Contracts
Professor Helen Scott
Fall 1998

Agency

If corporation - did the agent have authority?
Agent - a person who by mutual consent acts on behalf of and is subject to control of a principal
But agent has authority to act only within the scope of authority
3rd party can sue agent or principal
2 types of authority
1.	actual: the 3rd party/reasonable person can sue regardless of whether it knew that had actual authority (because agent has it)
2.	apparent: is viewed through the eyes of the 3rd party
Does this person have the authority to make an offer
					 to accept an offer
					 to make a promise
is a 2nd party reasonable in relying on this person’s promise or offer (Universal Computer)

Employment at Will Doctrine
no written K

Monge v. Beebe Rubber
Action of assumpsit to recover damages for an alleged breach of an oral K of employment
Mrs. Monge sues for being fired for sex. discrimination
Modification of employer at will doctrine
Adoption of a legal rule limiting employer’s right to fire
Held, termination by the employer of a K of employment at will which is motivated by bad faith or malice or based on retaliation is not the best interest of the economic system or the public good and constitutes a breach of the employment K.

Howard v. Dorr
Decedent was discharged for reasons of economic necessity.  P sued for wrongful discharge: Age and Sickness; P was denied recovery
New Test:  Court read Monge as applying to situations where an employee “performed an act that public policy would encourage, or refused to do that which public policy would condemn”
Age and Sickness don’t count - public policy reasons

Cloutier v. A&P
P sues for wrongful discharge after being fired (money stolen from the store after not delivering it to safe)
New 2-Part Test: P has to show that
1. 	firing was based on bad faith, malice and retaliation
manner of firing: rudeness, hypocrisy, arbitrariness
exemplary employee, long-term: many years of service, received promotions,
D canceled police protection, reinstated the next day after the robbery
2. 	public policy violation: fired for doing smth that public policy would encourage or refusing to do what public policy would condemn
P made rules that would avoid endangering workers, P was promoting OSHA, but even without OSHA, court would have found furtherance of public policy: he created safer work place

Classical K
3 elements needed for enforceable agreement
	Offer-Acceptance-Consideration

K - mutual agreement by two (or more) parties that that certain performances should be exchanged
Bilateral K: exchange of promises, in which each party promises some future performance in return for a promise of performance by the other party
promise for promise
Unilateral K: where one party made a promise in exchange for the rendering of some specified performance by the other; the second party might never make any promise, but the existence of K would still depend on voluntary action by both parties
promise for performance

Mutual Assent
Voluntary expression of commitment is a basis for legal obligation
Meeting of the minds is the basis for contractual liability

Objective theory of K
Ray v. Eurice Bros
Unilateral mistake doesn’t void K
P sued D for breach of written K to build a house
D says honest mistake - wants to get out of K
But Ds are experienced builders, repeat players, familiar with building Ks
Held,
•	signature binds
•	claimed unilateral mistake is immaterial - D still bound
•	claimed intent is immaterial, where there is reasonable manifestation of assent (conduct, external signals)
•	reasonable person standard of whether there is objective
manifestation of assent
(the test of interpretation is not what the party making it thought it meant or intended it to mean, but what a reasonable person in the position of the parties would have thought it meant)
Rule:
	absent fraud, duress or mutual mistake, one who has the capacity to understand a written document who reads and signs it, or, without reading it or having it read to him, signs it, is bound by his signature in law

But: if mutual mistake - there is no K: no meeting of the minds

Here: K was seriously negotiated

St. Landry Loan v. Avie
D/Skinner - illiterate, French-speaking, claims didn’t understand K he signed making him an endorser of a loan
D claims unilateral mistake
Held, D breached K
•	absent fraud, duress, mutual mistake - D is bound by K
•	burden is on Skinner to understand before signing
•	objective measure of assent
•	courts look into how parties behaved to find indication of understanding/assent
•	signature is important
Rule in both cases:
if you showed manifestation of assent - you’re bound

But here: no negotiations
	Disparity in bargaining power (Bank/Skinner)

Assumptions of bargaining power
•	adults are of ordinary intelligence (not lack of capacity - under 18, mental illness)
•	there is some rudimentary ability to understand K
•	parties are not in obligation to each other to disclose everything they know
•	does burden have to be on the bank to explain K to illiterates: but then banks
•	would be less likely to give loans to those people in the first place

Offer
Rest §24 Offer Defined
An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it
•	If offeree can just say “yes” - it’s an offer, no further manifestation of assent is necessary, all material terms are set out in the offer

§26 Preliminary Negotiations
Manifestation of willingness to enter into a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude the bargain until he has made a further manifestation of assent.

§27 Existence of K Where Written Memorial is Contemplated (Agreements To Agree)
Manifestations of assent that are in themselves sufficient to conclude a K will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances my show that the agreements are preliminary negotiations

§33 Certainty (Intention of the parties)
	(1) Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a K unless the terms of the K are reasonably certain
(2) Terms of K are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy
(material terms: parties, subject, price, place, quantity, time, medium of payment)
	(3) The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance

Acceptance
§50 Acceptance of Offer: by performance, by promise
(1) 	Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer (mirror image rule)
(2) 	Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise
(3) 	Acceptance by a promise requires that the offeree complete every act essential to the making of the promise

§58: Mirror Image Rule: acceptance must match the offer
§59: Counter-offer: if reply to an offer is conditional on the offeror’s assent to terms additional to or different from original offer
§60 Offeror is the master of the offer
§63 (a) Mailbox rule: acceptance is effective upon deposit in the mail
but (b) an acceptance under an option K is not operative until received by the offeror
§69 silence as acceptance (offeree is not required to attempt to communicate his acceptance to the offeror)
(b) 	if no reply by the offeree, silence and inaction operate as an acceptance
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
It is reasonable to accept unilateral K by doing the thing itself
But not in bilateral K

