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George Mason School of Law

George Mason School of Law. Contracts I F. Offer and Acceptance F.H. Buckley fbuckley@gmu.edu. Coordination Games Pick a Focal Points to Meet. Formation as a Coordination Game.

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George Mason School of Law

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  1. George Mason School of Law Contracts I F. Offer and Acceptance F.H. Buckley fbuckley@gmu.edu

  2. Coordination GamesPick a Focal Points to Meet

  3. Formation as a Coordination Game • You have to meet someone here in the United States. You don’t know anything about him and he knows nothing of you. You don’t know where or when to meet. It could be anywhere in the US and it could be any day or any time.

  4. Formation as a Coordination Game • You have to meet someone here in the United States. You don’t know anything about him and he knows nothing of you. You don’t know where or when to meet. It could be anywhere in the US and it could be any day or any time. • What day?

  5. Formation as a Coordination Game • You have to meet someone here in the United States. You don’t know anything about him and he knows nothing of you. You don’t know where or when to meet. It could be anywhere in the US and it could be any day or any time. • What city?

  6. Formation as a Coordination Game • You have to meet someone here in the United States. You don’t know anything about him and he knows nothing of you. You don’t know where or when to meet. It could be anywhere in the US and it could be any day or any time. • Where in NYC?

  7. Formation as a Coordination Game • You have to meet someone here in the United States. You don’t know anything about him and he knows nothing of you. You don’t know where or when to meet. It could be anywhere in the US and it could be any day or any time. • What time?

  8. What side of the road to drive on?Coordination Games Player 2 Player 1

  9. Formation as a coordination gameAssume both parties want to agree Player 2 Player 1

  10. Promissory Accidents Player 2 Player 1

  11. Two kinds of Promissory Accidents • False Positive • We assert something. Only it’s false. • The boy cries wolf. We believe him but it’s false. • The test says you have a disease, and you believe this, only you don’t have it

  12. Two kinds of Promissory Accidents • False Positive • We think we have a contract, only we don’t • Leonard v. Pepsico

  13. Two kinds of Promissory Accidents • False Negative • You deny something. Only it’s true. • You think there is no wolf. Only there is. • The test says you don’t have the disease, only you do

  14. Two kinds of Promissory Accidents • False Negative • We don’t think we have a contract, only we do: • Lucy v. Zehmer

  15. False positives and negatives Player 1

  16. Solving the coordination problem • We need clear rules that avoid bargaining accidents • Qu. do the rules of offer and acceptance provide the parties with suitable focal points where both know either that there is or isn’t an agreement?

  17. Coordination • The parties need to know how to coordinate their attempts at agreement

  18. How to reduce promissory accidents? Offer and Acceptance • Restatement § 22(1). The manifestation of mutual assent to an exchange ordinarily takes the form of an offer or proposal by one party followed by an acceptance by the other party or parties.

  19. Offers: An Objective test • Restatement § 24. 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.

  20. Acceptance: An Objective test • Restatement § 50. Acceptance of an offer is the manifestation of assent to the terms thereof…

  21. How to reduce promissory accidents? • What if we could identify the party who could at least cost eliminate the accident?

  22. How to reduce promissory accidents? • What if we could identify the party who could at least cost eliminate the accident? • Who was this in Bailey?

  23. How to reduce promissory accidents? • What if we could identify the party who could at least cost eliminate the accident? • And in Zehmer?

  24. What counts as an offer? • Offers to the Public: Offers vs. “Invitations to treat” • Unilateral contracts • Offers vs. “mere puffs”

  25. Offers to the PublicCourteen Seed v. Abraham 207 • What did the flyer say? • F.o.b.? • What if it had been 49,500 lbs.?

  26. Offers to the PublicCourteen Seed v. Abraham 207 • What did the flyer say? • “I am asking” • Could that have been accepted as an offer?

  27. Offers to the PublicCourteen Seed v. Abraham 207 • What about the response to “wire firm offer”? • What is the relevance of use of telegrams?

  28. Offers to the PublicCourteen Seed v. Abraham 207 • What did the flyer say? • What did Abraham mean when he said “I am asking” in the return wire?

  29. Offers to the PublicCourteen Seed v. Abraham 207 • Offer v. Invitation to treat • Why does the distinction make sense?

  30. Offers to the PublicCourteen Seed v. Abraham 207 • Offer v. Invitation to treat • Why does the distinction make sense? • Christy hypothetical on page 213

  31. Offers to the PublicCourteen Seed v. Abraham 207 • Offer v. Invitation to treat • Why does the distinction make sense? • Why should cheap talk be non-contractual?

  32. Offers to the PublicFairmont v. Cruden-Martin 210 • Can you distinguish this case?

  33. Offers to the Public • Can you distinguish this case? • “we quote you … for immediate acceptance”?

  34. Offers to the Public • Can you distinguish this case? • “for immediate acceptance”? • Qu. Ambiguity in 10 carloads

  35. Lefkowitz 213 Offer or Invitation to Treat?

  36. Lefkowitz • Could the offeror revoke his offer?

  37. Lefkowitz • Could the offeror revoke his offer? • Restatement 36(1) An offeree’s power of acceptance may be terminated by:(c) revocation by the offeror

  38. Lefkowitz • Did the offeror revoke in time? • Could the offeror revoke through a private “house rule”?

  39. Lefkowitz • Suppose that the Π had written to the Δ and said “I accept”? • Could it be accepted in that way?

  40. Lefkowitz • Suppose that the Π had written to the Δ and said “I accept”? • Could it be accepted in that way? • Buyers could only accept by showing up with the $1.

  41. Lefkowitz • Suppose that the Π had written to the Δ and said “I accept”? • Corbin at 206: unilateral vs bilateral contracts—what is the difference?

  42. Lefkowitz • Suppose that the Π had written to the Δ and said “I accept”? • Unilateral Contracts: Where the offeree can accept only by performance • Bilateral Contracts: The offeree accepts by return promise

  43. Lefkowitz • Suppose that the Π had written to the Δ and said “I accept”? • Was Lefkowitz obliged to buy the coat?

  44. Lefkowitz • Suppose that the Π had written to the Δ and said “I accept”? • How is this different from the Christy example on p. 213?

  45. Lefkowitz • Is the distinction that the store insisted on the offeree showing up at the store? • And why did that matter to the store?

  46. Why is it so hard to get from one store to another at Pentagon Mall? Pentagon City Mall

  47. Carlill v. Carbolic Smoke Ball at 224 A vagueness problem?

  48. Carlill v. Carbolic Smoke Ball at 224 Within what time is this protection to endure? Is it to go on for ever?

  49. Carlill v. Carbolic Smoke Ball at 224 What’s a mere puff?

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