I.

Governing Law and Validity of Contract The fundamental legal principle that governs all contract formation is the common law.

For a valid, binding, and enforceable contract to arise under common there must be a valid offer, acceptance, and consideration. This is based on the objective test of a reasonable person. The common law has been amended by the legislature in certain instances regarding contract for the sale of goods, governed under Article Two of the Uniform Commercial Code, and regarding the enforceability of certain oral contracts which fall under the Statute of Frauds enacted by the particular jurisdiction. II. Walter Fitzgerald v. Penny Lane Pool Builders (PLPB) A. Is the yellow page advertisement for pool building a valid offer? An offer is an outward manifestation of the offerors willingness to enter into a bargain, oral or written, that signals to the offerer that his assent to the bargain is invited and will conclude the deal. A valid offer must include certain definite terms including the parties involved, the intention to be bound by the offer, the subject matter, and the value to be exchanged. Advertisements, catalogues, and circular letters containing price quotations are usually construed as mere invitations for offers. However, in certain circumstances, courts have treated advertisements as offers where the language of the advertisement can be construed as containing a promise, the terms are certain and definite, and the offeree is clearly identified through express terms such as first come first served.

The advertisement that PLPB placed in the yellow pages in which Walter Fitzgerald read does not constitute an offer. First, it does not contain a definite promise to perform the specific work that Walter Fitzgerald wants PLPB to perform. Second, there is no price listed in the advertisement as to the cost of any particular job. The price is based on the custom design and dimensions of each pool built. Third, the offeree is not clearly identified in this advertisement. A reasonable person would determine that PLPB did not demonstrate an intention to contract with everyone that received the phone book and read the yellow pages advertisement. This would be impracticable as PLPB would physically be unable to perform under every offer accepted. Thus, Mr. Fitzgeralds assent was not invited to conclude the deal and the advertisement was not a valid offer. B. Is Walter Fitzgeralds letter written in response to the ad a valid offer? As stated above, a valid offer requires the existence of reasonably definite terms including the parties involved, the intention to be bound by the offer, the subject matter, and the value to be exchanged. These terms must be certain enough to provide a basis for determining the existence of a breach and an appropriate remedy in case of controversy. A valid offer may arise out of more than one communication. Mr. Fitzgeralds writing on May 1st in response to PLPBs advertisement supplied the missing elements necessary to create a valid offer. Mr. Fitzgerald offered PLPB to excavate, cast the concrete, tile and build him a customized pool with specified dimensions. The parties are now clear (Mr. Fitzgerald and PLPB). The intention is clear from the language of the letter that Mr. Fitzgerald intends to be bound by his offer (I hereby agree/promise). The subject matter is more clearly defined as Mr. Fitzgerald includes the dimensions of the pool to be built. The value
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to be exchanged is also clear now and can be determined by a reasonable person based on the dimensions of the pool despite the lack of a stated price. Thus, this is a valid offer. C. Is there an acceptance of the offer? Once an offer is made to the offeree, the offeree has the power to accept the offer, reject the offer, or make a counter offer. Acceptance of an offer is a manifestation of assent to the terms made by the offeree in the manner required. The common law requires that the terms of acceptance be equivalent to the terms of the offer under the mirror image rule, or else a counteroffer is made. PLPB telephoned Walter Fitzgerald to reject the offer made by Walter Fitzgerald to PLPB in the May 1st letter because PLPB was completely booked up for all of 2010. PLPB exercised its freedom from contract by rejecting Mr. Fitzgeralds offer. Thus, PLPB is not liable to Walter Fitzgerald for breach of contract. III. Walter Fitzgerald v. Major Noot Landscaping (MNL) A. What legal principle governs? While the common law of contract governs all contract formation, the legislature has amended the common law in the area of contract for the sale of goods under the Uniform Commercial Code Article Two. A few definitions are necessary to determine what type of contracts fall under this exception. A good is anything that is moveable at the time of identification to the contract for sale. A person selling the good must be a merchant in the business of selling the good that is under question.