Termination
§36 Methods of Termination of the Power of Acceptance
(a) 	rejection or counter-offer by the offeree
(b) 	lapse of time
(c) 	revocation by the offeror
(d) 	death or incapacity of the offeror or offeree
(e) 	non-occurrence of any condition of acceptance under the terms of the offer
§38 Rejection
§39 Counter-offers
§40 Rejection or counter-offer by mail or telegram is not effective until received by the offeror
§43 If offeror takes action inconsistent with intention to enter into K and if offeree acquires reliable info about it - revocation (reliable info, even indirect)
§45 Option K Created by Part Performance or Tender
Option K is created when offeree tenders or begins performance (offeror cannot revoke)
§87 Option K
(1) offer is binding as an option k - irrevocable
(a) 	is in writing signed by offeror, recites a purported consideration, proposes an
exchange on fair terms within reasonable time; or
(b) 	is made irrevocable by statute
(2) an offer which 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

Offer and Acceptance: Bilateral Ks

Commitment to some course of action to be undertaken in the future

Rules:
•	offers can be made by any party (buyer, seller)
•	offers are fully revocable until they are accepted
distinguished from
•	Option - irrevocable offer, can’t be withdrawn during an option period
•	offeror is the master of the offer, he determines the terms, he can specify method of acceptance
•	when offeror doesn’t specify method, any reasonable conventional method in custom would suffice (reasonable, customary - geographic custom, transactions)
•	mirror-image rule: acceptance must match the offer
•	acceptance that doesn’t match the offer is a counter-offer, which rejects the original offer
•	counter-offer terminates original offer (offeree cannot revive original offer)
•	mailbox rule: acceptance is effective upon deposit (into medium of reasonable effectiveness)
•	if acceptance is lost in the mail - offeror is still bound, because he could have minimized that risk by determining acceptance method
•	letter has to be correctly addressed: if not, mailbox rule doesn’t work
•	revocation is effective upon receipt
•	any reliable info that offeree receives about revocation (even if indirect) - is effective (offer is revoked)
•	if revocation occurs before acceptance - offer is revoked

Lonergan v. Scolnick - what’s an offer?
P and D exchanged letters on sale of property, D sold property to 3rd party
Held, no K
there was no offer, only preliminary negotiations: form letter (+as ad in newspaper) is not an offer (invitation for an offer): sent to more than one person, but there is only one piece of land, D did not intend to sell land to many people - land is unique
There was no meeting of the minds - some further manifestation of assent was necessary
P could not have just said yes

Henthorn v. Fraser - how to accept/revoke?
Rules:
•	offeror is a master of his offer
offeror can decide what the terms of the offer are
•	mailbox rule: acceptance is effective when mailed (Rest §63)
•	revocation is only effective when received by offeree (Rest §43)

If acceptance is deposited in the mail before revocation is received - and acceptance gets lost - acceptance is still effective - offeror is still bound (bec. offeror is the master of the offer, he can set terms of acceptance, like “come to me”, he could have easily avoided the risk)

Nowadays - probably not just by mail - best and most efficient ways, reasonable by day’s standards

Normile v. Miller

P/buyer makes an offer of purchase of real estate to D/seller
P’s offer has Time is of the essence clause - time when offer must be accepted, if it’s not accepted by that date, it expires on its own terms
but it doesn’t limit offeror’s right to revoke
D makes a counter-offer - revokes P’s original offer with time is of the essence clause
•	without consideration - there is no option (irrevocable offer) here
•	offer effectively revoked before acceptance, D sells property to 3rd party - no K
•	mirror image rule: D’s acceptance did not match the offer - it’s a counter-offer, the P’s first offer terminated, counter-offer is revocation of and old offer
•	by modifying original offer you reject it and you can’t accept it later
D’s counter-offer was revoked - “you snooze, you loose”
•	revocation is effective when offeree receives reliable info that offeror has taken action inconsistent with intention to enter into K (Rest §43):
•	revocation is effective upon receipt: reliable info, even indirect (not communicated by D)

But: if P does not believe info, and is reasonable in not believing - there is no notice, revocation is not effective
standard: if reasonable person in good faith believed

Offer and Acceptance: Unilateral Ks
Sometimes it’s difficult to decide if it’s a bilateral or a unilateral K: look at what parties intended it to be
Bilateral - exchange of promises (of performance to take place in the future)
Unilateral - promise to do smth for an act
(offeror’s promise of a future performance in return for offeree’s actual rendering of performance)
Rules
•	Offeror is not bound until offeree performs an act - 
until performance is rendered, the offeror is not bound
no obligation until full performance
•	Performance is both acceptance and consideration
•	K is rendered only when act is performed
•	Classical K allows revocation before completion of performance (Brooklyn Bridge)
But
•	Rest §45 creates Option K: when there is partial performance - offeror cannot revoke
•	Courts prefer bilateral Ks, bec. in a unilateral K offeree is in a vulnerable position and incurs losses; unilateral Ks are not equal, one-sided (courts are trying to find an intent of the parties)
•	offeree must give notice to offeror of acceptance/performance within reasonable time ?

Bishop v. Eaton
D sent a letter to P telling him to pay D’s brother’s debt if necessary.  P performed, but initially failed to give reasonable notice to D that he performed.  P eventually wrote letter to D, but D says he never got P’s letter.
•	K was effective upon acceptance, which was performance
But
•	Notice is a condition subsequent: if notice is defective - no K
Offeree must give notice to offeror within reasonable time
Mailbox rule: notice (acceptance) is effective when posted

Petterson v. Pattberg	Revocation at any time before acceptance
D revokes the offer: D slams door before P gives him cash to pay for mortgage
Held, no K - very strict application of classical rule
Court: D effectively revoked the offer before performance was rendered by P:
performance - actual receipt of money by D
Dissent: D acted in bad faith (P was there ready to perform, but D refused to open the door); D cannot in bad faith refuse to receive performance and then say that there was no performance
Injustice that Rest §45 intends to remedy

Consideration
Rest §71
Which promises are enforceable - give rise to enforceable K
Mere promises are outside the scope of enforcement
Gift promises - no enforcement
Exchange doesn’t have to be equal, but there has to be some understanding that parties are obliged to do smth in exchange for smth
Test
•	benefit-detriment
•	bargained-for exchange
breach for failure of c’n

