Download - Contracts Notes for Hannah

8/10/2019 Contracts Notes for Hannah

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CITATION: International Filter Co v Conroe Gin, Ice & Light CoCommission of Appeals of Texas, 1925.

277 S.W. 631

PARTIES:Plaintiff: International Filter Co

Defendant: Conroe Gin, Ice & Light Co

CAUSE OF ACTION:breach of contract

DEFENSE(s): No contract was made b/c (1) OK did not amount to approval or acceptance (2)

notification of such approval, or acceptance, by IF was required to be communicated to ConroeGin (D)

PROCEDURAL HISTORY:

FACTS: The proposal document stated that it becomes a contract when accepted by thepurchaser and approved by an executive officer.

Defendant wrote accepted Feb. 10, 1920 and the notation make shipment for Mar. 10 and

sent the proposal back to plaintiff.

Plaintiff President wrote O.K. and the date and. his name on the document.

ISSUE(s):Whether the endorsement O.K. written on the paper by the President of the company was an

approval by an executive officer as described in the proposal.

Whether Plaintiff was required to give notice to Defendant of the approval of the executive

officer in order to form the contract as contemplated.

RULES OF LAW: Form of the offer may require some final approval; however, it does notrequire notice to the other party of that approval unless the form expressly dictates that

requirement. Court will construe meaning from the obvious meaning.

HOLDING:The OK was an approval by the executive and that the paper then became a

contract.

The Court did not think it was essential that the approval by the executive be communicated tothe defendant. The form of the offer did not show this was a requirement and to require it would

be to change the obvious meaning of the language and change the locus and time prescribed for

meeting of the minds contained in the offer. In any event, the subsequent confirmation letter

would have sufficed as notice of the approval even though it was not expressly required.

REASONING:The offeror has the power to express the terms and determine the acts which will

constitute acceptance. Courts will construe those terms according to their plain meaning. Here,


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the terms required executive approval but did not require the offered to give notice of the

acceptance.

DISPOSITION:

COMMENTS:

2/10 - proposal from IF "for prompt acc"

2/10 - Con "accepted" - make shipment by Mar 10


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What happens if the Offeror is silent about what shows acceptance

Default rules kick ino

Default rule - rule that will govern unless you provide otherwise

Law of contracts is full of default rules

Ways offeror empowers offeree to accept:

By completing performance that is sought

Bilateral Contract - If you agree to mow my yard - execution

2 legal duties exist:

1.

Pay him $50

2. Mow your yard

Unilateral Contract - If you find my cat - performance

1. Pay him (he has already found the cat)

Bi v Uni - how many duties remain at the time the contract is created.

Don't confuse acceptance by performance and unilateral contract - they can accept by performance but

it is still dependent on 2 duties remaining (ex. Pick up key if you accept - picked up key, but still needed

to be paid and mow yard - 2 duties)

True unilateral contracts are really rare - people usu. want assurance and once they have that they

become bound and it is a bilateral contract

The offeror is the master of the offer - so the offeror gets to decide what the offeree has to do in orderto get the contract:

1.

Was he explicit in what he wanted him to do

a.

Can ask that offer be accepted by a promise - Bilateral

i.

Mow yard on Wed - pay you $50

ii. Refer back to when contract came into existence

iii. Two legal duties remaining - duty to pay & perform

b. Can ask that offer be accepted by performance - Unilateral

i. Isn't going to be obliged to anyone until the cat is returned

ii. Not bound until the cat is returned

iii. One legal duty remaining - duty to pay

Hypo:

Ill pay you $30 to mow my yard on Thursday - if you want to accept come over and get the key There is still obligation on each other's parts - pay and perform This is bilateral!!!

Many times will people will say bilateral - promise and unilateral - performance but that is not true!


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Unilateral - absolute completion of performance

Hypo - never finsihed

Leave a note on kids bike

If you mow my yard tomorrow I will pay you $20

He calls you back and says yes---> is this where the acceptance comes in?

Wed morning you call him back and say forget it.

Was the person bound at the call back? Was it a valid acceptance?

This is ambiguous - how should the offeree accept?

Rsst 30 - anything that seems like a reasonable offer will suffice

RSST 32 - accept either by promising to perform -or- performance, as the offeree chooses

Default rule - in case of ambiguity - the offeree gets to choose promise or performance - any reasonable

means of acceptance will suffice - any beginning of the performance will constitute as acceptance

Leave a note:If you mow my yard I will pay you $30, let me know by noon the following day

Kid just comes over and starts mowing before noon the next day

Are you bound to the kid? Yes, default rule kicks in because it isn't very clear

Kid comes over and starts mowing - mows three strips & then stops.

Old man goes out and starts waving his cane and said he is contractually bound - is he right?

Is the kid contractually bound to mow the yard? Where is the wondertwins moment - when he starts mowing or when he stops mowing? Kid is contractually bound 62

Because people don't speak in technical language - we have to have default rules when there is noclarity

Unless you are specific & clear - then the default rule of 32 will kick in

62. (1) Where an offer invites an offeree to choose b/t acceptance by promise & acceptance by

performance, the tender or beginning of the invited performance or a tender of a beginning of it is

an acceptance by performance.

(2) such an acceptance operates as a promise to render complete performance.