In this case, the subject matter of the purported contract is sod. Because sod is moveable at the time it is ordered for delivery it is a good. MNL is in also a merchant by the fact that it is in the business of selling sod and other landscaping needs. Thus, Article Two of the Uniform Commercial Code governs this legal relationship. B. Is there a valid and binding contract? To determine if a valid and binding contract is formed between the parties under the Uniform Commercial Code, the court still looks to see that a valid offer was made, accepted, and it was supported by consideration. Mr. Fitzgerald made an offer to MNL when he called in his purchase order for 10,000 square feet of green sod at $6.00 per square foot from MNL amounting to $60,000 to be delivered to him on September 20, 2010. MNL accepted the offer over the telephone when the purchase order was made, thus, creating a binding agreement. The consideration for this agreement was the exchange of $60,000 for the 10,000 square feet of green sod. This creates a bilateral contract as it is a promise exchanged for a promise. Mr. Fitzgerald promised to pay MNL $60,000 in exchange for MNLs promise of delivery of the 10,000 square feet of sod. Thus, a valid and binding contract was formed between Mr. Fitzgerald and MNL. C. Is this contract enforceable? The common law of contracts does not require a contract to be written in order to enforce it. But the legislatures in the forty-nine common law states have amended the common law to require that any contract for the sale of goods over $500 to be in writing and signed by the person against whom enforcement is sought under the Statute of Frauds. This provision

determines if an otherwise valid and binding contract is enforceable by the court, as the court is bound to follow the Statute of Frauds in enforcing contractual relations. The contract in question is a sales contract between Mr. Fitzgerald and MNL. The purchase order is well over $500. It is actually $60,000. The contract between the parties was completely oral made by telephone. With no written receipt and no signature by either party, this contract does not meet the requirements under the Statute of Frauds and is, therefore, unenforceable. D. Does Walter Fitzgerald have a claim against MNL based on reliance? While the Statute of Frauds bars enforcement of an oral contract for the sale of goods over $500, the Uniform Commercial Code, like common law, does not bar enforcement of an agreement when a party has relied on the agreement to their detriment. For the party to recover under reliance, the party seeking recovery must objectively prove: (1) there was a promise made, (2) the promisor expected to induce action or forebearance on the part of the promisee or a third person, (3) the promisee took some action, (4) a reasonable person would take the action that the promisee did, and (5) proof to the court that in light of all four requirements, the court should allow some sort of recovery. In the case of Mr. Fitzgerald and MNL, a promise was made by MNL to Mr. Fitzgerald that it would deliver the 10,000 square feet of sod requested in the early morning of September 20, 2010. MNL expected to induce an action of payment for the sod on behalf of Walter Fitzgerald or it would not have made the promise to deliver the sod. MNL told Mr. Fitzgerald that it would be delivering the sod early in the morning to keep it cool and moist.

Mr. Fitzgerald made necessary preparations for the delivery of 10,000 square feet of sod and not 2,000 square feet as was delivered: he rented a tractor and earth-leveling machine, worked all day September 19th leveling the site for the sod to be laid the following day, and used 4,000 gallons of water wetting the site. A reasonable person in the shoes of Mr. Fitzgerald would have relied on the promise of delivery by MNL and would have taken the same or similar steps in preparation of the sod delivery. If these steps were not taken, there is a risk that the sod would be destroyed as it sits waiting to be planted. Thus, justice requires that Mr. Fitzgerald be compensated for his out-of-pocket expenses in readying the ground to have 10,000 square feet of sod laid including the machine rentals and water. These costs can be proven to the court via receipts for the rentals and a water bill for the used water. As these costs will have to be incurred again when Mr. Fitzgerald secures the remaining 8,000 square feet of sod to complete his project, Mr. Fitzgerald should be able to recover up to the costs of his reliance in the absence of an enforceable contract. IV. Major Noot Landscaping (MNL) v. Walter Fitzgerald A. Does MNL have a claim against Walter Fitzgerald under restitution? Restitution is used in contractual situations where one party has conferred a benefit on another party but cannot collect payment because the contract is defective or no contract exists. The party attempting to collect under restitution has the burden of proving that restitution is appropriate by proving: (1) that there was a transfer of benefit from the party seeking restitution to the party against which restitution is being sought, (2) that the benefit has a value, (3) the party claiming restitution transferred benefit with expectation of being compensated (it was not a gift),