Hamer v. Sidway	benefit/detriment test
detriment to promisee is sufficient to qualify as c’n; benefit to promisor isn’t always necessary
Uncle promised nephew $5000 for refraining from drinking, smoking and gambling
Held, this is an enforceable K: nephew forbore from legal right to drink and gamble - detriment to promisee - consideration
	“A valuable consideration may consist either in some right, interest, profit or benefit accruing to the one party, or some forbearance, detriment, loss or responsibility given, suffered or undertaken by the other”

But: here, it’s an intrafamily dispute - difficult to resolve, very close to pure gift transaction; today would’ve been decided differently - gift, not enforceable

Baehr v. Penn-O-Tex - bargained-for exchange test
Scott: decided strangely: held that it was a gift transaction
Kemp indebted to P-O-T.  P-O-T takes possession of gas station that Kemp leased from Baehr and is now running Kemp’s business.  P-O-T promises but doesn’t pay rent to Baehr.  Baehr promised not to take legal action ag. P-O-T in exchange for D’s promise to pay rent, but
Held, no K
	forbearing from suit was not consideration, because it wasn’t explicitly bargained for (the only reason why P didn’t sue was his own convenience);
promise without consideration is gratuitous, it was voluntary assumption of obligation
(forbearance from suit can constitute c’n, but it didn’t here)

Batsakis v. Demotsis - court doesn’t inquire into value of consideration
Unilateral K - performance to lend money
P/Lender has fully performed (lent to D $25 for promise to repay him $2000)
D says - inadequate consideration
But held, K is enforceable
	where there is valid K, court doesn’t look into value, adequacy of c’n, fairness of transaction
“Mere inadequacy of consideration will not void a K”
	here there was c’n - there was bargain
(But: if gross inadequacy of c’n, D could argue duress, fraud, that P induced her to sign)

Plowman v. Indian Refining Co.	past performance is not c’n
					moral obligation is not c’n

Ps/retired employees sue D for breach of K on promised pension.
Held,
•	past performance is not consideration
employment relationship existing is not c’n, D already paid Ps for their past employment, this is employment at will case - D could terminate employees at any time
•	moral obligation is not consideration unless complimented by legal duty
desire to provide for future welfare of former employees is a moral obligation; there is not bargained-for exchange, it’s a gift promise - not enforceable, and D is a corporation (can’t give away money, it has shareholders)
•	coming to the office to pick up checks is not detriment - not consideration, but merely a condition of a gratuitous promise - gift; D didn’t say that if P doesn’t come to the office, he won’t get a check (D mailed checks to Ps who couldn’t come)
If D wanted Ps to come to the office so that present employees could see that the company cared - consideration: value to the company, but was company doing in consciously - hard to prove
If employees had to waive all rights of future employment in exchange for pension checks - c’n (doesn’t matter what the value is, courts don’t inquire into value of c’n)
If employees were required to train new employees - c’n: this is consulting K

	D asserts that VP/agent of the company lacked authority to make a K
Even if there was c’n, but no authority of agent - K is not enforceable

Obligation in the absence of exchange: Restitution and Promissory Estoppel
Equitable doctrines; NOT Ks, but quasi Ks
Consideration is present, but offer and acceptance are not

Restitution - UNJUST ENRICHMENT

PURE Restitution in the Absence of a Promise
Consideration and/or performance; no offer/acceptance

Restatement of Restitution §116 (life or limb - cases of danger to life or health)

A person who has supplied things or services to another, although acting without the other’s knowledge or consent, is entitled to restitution therefor from the other if
(a) 	he acted unofficiously and with intent to charge therefor, and
if professional - more likely intent to charge
•	a person should be such with whom you would bargain if you have had an opportunity to bargain - person is an expert, professional
•	also, opportunity cost theory: what would an expert be doing at the time when they are rendering services - they would be doing the same thing professionally for money, at their jobs, they make a living on that
(a) 	the things or services were necessary to prevent the other from suffering serious bodily harm or pain, and
(b) 	the person supplying them had no reason to know that the other would not consent to receiving them, if mentally competent, and
(c) 	it was impossible for the other to give consent or, because of extreme youth or mental impairment, the other’s consent would have been immaterial.

In re Estate of Crisan (emergency services)
Woman/party receiving the benefit is unconscious - unable to express her obligation
Estate has to pay.
Medical services: when it’s more likely than not that the party would have wanted the services performed and be willing to pay for them

Restatement of Restitution §117 (property - Preservation of Another’s Things or Credit)

(1) 	A person who, although acting without the other’s knowledge or consent, has preserved things belonging to another from damage or destruction, is entitled to restitution for services rendered or expenditures incurred therein, if
(a) 	he was in lawful possession or custody of the things or if he lawfully took possession thereof, and the services or expenses were not made necessary by his breach of duty to the other, and 
(b) 	it was reasonably necessary that the services should be rendered or the expenditures incurred before it was possible to communicate with the owner by reasonable means, and
(c) 	he had no reason to believe that the owner did not desire him so to act, and
(d) 	he intended to charge for such services or remain the things as his own if the identity of the owner were not discovered or if the owner should disclaim, and
if professional - more likely intent to charge
(e) 	the things have been accepted by the owner.

Glenn v. Savage 
P saved D’s lumber from being washed away.  Held, gratuitous voluntary acts of courtesy are not compensable - no Restitution.
In order to be liable, D’ should have requested the service or promised to pay - not sure that D wanted the lumber saved and was willing to pay for it.

Restitution under Watts v. Watts: UNJUST ENRICHMENT

3 elements:
1. 	a benefit conferred on the defendant by the plaintiff,
2. 	appreciation or knowledge by the defendant of the benefit, and
3. 	acceptance or retention of the benefit by the defendant under circumstances making it inequitable for the defendant to retain the benefit

Argument against it: services to family members are gratuitous
But P contributed both property and services to this (non-marital) relationship, but she was never compensated for her contributions

Promissory Restitution
Recipient of services does make an express promise to pay for them, but only after the benefits are received.

