assent contracts – prof. merges feb. 3, 2011. pyeatte v. pyeatte history facts
TRANSCRIPT
What can be claimed?
• Amount of claim in Pyeatte?
• Time limits on claim?
Cal Fam Code § 2641 (10 years or more, no separate recovery)
“Seminar Topic”
• Balfour v. Balfour: “where the King’s writ shall not run . . .”
• Marvin v. Marvin: bringing contracts into the “intimate” sphere
“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
We hereby agree to sell to W.O Lucy the Ferguson Farm complete for $50,000.00 title satisfactory to the buyer
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”
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
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”)
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
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
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”
Statute of frauds
• Transactions involving property usually have to be in writing
• A signed writing will create a presumption of enforceability of the agreement
Zehmer’s “drunk” defense
• Legally, what is the standard?
• “unable to comprehend the nature and consequences”
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?
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 . . .”
What if Zehmer had been joking?
• “The evidence shows that Lucy did not so understand it”
• Subsequent actions, completing transaction
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
“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
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
What does this mean?
• “The mental assent of the parties is not requisite for the formation of a K.”
• ?
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?
Role of price/payment
• Why might it make a difference if the farm had been sold for $ 5.00, or $50?
Formal K Contemplated
• P. 124
• Letter of intent/“Deal Points” – vs. formal, executed, binding K
• Contracting as a process or spectrum
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
Empro Manufacturing Co, Inc v Ball-Co Manufacturing, Inc, 870 F2d 423 (7th Cir
1989).
The 3-page agreement “will be subject to and incorporated in a formal, definitive Asset Purchase Agreement signed by both parties.”
No binding K; “agreement in stages is a valuable business tool”