1. 2/7/2006Class 131 Class 13, Tuesday, Feb. 7 Announcements Thursday221-40 Friday240-54, incl. Problem 3-4 Today’s agenda Incomplete bargaining Walker v. Keith Quake Construction v. American Airlines

2. 2/7/2006Class 132 Later today is a good time to try Essay Question 2 from the Fall 1995 Exam (30 minutes to read facts and write response).

3. 2/7/2006Class 133 Answer to last week’s puzzler Mark Burnett et al. would have to pay Richard Hatch an additional $538,461.54 (beyond the $1,000,000 prize) to cover his tax liability, assessed at 35%.

4. 2/7/2006Class 134 Walker v. Keith Kentucky Court of Appeals 382 S.W.2d 198 (1964)

5. 2/7/2006Class 135 Who is suing whom? For what kind of damages? What is the subject matter of the transaction? What is the legal basis for the claim? What is the factual basis for the claim? Arguments/defenses?

6. 2/7/2006Class 136 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?

7. 2/7/2006Class 137 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 contract unless the terms of the contract are reasonably certain. (2) The terms of a contract 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.

8. 2/7/2006Class 138 Jackson v. Pepper Gasoline--rent = "an amount equal to one cent per gallon of gasoline delivered to said station.--Kentucky case Here--“rental will be fixed in such amount as shall actually be agreed upon by the lessors and the lessee with the monthly rental fixed on the comparative basis of rental values as of the date of the renewal with rental values at this time reflected by the comparative business conditions of the two periods."

9. 2/7/2006Class 139 Oregon case--Edwards v. Tobin--court enforced a lease agreement which provided that the rent should be "determined" at the time of renewal, "said rental to be a reasonable rental under the then existing conditions." Court there said that was fine. What does this court say about the reasoning in this case?

10. 2/7/2006Class 1310 What’s the degree of certainty that this court requires?

11. 2/7/2006Class 1311 Note 2 jurisdictions are in conflict on this issue

12. 2/7/2006Class 1312 Note 3 UCC 2-305 and open price term

13. 2/7/2006Class 1313 Note 4 Oglebay Norton Co. v. Armco, Inc. “relational contracts” approach

14. 2/7/2006Class 1314 Quake Construction, Inc. v. American Airlines, Inc. Supreme Court of Illinois 141 Ill.2d 281, 152 Ill. Dec. 308, 565 N.E.2d 990 (1990)

15. 2/7/2006Class 1315 American Airlines Jones Brothers Construction Corp. (GC) Quake Construction (SC) sub-subcontractors

16. 2/7/2006Class 1316 Who is suing whom? For what kind of damages? What is the subject matter of the transaction? What is the legal basis for the claim? What is the factual basis for the claim? Arguments/defenses?

17. 2/7/2006Class 1317 What happened at the trial court level? What happened on first appeal? Second appeal? Issue? Authorities/Rule? Application to facts in case? What policies does it further/ignore?

18. 2/7/2006Class 1318 Intention “In determining whether the parties intended to reduce their agreement to writing, the following factors may be considered: whether the type of agreement involved is one usually put into writing, whether the agreement contains many or few details, whether the agreement involves a large or small amount of money, whether the agreement requires a formal writing for the full expression of the covenants, and whether the negotiations indicated that a formal written document was contemplated at the completion of the negotiations. Other factors which may be considered are: "where in the negotiating process that process is abandoned, the reasons it is abandoned, the extent of the assurances previously given by the party which now disclaims any contract, and the other party's reliance upon the anticipated completed transaction.” p.280, bottom

19. 2/7/2006Class 1319 Concurrence by Justice Stamos

20. 2/7/2006Class 1320 Formal K contemplated--often letter of intent Three basic possibilities: 1. K. Written K only a formality 2. no legal obligation 3. limited K--parties are not bound to the Big K, but have bound themselves to negotiate in good faith toward the big K Which of these it is turns on the intent of the parties.

21. 2/7/2006Class 1321 Promissory estoppel? omitted part of the opinion—court upholds appellate court decision to reverse the dismissal of the promissory estoppel/reliance claim more on this in note 5 following case

22. 2/7/2006Class 1322 End of class Thursday221-40 Friday240-54, incl. Problem 3-4 If you want to practice an essay question, try Fall 1995, Question 2. If you want to try it under timed circumstances, give yourself 30 minutes to read and write your response.