Restatement (Second) of Contracts §86, Promise for Benefit Received

(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 Subsection (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.

Mills v. Wyman - decided under Classical K
past services is not consideration
		moral obligation is not enforceable
25 year old son, away from family, got sick - compensation for the board, nursing, father promised to pay for services rendered, but then refused - no Restitution, D not liable
(if son were 16, the father would be liable)

Exceptions:
A promise to pay debt can be binding, even if barred by statute of limitations, because it is based on a preexisting legal obligation, also debts of infants, bankruptcy debts ?

Webb v. McGowin - Has to be promise + material benefit to the promisor
Webb saved McGowin’s life, but was permanently injured himself, McGowin promised to pay Webb for the rest of Webb’s life, and paid for 8 years until he died, payments were discontinued, suit against the executor.  Held, D should pay, K enforced.
	Case decided under K; but basis for Promissory Restitution
Life has material and pecuniary value - material value of c’n is sufficient to support a promise; material benefit to the promisor (benefit/detriment test)
Ratification theory: express promise plus payments indicates intent (if promise was made before services ere rendered, it would have been enforceable)
•	McGowin would have asked for the services, would have voluntary assented to the services rendered
•	promise to pay serves to act as evidence that those services would have been accepted and that person (Webb) was appropriate person to render those services
•	how severely Webb was injured is an indication of how severe McGowin’s injuries would have been if Webb didn’t save him

•	express promise
•	serious risk to life
•	payments were made

3 differences between promise in Webb and in Mills
1.	in Webb, benefit to the promisor, not to the 3rd party: enhances reliability of the promise
2.	time elapsed
	if in the heat of the moment - not much weight
	if some time elapsed (in Webb, promise was made in 1 month after the accident) - shows intent, that person really meant the promise
3.  in Webb, voluntary assumption of obligation - payments were made for 8 years

Promissory Estoppel - DETRIMENTAL RELIANCE
Foreseeable, substantial, detrimental reliance by the promisee

Restatement (Second) of Contracts §90, Promise Reasonably Inducing Action or Forbearance

(1) 	A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or the third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.  The remedy granted for breach may be limited as justice requires.
(2) 	A charitable subscription or a marriage settlement is binding under Subsection (1) without proof that that promise induced action or forbearance.

4 elements of Promissory Estoppel:

(1) 	a promise
(2) 	the promisor should reasonably expect the promisee to rely on that promise
(3) 	a detrimental reliance of the promisee on that promise
reliance: change of position in reliance on the promise, or omission of change of position in reliance on the promise (action, forbearance)
(4)  injustice can only be avoided by enforcing that promise

Kirksey v. Kirksey - Promises within the family - no Promissory Estoppel
P/woman sold everything and moved to her brother in law/D who later kicked her out, D not liable.  D’s promise was like a gift - not enforceable promise

Allegheny College v. National Chautauqua County Bank (charitable subscriptions, judge Cardozo)
woman promised $5000 after death, paid $1000, revoked her promise - K breached
Decided as bilateral K, but basis for Promissory Estoppel
By receiving $1000, college undertook to forbear - maintain memorial in her name
If we want charities to function - make promises/charitable subscriptions enforceable

Katz v. Danny Dare, Inc. (promise of a pension to Katz; his detrimental reliance on that promise; injustice can only be avoided by enforcing that promise).
Although D could have fire Katz (employment at will), the fact that Katz retired and gave up extra income in reliance for pension constituted adequate detrimental reliance to enforce
injustice: Katz can’t work 40 hours per week anymore
+family relationship in a corporate setting

Universal Computer Systems v. Medical Services - has to be substantial reasonable reliance
Reliance has to be REASONABLE: is it reasonable for P to rely on agent’s promise
Question of AGENCY (agent had apparent authority to make promises)
agent promised to pick up bid in violation of federal regulations, didn’t act on that promise, caused to loose opportunity for bid
	promise
	intended to induce reliance
	did induce detrimental reliance (P could have made other arrangements)
	was reliance reasonable? - yes, agent had apparent authority

Obligation in the absence of complete agreement
Limiting the offeror’s power to revoke

Under classical contract, offeror is the master of the offer
Acceptance should match the offer
Offeror can revoke anytime before offer is accepted
Unilateral mistake - still bound by the terms of K
Unless it’s an Option contract

Option contracts under Rest. §87:
an offer is binding as an option contract if
§87(1)
•	it’s in writing, signed by the offeror
•	recites consideration
•	proposes an exchange on fair terms within a reasonable time; or
•	is made irrevocable by statute

§87(2) - Promissory Estoppel - endorses Drennan analysis
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.
•	offer intended to induce reliance
•	no acceptance
•	detrimental reliance

Construction business
Baird v. Gimbel Bros. - solid contract application
Court finds
No bilateral K
	before acceptance was made offer was revoked
No unilateral K
	use of bid was not acceptance
No option K
	parties didn’t intend it to be an option K
J. Hand rejects the use of Promissory Estoppel - assymetrical nature, not mutual, but “one-sided” obligation (promisor is bound, promisee is not bound) - bad thing in a commercial setting, where there are multiple commercial transactions
it’s not what the parties intended

Drennan v. Star Paving - Promissory Estoppel under Rest. §90
J. Traynor finds an implied subsidiary promise
Bid itself is a promise subject to conditions
Analogy to Rest. §45 - Unilateral Contract:
offer is irrevocable when a performance has partly commenced (until it is finished)
Here too, there is an implied subsidiary promise to hold the offer open (to give
general contractor time to accept)
Rest §90 principles:
•	subcontractor is bound to bid when contractor used the bid (and named the subcontractor)
•	bid - promise (subject to condition of winning general contract)
•	intended to induce reliance (action or forbearance)
•	did in fact induce detrimental reliance
•	injustice resulted (general contractor is now bound by his bid)

Mistake of subcontractor/D - in a classical contract, if there is unilateral mistake, you’re still bound (Ray v. Eurice Bros)

4 exceptions to the use of Promissory Estoppel in Drennan
1.	if gen. contractor doesn’t quickly award sub-contractor after gen. c’tor was awarded the bid
2.	if sub. made a mistake and general know or should have known about this mistake
3.	if sub. puts it in the bid that the bid is revocable before acceptance
4.	if sub. made mere estimates (just to give general an idea to use in making its bid)

Policy considerations:
Baird protects:
•	mutuality of obligation (parties are equally bound, commercial setting)
•	fairness to subcontractor
•	certainty (nothing is certain until contract is awarded)

Drennan protects:
•	general contractor’s interests
•	interests of the ultimate client (to preserve the lowest price to the client)

Irrevocability by Statute: The Firm Offer
UCC Article II - applies only to sale of goods
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 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.

