A offers to sell B as many of product X as B may choose to buy, B accepts agreeing to buy as much as he wants of product X (illusory B’s acceptance has – not bound him to buy anything: A offers a service to B, B agrees but reserves the right to terminate the agreement at any time (illusory B’s promise is not consideration) – Same as example a but A requires B to buy at least 100 of product X and B agrees (not illusory B has agreed to pay something) – Comment: Reserves a choice of alternative performances See Output & Requirement Contracts for the UCC Approach Moral Obligation Promise for Benefit Received (R.2d §86) 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. A promise is not binding under subsection (1) If the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or To the extent that its value is disproportionate to the benefit. Elements Promise In recognition of a benefit previously received by the promisor from the promisee Enforced to the extent necessary to prevent injustice Not a gift (promisor has been unjustly enriched) Enforced only to the extent proportionate to benefit Promissory Estoppel Promise reasonably Inducing Action or Forbearance (R.2d §90) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a 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. (omitted) Comment: Does justice require enforcement? Definite & substantial character of the reliance Reasonableness of the reliance Formality of the promise
A offers to sell B as many of product X as B may choose to buy, B accepts agreeing to buy as much as he wants of product X (illusory – B’s acceptance has not bound him to buy anything: A offers a service to B, B agrees but reserves the right to terminate the agreement at any time (illusory – B’s promise is not consideration) Same as example a but A requires B to buy at least 100 of product X and B agrees (not illusory – B has agreed to pay something) Comment: Reserves a choice of alternative performances See Output & Requirement Contracts for the UCC Approach Moral Obligation Promise for Benefit Received (R.2d §86) 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. A promise is not binding under subsection (1) If the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or To the extent that its value is disproportionate to the benefit. Elements Promise In recognition of a benefit previously received by the promisor from the promisee Enforced to the extent necessary to prevent injustice Not a gift (promisor has been unjustly enriched) Enforced only to the extent proportionate to benefit Promissory Estoppel Promise reasonably Inducing Action or Forbearance (R.2d §90) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a 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. (omitted) Comment: Does justice require enforcement? Definite & substantial character of the reliance Reasonableness of the reliance Formality of the promise
CONTRACTS-OUTLINE-HULL-2007-2008.docx