(4) retention of the benefit would enrich the other party and the enrichment would be unjust, and (5) there is no superior benefit available (such as in contract or reliance). In this situation, MNL transferred the sod (a benefit) to Mr. Fitzgerald. The sod has a determinable value of $6.00 per square foot. MNL expected to be paid for this transfer of sod. The retention of the sod is an enrichment to Mr. Fitzgerald as it adds to the value of his home. This enrichment would be unjust to MNL because Mr. Fitzgerald did not pay for it. Because the oral contract created between the parties is unenforceable and MNL is the party that has breached the agreement, there is no superior remedy available to MNL to recover under. Therefore, MNL can recover against Mr. Fitzgerald under restitution for the price of the 2,000 square feet of sod that was actually delivered. V. Rosaleen Byrne v. Walter Fitzgerald A. Is there a valid, binding, and enforceable contract? As explained above, the controlling legal principle when the subject matter at issue involves the sale of goods is the Uniform Commercial Code Article Two. Stones are goods because they are moveable at the time of identification for contract, and Ms. Byrne is a merchant as she is in the business of selling the stones and gems that she finds as a gemologist. Like at common law, the Uniform Commercial Code recognizes that a valid, binding, and enforceable contract must generally be formed through a valid offer, acceptance, and consideration. The price tag on the stone at issue is an offer to the party that chooses to accept that stone at a price of $150. Mr. Fitzgerald did not accept this offer, but instead made a counteroffer to Ms. Byrne to purchase the stone for $100. Ms. Byrne rejected this counteroffer, and made her
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own counteroffer to Mr. Fitzgerald to sell the egg-sized violet-and-blue stone for $125 cash. This is a definite offer in that the parties, intention, subject matter, and value to be exchanged are all clear. Ms. Byrnes offer was accepted by Mr. Fitzgerald when he handed her $125 cash and she handed him the stone and carried it off. The consideration that passed was the specific stone for $100. Thus a valid, binding, and enforceable contract was created between Ms. Byrne and Mr. Fitzgerald for the sale of the stone. B. Is this contract voidable by Ms. Byrne on the grounds of mistake? When both parties entering into contract are mistaken about existing facts relating to the agreement, the contract may be voidable by the adversely affected party if: (1) The mistake concerns a basic assumption on which the contract is made, (2) the mistake has a material effect on the agreed-upon exchange, and (3) the party seeking avoidance did not assume the risk of the mistake. A party assumes the risk if the party adversely affected by the mistake was in a better position to know the risks than the other party or performs regardless of the lack of knowledge. Both Ms. Byrne and Mr. Fitzgerald were mistaken as to the nature of the egg-shaped stone that was sold by Ms. Byrne to Mr. Fitzgerald for $125. The contract for the sale of the stone was based on the stone being only an attractive stone not a very valuable uncut 1,905 carat sapphire worth $2.28 million. The mistake as to the type of stone materially effects the price offered by Ms. Byrne for the sale of the stone and the price that Mr. Fitzgerald accepted. But Ms. Byrne accepted the risk of the mistake because she was in a superior position as the seller of the stone to have it appraised before she priced it to sell. Ms. Byrne should have known of this risk, as she is an amateur gemologist/geologist. Mr. Fitzgerald is the innocent party to the sale as

he was purchasing the stone because he found it attractive. Thus, Ms Byrne will be unsuccessful on a claim for mistake against Mr. Fitzgerald to void the contract and replevy the stone.