	Offeror is a merchant (person dealing professionally in the kinds of goods in question)
		has she done sail before, sell goods annually - merchant, of only once - doubtfully
	offer to buy or sell goods (in Drennan, paving - mixed goods and services - n/a)
	offer is in signed writing
	gives explicit assurance that the offer will be held open
	no consideration
	if time is not stated - reasonable time
	whether or not time is stated - no longer than 3 months
	if on offeree’s form, firm offer clause should be separately signed by offeror

UCC is not clear whether 3 months start when offer is made or received

UCC §1-103 common law supplements UCC
Combined with Prom. Estoppel: Prom. Est. can hold offer open for longer than 3 months if there is reasonable detrimental reliance
No detrimental reliance is required during the 3 month period of firm offer

UCC §2-104 Merchant - person who deals in goods or by his occupation holds himself out as having knowledge or skill
UCC §2-105 Goods - things that are movable (including unborn young of animals and growing crops), except for money, securities and things in action/services
UCC

Remedy: benefit of the bargain/expectation damages ?

NY statute 
•	accepts language of UCC §2-205 and extends firm offer to offers not involving either merchants and goods
•	permits offers to extend in duration past 3 months
•	such firm offer is required to explicitly state that it is irrevocable or will be held open for a stated time
(if merchant - UCC applies, of not a merchant - NY statute applies)

Mid-South Packers v. Shoney’s - after 3 months, even firm offer is revocable
D/Shoney’s attempts to bind P to 45-day agreement for notice of price adjustment.  D says it’s a requirements K.  Held, no requirements K because no exclusivity - no c’n (Shoney’s could have bought ham and bacon from any supplier, no commitment to buy exclusively from P); initial offer from P was at most a firm offer, whose terms expired, and each sale was a new, independent K.
How easy is it for buyer to find an alternative source of supply?
•	fungible type of goods
•	series of repeat transactions
•	reliance is much less than in construction K or individual transaction

D’s secret intent not to buy cannot bind P, bec. D made clear manifestation of assent to pay.
	+No Promissory Estoppel for Shoney’s - no detrimental reliance, the good is fungible, substitutable (not in like in Drennan)

Court finds: a series of unilateral Ks, each K is viewed independently (Mid-South: offer, Shoney’s accepted each time it mailed purchase orders)

Qualified acceptance: Battle of the Forms
Whose forms govern

Poel v. Brunswick - Last Shot Rule (classical K)
•	mirror-image rule: instead of accepting P’s proposal, D sent its own form which did not mirror the offer (added new language) - it’s a counter-offer
•	this counter-offer was not accepted - no K
•	each form with slightly different terms is a counter-offer; so the last form sent is the offer which sets terms of the K, which has to be accepted unless and until it is revoked
Last Shot Rule usually favors the seller: buyer sends a purchase order form (offer), seller then sends acknowledgment of order form (counter-offer) which binds buyer.  Whoever sends the last form wins, even if the other has never read the boilerplate.

UCC - against mirror-image rule and last shot rule

UCC §2-207 Additional Terms in Acceptance or Confirmation - first shot rule

(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 K.  Between merchants such terms become part of the K unless:
(a) 	the offer expressly limits acceptance to the terms of the offer;
(b) 	they materially alter it; or
Comment 4: Surprise (is it common practice to put such boilerplate it, did the other party know or should it have known it) or 
Hardship - substantial economic hardship (Dale Horning v. Falconer)
(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 K is sufficient to establish a K for sale although the writings of the parties do not otherwise establish a K.  In such case the terms of the particular K 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.

•	Whether K was formed at all
•	Assuming it was formed - what are its terms

2-207(1) Is there K?
1. 	Where is the offer? (common law principles apply)
•	Usually buyer’s purchase order form is the offer, seller’s acknowledgment of order form is the acceptance
•	Price quotes usually considered requests for offers

2. 	What is the next communication?
•	acceptance with additional terms, or
•	acceptance with different/conflicting terms, or
•	counter-offer

1) 	if it doesn’t expressly condition assent on additional terms, it’s an acceptance (mitigates mirror-image rule)
2) 	if it doesn’t expressly condition assent on different terms, it’s an acceptance
i. 	different terms could be viewed as proposal for additional terms
ii. 	the terms in the acceptance could fall out (because neither 2-207(2) nor 2-207(3) apply - first shot rule
iii. 	conflicting terms may cancel each other out (Comment 6) - what terms are in agreement + UCC gap-fillers (2-207(3))
3) 	if it expressly conditions assent on new terms, it’s counter-offer (start analysis over)

2-207(2) Once you’ve found offer and acceptance (K), what are the terms of K?
1) additional terms in acceptance are part of K (under common law - not)
2) 	if both parties are merchants, additional terms become part of K unless
a) offer expressly limits acceptance to conditions of offer
b) they materially alter K: surprise or hardship
	Comment 4: surprise or hardship test + Comment 5
Surprise (is it common practice to put such boilerplate in, did the other party know or should it have known it) or 
Hardship - substantial economic hardship (Dale Horning v. Falconer)
Indemnification clause - limitation of remedy: shifts all risk from manufacturer to buyer
c) 	notification of objection is given within reasonable time after notice received
		terms must be known/notice given in order for them to apply

3)if acceptance contains material alteration, then the offeror must expressly assent to terms, or they are not part of K - fist shot rule

