Assent

1. Assent Contracts – Prof. Merges Feb. 3, 2011

2. Pyeatte v. Pyeatte • History • Facts

3. Why a restitution claim? • Contract “indefiniteness” • Still relevant?

4. What can be claimed? • Amount of claim in Pyeatte? • Time limits on claim? •  Cal Fam Code § 2641 (10 years or more, no separate recovery)

5. Dementas v. Tallas • Good case to suggest need for reform? • Is the result unfair?

6. “Seminar Topic” • Balfour v. Balfour: “where the King’s writ shall not run . . .” • Marvin v. Marvin: bringing contracts into the “intimate” sphere

8. You lookin' for trouble, Doniphan? You aimin' to help me find some?

9. Assent

10. Lucy v. Zehmer

11. Lucy v. Zehmer

12. Lucy v. Zehmer • Procedural history

13. Lucy v. Zehmer • Facts

14. Lucy v. Zehmer • Facts • What are the uncontested facts?

15. Lucy v. Zehmer • Facts • What are the uncontested facts? • The signed document

16. “We hereby agree to sell to W.O Lucy the Ferguson Farm complete for $50,000.00 title satisfactory to the buyer.” /s/ AH Zemer Ida P. Zehmer

17. We hereby agree to sell to W.O Lucy the Ferguson Farm complete for $50,000.00 title satisfactory to the buyer

18. The story surrounding the document • Seller’s story (The Zehmers)

19. The story surrounding the document • Seller’s story (The Zehmers) • Drinking, bluffing, not sober enough to drive • No serious intent to K; “it was all a joke”

20. The story surrounding the document • Buyer’s story (The Lucys)

21. The story surrounding the document • Buyer’s story (The Lucys) • Two drafts of the document (naming both Zehmers, as coowners; provision for inspection of the title) • Lucy allowed to keep the document

22. Aside: 2 consideration issues • Issue spotting

23. Aside: 2 consideration issues • Zehmer thought it wise to pay over $5 to “seal the deal” • Wood/Mattei v Hopper : Illusory promise due to title “satisfactory” clause? (“Title satisfactory to the buyer”)

24. Legal status of the parties’ dealings • “The answer admitted . . .” [P. 118, 1st full ¶ ]

25. Legal status of the parties’ dealings • “The answer admitted . . .” [P. 118, 1st full ¶ ] • Lucy’s “offer” was a joke, so the Zehmer’s actions must be seen in that light

26. What remedy was sought? • Specific performance • Why? Land/real estate is presumed to be unique, difficult to find clear market value, hard to award expectation damages

27. Who has the burden of proof here?

28. Who has the burden of proof here? • Plaintiff, of course • BUT: The defendant’s defense of unenforceability must overcome plaintiff’s introduction of the document signed by the defendants – by “clear and convincing evidence”

29. Statute of frauds • Transactions involving property usually have to be in writing • A signed writing will create a presumption of enforceability of the agreement

30. Zehmer’s “drunk” defense • What is the argument?

31. Zehmer’s “drunk” defense • Legally, what is the standard? • “unable to comprehend the nature and consequences”

32. Facts • Mrs. Z suggested that Mr. Z drive Lucy home • So how could Mr. Z be too intoxicated to understand the “nature and consequences” of the writing?

33. Focus on the document • P. 119, ¶ 3: • “Appearance of the document, 40 minute discussion, redrafting, examination of title, discussion of what was to be included, Lucy’s taking possession of it . . .”

34. What if Zehmer had been joking?

35. What if Zehmer had been joking? • “The evidence shows that Lucy did not so understand it” • Subsequent actions, completing transaction

36. Lucy’s belief • How relevant? • What if he had badly misread the situation?

37. Lucy’s belief “Not only did Lucy actually believe, but the evidence shows that he was warranted in believing that the K represented a serious business transaction . . . .” -- P. 119, ¶ 5

38. “Outward manifestation of intention” • It is not that intention is not important; it is that the objective, observable, outward manifestation of intent is all we have to go on (reliably) to determine what the intent really is

39. Why is there a K here?

40. Why is there a K here? “There had been what appeared to be a good faith offer and a good faith acceptance, followed by the execution and delivery of a written K.” P 120, ¶ 2

41. What does this mean?

42. What does this mean? • “The mental assent of the parties is not requisite for the formation of a K.” • ?

43. So what of this? • “An agreement or mutual assent is of course essential to a valid contract . . .”

44. Mutual assent • To be judged objectively, from the point of view of a disinterested spectator or observer • Would the reasonable observer believe that K behavior was occurring?

45. Role of price/payment • Why might it make a difference if the farm had been sold for $ 5.00, or $50?

46. Judge Learned Hand

47. Formal K Contemplated • P. 124 • Letter of intent/“Deal Points” – vs. formal, executed, binding K • Contracting as a process or spectrum

48. Intent not to be bound • Will be honored • If it is clearly and consistently expressed

49. Consarc, Stein v. Gelfand Stein v. Gelfand, 476 F.Supp.2d 427 (S.D.N.Y., 2007): No intent to be bound 2 drafts of deal points offered by potential partner, but never accepted; Cellular phone licenses at issue, complex subject matter – usually in writing