Chapter4AgreementsandPromises.docVIP

Chapter 4: Agreements and Promises AGREEMENTS TO AGREE General rule – agreements to agree are not binding Parties can agree that preliminary agreement is a binding K even though it says parties will finalize later Can agree that it is not binding Look at circumstances to see if preliminary agreement should be binding Words/language (Arcadian [language in memo that says “negotiations may fail” shows no intent to be bound] B496 N2) Specifics Terms When is it a K? Emphasis is on acceptance = offer – 19th century Moves parties from no K to K Terms must be reasonably definite and complete Parties make Ks, courts will not find deals for them Mid 20th century – criticize emphasis on acceptance = offer Relational theory of Ks – McNeil Distinction btwn discreet and relational K Discreet = one shot Relational = longer term, develop over time Stresses that could be K even without a specific point in time where acceptance = offer May drift through negotiations over time INTENT – Llewellyn Thought was too mechanical of a process – should look at intent More tolerate of gaps If leave open terms need to indicate method to determine it later if want it to be binding (Martin [not binding b/c left open rent term saying “would be agreed upon”] B505 N4) UCC 2-204(3) Even though one or more terms are left open a K for sale does not fail for indefiniteness if the parties have intended to make a K and there is a reasonably certain basis for giving an appropriate remedy Look at what parties in fact intend (Palmer [despite writing saying memo of intent and “subject to” language, court said no s/j, need trial, language does not rule out K] B490 N2) Leaving gaps that leave open important terms may indicate intention not to be bound (Empro [“subject to” controls – not a K] B501 N3) BATTLE OF THE FORMS Background Writings used by businesses do not follow legal terminology Each side prepares their own forms Lots is pre-prepared by each side, with legal assistance Often forms do not match M