2-207(3)
If there is no K, because second communication was an unaccepted counter-offer, but there has been performance, then most courts would apply 2-207(3) to create a K from what the parties agreed to + UCC gap-fillers.
•	court can reject all of the “expressly conditional” clauses as mere boiler-plate (look for acceptance without considering expressly conditional - materiality would be deciding factor)
knock out rule: terms that don’t match - out
•	court can distinguish between degrees of boiler-plate and/or find the offer where it wants to (again, materiality would be deciding factor)
•	court can find performance to be acceptance of last offer (reinstates last shot rule: unlikely)
•	court can find no K - no breach - no remedy
•	court can adopt Shoney’s type reasoning and only enforce K as far as it has been performed, but not infer a complete forward looking K

When 2-207 (3) might apply
•	no forms (only invoice or letters)
•	only one form with no response (if offeree did not see any of the conditions, court may not assume that he accepted those conditions, especially if he is not the performer)
•	unaccepted counter-offers (acceptances expressly conditional) with conflicting terms
•	all forms are expressly conditional
•	confirmations with conflicting terms

2-207 Strategy:
•	analyze each document
•	offer/counter-offer/acceptance expressly conditional
•	non-conditional acceptance with additional terms
•	non-conditional acceptance with different terms
•	legal nothing
•	non-conditional acceptance
•	choose what’s the last offer - explain why it’s an offer
•	what is the next document

Brown Machine v. Hercules - material changes must be expressly assented to be in K
silence or lack of protest is not enough
Indemnification clause is not part of K, because it’s a material alteration: shifts all risk from manufacturer to buyer

Dale Horning v. Falconer Glass - hardship without surprise can constitute material alteration of K
Hardship - substantial economic hardship (2-207(b), Comment 4)
limitation of remedy: loss of consequential damages, shifting losses from manufacturer to buyer
Court: burden is on Falconer to make sure that Dale knows about indemnification clause and assents to it

Postponed Bargaining: Agreements to Agree

Walker v. Keith - agreement to agree without mechanism for agreement is no K
Real estate lease with option to renew:
but rent item is left open and no formula given as to how compute it (“comparative business conditions” idea is too vague)
Held, agreement is void for vagueness: renewal clause is too vague and indefinite
Agreement to agree is not binding K
Parties could have agreed on rent or on formula as to how to compute it, but didn’t, it’s not the job of courts to fix rent for the parties (if parties supplied the formula, even this court would enforce it)
UCC doesn’t apply to real estate - only to sale of goods

but the less sophisticated parties are, the less likely it’s that they know what certainty is
UCC changed it
UCC §2-305 Open Price Term (intent of the parties)
If there is intent to be bound, open price term is not fatal to K
(1) 	The parties if they so intend can conclude a K for sale even though the price is not settled
(then the price is a reasonable price at the time for delivery)
(4)  Where, however, the parties intend not to be bound unless the price be fixed or agreed and it is not fixed or agreed there is no K (open price term can be evidence that parties didn’t intend to be bound, unless they agreed on it)

Rest §27 Existence of K Where Written Memorial is Contemplated
Manifestations of assent that are in themselves sufficient to conclude a K will not be prevented from so operating by the fact that the parties also manifest an intention to prepare and adopt a written memorial thereof; but the circumstances may show that the agreements are preliminary negotiations

Rest §33 Certainty
(1)  Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a K unless the terms of the K are reasonably certain.
(2) 	The terms of K are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy.
(3)  The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance.

UCC §2-204 Formation in General
(3) Even though one or more terms are left open a K for sale does not fail for indefiniteness if the parties have intended to make a K and there is a reasonably certain basis for giving an appropriate remedy.
•	parties intended to make a K
•	there is a reasonably certain basis for giving an appropriate remedy

Pennsylvania v. Wilmington Trust - letter of intent can be binding K
Open terms are not necessarily fatal to an agreement-
Dispute as to whether parties intended to be bound (no sum. j’nt to either P or D)

•	under common law - the test is material terms, intent is irrelevant, what parties think doesn’t matter
•	under UCC - test is intention, if there is intention, there is K

Rest §27 Comment C  Where to find indication of intention (whether K has been concluded)
•	the extent to which express agreement has been reached on all the terms to be included
•	whether the K is of a type usually put in writing
•	whether it needs a formal writing for its full expression
•	whether it has few or many details
•	whether the amount is large or small
•	whether it is a common or unusual K
•	whether a standard form of K is widely used in similar transactions
•	whether either party takes any action in preparation for performance during the negotiations
(shown by oral testimony, correspondence, other preliminary or partially complete writings)

Letter of Intent
an agreement to negotiate terms not yet agreed upon, basic terms decided
Ideal state of affairs for client (buyer): bind the other party (seller) as much as possible without being bound to your own manifestation of intent; so that the other party is sufficiently bound (you don’t want the other party to come in and offer a higher bid)
Why would the other party want to get out of agreement
•	fiduciary reasons (Pennsylvania v. Wilmington Trust)
•	maybe price changes (wants to renegotiate a price)
•	maybe smth happens (material negative event happens to the company)
Write letter of intent to discover problems of the other company (due diligence: liability, environmental liability)
	The practice is not to use letters of intent, or if make them - make them very detailed, so that there is intent - parties are bound; but very risky if your client wants to be able to walk away- such letter of intent may be considered binding K
	Today letters of intent are likely to be enforceable
if indefinite enough - client can avoid being bound
once it gets sufficiently detailed economically - risk that client will be bound increases

Statute of Frauds
Rest §110, 131-139; UCC §2-201
Designed to prevent fraud
•	but prevents legitimate claims from enforcement
•	unsophisticated parties who don’t have bargaining power to force a signed writing
•	serves evidentiary and cautionary functions, procedural inquiry for courts
Compliance with S/F doesn’t mean it’s enforceable
But non-compliance can make K unenforceable
	S/F is a defense: so what that you say there is a K, if no signed writing - no K

