to pay Kaylen $50,000 on receipt of good title for FF. Kaylen texted back, “Sorry, Katie, I sold Ferguson Farm to Elly this morning.” Any valid offers? Advertisements Generally, not offers: invitations for those seeing the advertisement to make an offer Except when clear, definite, and nothing is left to negotiate  Leonard v. Pepsico Commercial UCC or common law? Parties? Pepsi Logo Remedy?  Procedure Leonard demanded the jet Pepsico sued for declaratory judgment. Why? Leonard then sued for SP; Pepsico filed MSJ Pepsi Logo Trial (district) court opinion—no appeal Issues Was the commercial a valid offer that Leonard could accept? Was this a reward? What facts mattered? Music Teen preening Landing next to a bike rack Authority figure losing his clothes “Sure beats the bus”  Rules for advertisements Not normally intended or understood as offers Mere requests to consider, examine, and negotiate Do not create the power of acceptance May be an offer if there is language of commitment or invitation to take action without further communication (R2K 26) Ad does not become an offer through an order form or someone’s desire to accept  No Indefinite, left details in the catalog No specific person could accept Was the commercial Not a reward or a unilateral K an offer? No objective reasonable person could have concluded the commercial was an offer Bilateral vs. unilateral Ks? Bilateral Unilateral Most Ks The only way to accept is Acceptance through promise through performance or performance If the offer does not indicate the manner of acceptance, courts will treat the K as bilateral Consider If internal communications were produced that show Pepsico clearly did not intend to offer anyone a Harrier jet, would that be relevant? Would this commercial create a valid offer for the sunglasses in exchange for 175 points? How do you distinguish this case from Lucy? Sprint Island Commercial Offer? Lefkowitz v. Great Minneapolis Surplus Store, Inc. Common law or UCC? Parties? Remedy*  Saturday 9 A.M. Sharp 3 Brand New Fur Coats Worth to $100.00 First Come First Served $1 Each Saturday 9 A.M. 2 Brand New Pastel Mink 3-Skin Scarfs Selling for $89.50 Out they go Saturday. Each... $1.00 1 Black Lapin Stole Beautiful, worth $139.50...$1.00 First Come First Served Advertisements  Coats: Lefkowitz showed up first, dollar in hand, but the store refused to sell, noting a “house rule” that the sales were only for women. Next week, did the same for the stole. Again, the store said no and reminded P of the house rule. Customer sued the store alleging there was an offer he accepted. Facts  Whether an advertisements is an offer depends on “whether the facts show that some performance was promised in positive terms in return for something requested.” Offer if clear, definite, and explicit and leaves nothing open for negotiation. Rules, principles  P could not recover on the coats Value was uncertain – worth to $100 Offer must be sufficiently certain to determine the existence of a bargain and give a remedy Start with the coats  Valid offer: valued at $139.50. Ad was clear, definite, and explicit—it left nothing to negotiate Terms were clear: first person, particular day, exchange What about the house rule? Stole Mesaros v. U.S. Common law or UCC? Parties? What is a class action? Remedy? Facts Statute of Liberty coins Interested parties had to return an order form & check, money order, or credit card form. Those who paid by check or money order received the coins; some of those who paid by CC did not. Rules, principles? Generally, goods advertised at a certain price not an offer Instead, an invitation to bargain Customer’s belief that the ad or form was an offer has to be objectively reasonable Were the advertisements offers? No. An “invitation to deal.” No power of acceptance. Distinguishes Lefkowitz Carlill v. Carbolic Smoke Ball Common law or UCC? Parties? Remedy? Carlill v. Carbolic Smoke Ball £100 reward to any person who bought the device, used the device, and then caught the flu. Company deposited £1000 with a bank to show its sincerity. Carlill bought the device, used it, and caught the flu. Was the ad an offer? Yes, the ad was an offer—express promise. Limited to people who bought and used the ball (performed the condition) Unilateral contract: if the customer buys the product, uses it, and then still gets sick, they have performed and are entitled to fulfillment of the promise, i.e. £100. Emirates Covid offer Emirates customers can travel with confidence, as the airline will cover medical expenses of up to EUR 150,000 and quarantine costs of EUR 100 per day for 14 days, should they be diagnosed with COVID-19 during their travel, while they are away from home. This cover is provided by the airline, free of cost to its customers. Dateline Dare (pg. 95) Court held this was not an offer. Just as people are free to contract, they are also free from contract, and we find it neither prudent nor permissible to impose contractual liability for offhand remarks or grandstanding. Having considered the content of Mason’s statements, the context in which they were made, and the conduct of the parties, we do not find it reasonable to conclude that Mason assented to enter into a contract with anyone for one million dollars.  Offer Revocation Acceptance Rejection Counteroffer Offeror Acceptance Rejection makes a (by offeror) counteroffer Bilateral vs. unilateral Ks? Bilateral: promise for a Unilateral: promise for promise or performance performance Most Ks In most instances, it does If the offer does not not matter that OO does indicate the manner of not know that a party acceptance, courts will has started performance. treat the K as bilateral Ways the power of acceptance may be terminated (R. § 36) Rejection by Counteroffer by Lapse of time offeree offeree Non-occurrence of Death or incapacity Revocation by any conditions of offeror or offeror accepted under the offeree terms of the offer