Transcript Class 12, Friday, Feb. 3

Class 12, Friday, Feb. 3
Announcements
Tuesday
270-89
Thursday
221-40
Friday
240-54, including Problem 3-4
Today’s agenda
Pop’s Cones v. Resorts Int’l Hotel
Problem 3-1
Problem 3-2
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Today is a good day to try to help
Professor Chang find a new
home for his family’s dog.
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Tyler
• mid-size, 40 pounds
• mutt, looks like a
small lab
• energetic
• loyal
• male, neutered
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90 versus 87(2)
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§87
(2) An offer which the offeror should
reasonably expect to induce action or
forbearance of a substantial character on
the part of the offeree before acceptance
and which does induce such action or
forbearance is binding as an option
contract to the extent necessary to avoid
injustice.
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Pop’s Cones, Inc. v. Resorts
International Hotel, Inc.
207 N.J. Super. 461, 704 A.2d
1321 (1998)
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Merv Griffin, entertainer and
entrepreneur extraordinaire
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Who is suing whom?
For what kind of damages?
What is the legal basis for the claim?
What is the factual basis for the claim?
Arguments/defenses?
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What happened at the trial court level?
What happened on appeal?
Issue?
Authorities/Rule?
Application to facts in case?
What policies does it further/ignore?
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Resorts International Hotel
http://www.resortsac.com/
Host Marriott
franchisee
Brenda Taube, President
Pop’s Cones, franchisee
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Malaker
• promise must be “clear and definite”
• “This sort of language might suggest that
New Jersey Courts expect proof of most, if
not all, of the essential legal elements of a
promise before finding it to be ‘clear and
definite.’” p.211
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Judge v. Jury
“Affording plaintiff all favorable inferences,
its equitable claim raised a jury question . .
. . Plaintiff’s complaint, therefore, should
not have been summarily dismissed.”
p. 213, end of opinion
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Liability during negotiations
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Note 1
• Promise?
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Note 2
• Compare Hoffman and Pop’s Cones with
Drennan
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Note 3
• Sophistication of the parties and outcome
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Note 4
Damages
Expectation
Reliance
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Problem 3-1
• a discussion will be posted on-line
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Problem 3-1
• Theory of the case
• In a suit by the church against the city,
what is the main stumbling block going to
be?
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• Main problem for church—revocation by
city
• So in order for the church to win, you must
come up with a theory of the case that
prevents the revocation from having any
effect.
• How might it be the case?
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• K—bilateral already formed, in which case
city couldn’t revoke
• option K based on beginning of
performance under a unilateral K offer
• option K based on reliance
ALTERNATIVE—promissory estoppel
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UCC
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UCC 2-205
• An offer by a merchant to buy or sell goods in a
signed writing which by its terms gives
assurance that it will be held open is not
revocable, for lack of consideration, during the
time stated or if no time is stated for a
reasonable time, but in no event may such
period of irrevocability exceed three months; but
any such term of assurance on a form supplied
by the offeree must be separately signed by the
offeror.
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Elements?
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2-205 Elements
1. an offer to buy or sell goods;
2. by a merchant;
3. in a signed record; AND
4. which gives assurance that it will remain open
IS IRREVOCABLE (even though no consideration)
DURATION? Time stated or if none stated,
reasonable time; not to exceed 3 months
Extra requirement if form is supplied by offeree—
firm offer part must be signed separately by
offeror
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Problem 3-2
• Q--As of the time when she receives the
above letter, what if any rights does Gale
have against Branch? Advice re: course
of action? (skip for now the question of if
she lived in Ontario, Canada)
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• Her rights depend on whether an option
contract exists and whether she is able to
make a timely acceptance.
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Offer
1. lang. of
commitm
ent
2. rel. comp.
terms
3. communi
cated . . .
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The note signed by Wallace Branch
constitutes an offer. It has language of
commitment (I hereby grant to you . . an
option to purchase), is specific as to the
subject matter (horse "Tinman), contains
relatively complete terms including
price, and a limited warranty. It is likely
that a reasonable person in the position
of Dorothy Gale would believe that her
acceptance was invited and would
conclude the deal.
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Problem/issue identified
• In mid-September, Dorothy Gale receives
a fax from Wallace Branch stating that he
has decided to sell Tinman to another
buyer. Whether Gale has any rights
depends on whether or not this revocation
is effective. Even if it is effective, it is
possible that she might have a promissory
estoppel claim.
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Express option
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Option via reliance
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Firm offer under 2-205
1. an offer to buy or sell goods;
2. by a merchant;
3. in a signed writing; AND
4. which gives assurance that it will remain open
IS IRREVOCABLE (even though no consideration)
DURATION? Time stated or if none stated,
reasonable time; not to exceed 3 months
Extra requirement if form is supplied by offeree—
firm offer part must be signed separately
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• issue re: form supplied by Gale?
• issue re: duration?
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ADVICE
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End of class
Tuesday
Thursday
Friday
2/3/2006
270-89
221-40
240-54, incl. Problem 3-4
Class 12
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