Rest §110 Classes of Ks covered
(1) no enforcement to K unless there is a written memorandum or an applicable exception
(a) 	K of an executor or administrator to answer for a duty of his decedent
(b) 	K to answer for the duty of another
(c) 	K made upon consideration of marriage
(d) 	K for sale of an interest in land
(e) 	K that is not to be performed within one year from the making thereof
(2) 	UCC S/F governs the following types of K
(a) 	K for the sale of goods for the price of $500 or more (UCC §2-201)
(b) 	K for the sale of securities
(c) 	K for the sale of personal property not otherwise covered, to the extent of enforcement by way of action or defense beyond $5,000 in amount or value in remedy

UCC §2-201 applies to Sale of Goods only
K for the sale of goods for the price of $500 or more
Requirements §2-201(1) + Comment 1
•	evidence of K for sale of goods
	All that is required is that the writing afford a basis for believing that the offered oral evidence rests on a real transaction.  It may be written in lead pencil on a scratch pad.  It need not indicate which party is the buyer and which the seller.  The only term which must appear is the quantity term which need not be accurately stated by recover is limited to the amount stated.  The price, time, and place of payment or delivery, the general quantity of the goods, or any particular warranties may all be omitted.
•	signed/authentification by party against whom enforcement is sought
•	quantity term has to be in that writing (K is not enforceable beyond the quantity of goods shown in writing)
Exceptions - UCC §2-201(3) K is enforceable if
(a) 	specially manufactured goods
not fungible commodities, goods cannot be resold to others, fairness to seller, who made commitments, started manufacturing
(b) 	if the party against whom enforcement is sought admits that a K was made, but the K is not enforceable beyond the quantity of goods admitted (admissions provision)
(c) 	with respect to goods for which payment has been made and accepted or WHICH [goods] have been received and accepted (partial performance)
Comment 2
Partial performance as a substitute for the required memorandum can validate the K only for the goods which have been accepted or for which payment has been made and accepted

Always check local St/F

3 questions
1.	Does S/F apply?
is K of type that must be in writing in order to be enforceable
•	real estate
•	sales of goods for more than $500
•	guarantees
•	K that can’t be performed within 1 year
1.	If yes (K falls within S/F), are there writings, at least one signed by D, that specify terms of K?
•	Rest §132	memorandum may consist of several writings if one is signed and the others clearly relate to the same transaction
•	Rest §133	S/F may be satisfied by signed writing not made as a memorandum of a K
•	Rest §134	signature merely needs to be made with the intention to authenticate the writing
•	Rest §136	memo may be made at any time before or after K formed
•	Writing need only be signed by party against whom K is enforced
2.	If no, are there any exceptions why S/F might not apply?
•	Partial Performance in land transactions (real estate only) - only if P is seeking equitable relief: non-monetary damages (injunction or specific performance) (Winternitz, Rest §129)
•	equitable relief: injunction (D must do smth or refrain from doing smth) or specific performance (land is unique)
•	equitable relief is only available when money damages are not available (courts prefer money damages)
•	Promissory Estoppel - reliance (McIntosh v. Murphy, Rest §139)
	not limited to land Ks - can by any K
	remedy is limited as justice requires: P gets reliance remedy - injustice he suffered
			Rest §139
(1) 	A promise which the promisor should reasonably expect to induct action or forbearance on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding S/F if injustice can be avoided only by enforcement of the promise.  The remedy granted for breach is to be limited as justice requires.
(2) 	how to determine whether injustice can be avoided only by enforcement of the promise:
(a) 	the availability and adequacy of other remedies, particularly cancellation and resitution
if no other remedy is adequate - Promissory Estoppel
(b) 	the definite and substantial character of the action or forbearance in relation to the remedy sought
(c) 	the extent to which 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) 	the reasonableness of action or forbearance
(e) 	the extent to which the action or forbearance was foreseeable by the promisor

Crabtree v. Elizabeth Arden - several writings can be read together as long as they relate to the same transaction Rest §132
D tries to get out of 20year employment K by S/F defense.  K breached.
S/F applies - more than one year to complete performance
to satisfy, several writings are read together (duration is not contained in the writings that are signed)
no exceptions
	authorized agent can sign for the principal

Winternitz v. Summit Hills - partial performance exception only if P is seeking non-monetary damages
Lease with option to renew for add’l 8 years if improvements are made, P begins to pay rent, P then wants to sell business, D appears to approve assignees, but D refuses to sign new lease - malicious intent, P incurs big loss.
Court finds that
	oral K is not enforceable (no signed writing here)
	part performance is not available here, because P is seeking money, not equitable relief
Tort claim: malicious interference with P’s K - the only reason why court found for P
(testimony of broker that D spoke maliciously)

McIntosh v. Murphy - Promissory Estoppel exception to S/F
P moves to Hawaii for job, gets fired - Injustice
S/F applies - one year to complete performance (trial court stretches to find <365: S/F doesn’t apply) 
not written K asserting term, oral K
Court finds Promissory Estoppel exception to S/F

Cohn v. Fisher UCC §2-201: sale of goods
Sale of boat breaks down after deposit made by D.  K enforced.
Inspection is not a condition
	no objective manifestation of assent (D never told P that inspection was a condition)
	not a usage of trade? - but troubling what court does - UCC §1-205(3) usage of trade justifies it
UCC §2-201 applies: sale of good for more than $500
Enforceable K - S/F is satisfied
1.	check is a sufficient signed writing
•	signed writing, price, quantity expressed
•	if no price - check would still qualify; price can be proved outside writing; Open Price term UCC §2-305
Quantity - sole material term for the purpose of S/F under UCC
1.	admission of D that there was an oral K
S/F was not designed to protect a party who made an oral K, but rather to aid a party who did not make a K, though one is claimed to have been made orally with him
2.	part performance - payment was made and accepted UCC §2-201(3)
•	D paid deposit: boat is a good for which payment was made and accepted
here - one single boat
•	If there was not check - still part performance if boat was received and accepted
•	Either payment satisfies, or receipt of goods - evidence of K

UCC §2-201 doesn’t have a quantity limitation?

Interpretation
Enforceable obligation has been formed; dispute as to meaning of K

3 theories of interpretation
1.	subjective theory: intent (where mutual mistake (parties meant different things - no meeting of the minds - no K) - free will, autonomy, free choice, but uncertainty
2.	objective theory: words and conduct - reasonable objective interpretation, standard of reasonable person (has nothing to do with what parties meant) - fairness and efficacy, but can lead to absurd results when court will enforce reas obj meaning, which neither party intended
3.	modified objective view - Rest 201 Whose Meaning Prevails
•	reasonable objective meaning prevails, but when parties agree on meaning - it governs
•	rules favor the innocent party (when party 1 knows party 2’s meaning, but 2 doesn’t know 1’s meaning - 2 is the innocent party, party one may be charged with that meaning)
•	intention of the parties is primary - what party knows about the other’s intentions

P bears the burden of proof - to show by preponderance of evidence that his meaning is correct

Common law maxim: ambiguity is resolved against the drafter - but this is the rule for adhesion Ks (disparity in bargaining power)
But court may say: what each party knew about the other’s intention - figure out who the innocent party is (when equal bargaining power)

Maxims of interpretation
•	words of the feather: court will look at words as if they are all together, in same context (if one word is different, they will interpret it the same)
•	if specific items are listed, without any more general terms, other items although similar in kind are excluded: if K says some things and doesn’t say others - the court will exclude those others
•	ambiguities are resolved against the drafter - used against drafters such as banks, insurance companies
•	plain meaning rule: court will use plain meaning of the word, may use dictionary
•	court will read specifics as the general term (a general term joined with specific one will be deemed to include only things that are like the specific one)
•	interpretation that makes K valid is preferred to one that makes it invalid: courts look to validate Ks (people do not tend to enter into unenforceable obligations)
•	interpret K as a whole: writings that form part of the same transaction should be interpreted together as a whole (can be many parts, or different Ks in the same transaction; court will read these Ks together, when term is used in a consistent way - court will read it consistently)

Frigaliment
•	P loses because it didn’t sustain its burden of proof that its meaning should prevail, P failed to show by preponderance of evidence (more than 50%) that its interpretation should prevail
•	There was K: there was performance - fowl was accepted by the buyer - because there was acceptance - likely that there was K
•	Types of evidence the court uses
4.	language of K (can be words of the feather maxim - reading in context, but court rejects here: diff words mean diff things)
	2.  preliminary negotiations between parties
	3.  trade usage
•	under common law, if you just enter into industry - you wouldn’t be held to usage of trade
•	but under UCC, if you want to enter into industry, it’s your obligation to learn customs and usage of trade
4.  performance
•	D says: P accepted birds
•	but Rest 202 (4): if P accepted birds and not complained - acceptance, but here P objected - no acceptance
	5.  regulatory standards
•	D says: gov’nt inspection criteria confirms my meaning; court likes it
•	but in Universal Computer court rejected it - will vary from case to case
	6.  reasonable construction (court resorts to maxim of interpretation)
•	court says: it’s reasonable to assume that D expected to get some profit

Morin v. Baystone	Satisfaction
P/building subcontractor, D/general contractor, work subject to final approval of GM: GM reserves exclusive right to decide whether work is acceptable; GM rejects P’s work
2 standards:
1. 	Objective: reasonable person standard is employed when K involves commercial quality, operative fitness, or mechanical utility which other knowledgeable persons can judge (standard widget/commodities K)
2. 	Subjective: standard of good faith is employed when K involves personal aesthetics or fancy (painting a portrait - buyer can reject for any reason, as long as in good faith)

Where does factory fall?
Court: objective standard
•	Rest 228 Satisfaction of the Obligor as a Condition
		When it is a condition of an obligor’s duty that he be satisfied with respect to the obligee’s performance or with respect to smth else, and it is practicable to determine whether a reas person in the position of the obligor would be satisfied, an interpretation is preferred under which the condition occurs if such a reas person in the position of the obligor would be satisfied.
•	commercial Ks are generally subject to objective standard, as opposed to aesthetics Ks
•	objective standard: requirement of reasonableness is a reliable indication of parties’ intent (had parties thought of it, they’d bargained for it: P would never subject itself to subjective whim of GM’s architect; GM also did not mean aesthetics K)
•	application of reasonableness standard was practicable

Adhesion K	insurance companies, banks
	a standard-form K prepared by one party to be signed by the party in a weaker position, usually consumer, who has little choice about the terms
1.	standard form (with boilerplate/fine print)
2.	great inequality of bargaining power
3.	take it or leave it approach, absence of choice, no ability to bargain
•	Not all standard form Ks are Adhesion Ks (can be by parties with equal bargaining power)
•	When Adhesion K - ambiguity is resolved against the drafter

C&J Fertilizer		Doctrine of Reasonable Expectations
P/owner of fertilizer plant, D/Insurance Co, D denied coverage because burglar left no marks on the outside, only inside.

Doctrine of Reasonable Expectations
	Customers are not bound to unknown terms which are beyond the range of reasonable expectations
1.	applies only to Adhesion Ks
2.	only where forms frustrate reasonable expectations of the parties
Factors
•	term is bizarre or oppressive
•	it eviscerates dominant (non-standard) term
•	court finds here: it eliminated dominant purpose of transaction (to cover burglaries by outside parties)

Damages
K, Firm Offer, Option K
•	benefit of the bargain/expectation damages (to compensate for loss): what P would have gotten if D performed
•	specific performance

Restitution/Promissory Restitution/Unjust Enrichment
•	value of the benefit conferred/value of services rendered: measure of damage - extent to which the other party was unjustly enriched, compensation in the amount that offeror benefited 

Promissory Estoppel/Reliance
•	out of pocket damages/reliance damages - what you spent in reliance on the other party’s words or action; to put P in a position he would have been if he hadn’t relied on D’s promise
•	also might be possible to get expectation damages (Universal Computer: loss profits, what P would have gotten if bed was delivered and K was performed)
•	remote possibility of getting specific performance