Contracts - Session 07
Transcript
Sarah Downs: Hello, Professor!Sarah Downs: I just had a quick question.
Sarah Downs: I’m not in your class… I’m not sure if you can hear me, so…
SFV Room 200B: I’m sorry, what was that again?
Sarah Downs: Yeah, hi, Professor. I’m not in your class, however, I wanted to know if I could sit in and review your contracts class.
SFV Room 200B: Yes, ma’am, absolutely. We’ll be happy to have you. Just make sure your entire face is on camera.
Sarah Downs: Okay, will I re… Okay, thank you.
SFV Room 200B: Thank you.
SFV Room 200B: Hi.
SFV Room 200B: do the collaboration.
SFV Room 200B: See, you guys have slides? No, we don’t have anything. Our slides are all case prints, that’s it. We don’t get no rules, nothing. I’m lost in that class.
SFV Room 200B: Okay, so yes, there is.
SFV Room 200B: Six… All we do is we thought.
SFV Room 200B: Interesting.
SFV Room 200B: Sure.
SFV Room 200B: More power than the other ones, and it’s mixed semester.
SFV Room 200B: I think I’m starting from…
SFV Room 200B: Yeah, they do.
SFV Room 200B: The fact that he knows the topic, he knows the topic, but he doesn’t know how to teach it. Do they always don’t know how to teach it.
Sarah Downs: Professor, can I also have your email, please?
SFV Room 200B: Sorry.
Sarah Downs: some ads.
SFV Room 200B: It’s on the syllabus.
Sarah Downs: I don’t have access to the syllabus yet, they wanted me to ask you first.
SFV Room 200B: Oh, look who’s here! You see how his eyes and his face? How do you know? How are you? Yes, he is. How are you?
SFV Room 200B: Yes, he is. That’s why I held ranks.
SFV Room 200B: Oh yeah, sure. Easier for me, because my computer dies every time, so I need to be near a power switch, so…
SFV Room 200B: The, individual that was on Zoom asking for email address sent me a text message to 310… 1-946660.
SFV Room 200B: 310-994-6660, and I’ll respond tonight.
SFV Room 200B: I’m gonna put… Yeah, sorry. Would this be a correct definition for Carlos?
SFV Room 200B: I know. It’s such a fun SUV. Perfect. But no, I want to get the Clan S or the…
SFV Room 200B: Changing place.
SFV Room 200B: Oh, thank you.
SFV Room 200B: All this fails 4Runner. Sorry? 4Runner. 4Runner is a… is a… I told you what I feel about 4Runner. It’s a beautiful, beautiful, beautiful car. I had it for years, loved it. I had two 4Runners. Another person still had it, like, after that many years. I bought it… I bought the 4Runner from an auction for, like, $17,500 when I was…
SFV Room 200B: In college. In law school, I sold it to a friend of mine for $16,000. After 4 years, years later, years later, I saw him in court downtown. And I said, hey, what was going on? What happened to that car? He’s like, oh, it’s right in the parking lot. I’m driving it, it’s beautiful, it’s beautiful. I’m like, are you kidding me? Because I know business around that car. If it was at a bar shop.
SFV Room 200B: 1971. It’s like, you think you bought it yesterday from a dealership. Swear to God, I was driving it yesterday. Because they built them different.
SFV Room 200B: Yeah, I think they still do a very, very good job on those cars.
SFV Room 200B: Yeah, exactly. That’s why we’re here. It’s true. Not only 3 days ago, I was thinking, if I had not gone to law school… I’m not kidding. Honda Civic.
SFV Room 200B: Perfect, Cor. I had one of those, too.
SFV Room 200B: I destroyed it. It was cut in half. I was racing somebody on Chandler. It saw the air. Like, you know, the sea start, and then the car came down, and basically was cutting into pieces.
SFV Room 200B: Alright. No, they would have to open up something.
SFV Room 200B: 6.31, I think. What time is it? 32. 32? Oh my god. It just became 32. You’re asking for it. I’m sitting on a high chair today. You just want to brief all the cases tonight. Possibly. But, unfortunately…
SFV Room 200B: Okay, so we are on week 7.
SFV Room 200B: I thought we were on week 8, and I freaked out.
SFV Room 200B: Isn’t it week 8? We’re on week 7.
SFV Room 200B: And as you probably know, November 17, school ends.
SFV Room 200B: Florida, at least this semester ends.
SFV Room 200B: And, we have one makeup class, so I haven’t decided when that makeup class is going to be. Most likely, just as always, it’s going to be Saturday… Saturday morning.
SFV Room 200B: Right? And it’s gonna be right here, live, all will be here, you don’t have to be, but if you are, well, great!
SFV Room 200B: Right?
SFV Room 200B: And, I’ll ask…
SFV Room 200B: Dean Zand to bring some donuts. Because I always forget. I’ll be there then, for sure. No particular reason. I know, I know. That’s why I always carry donuts in my car in case I get pulled over. That’s crazy.
SFV Room 200B: That’s the secret. That’s the secret? That’s the secret to getting out of it. Exactly. That’s not the right secret. Just have gift certificates for a death certificate. Sir? Here’s my driver’s license.
SFV Room 200B: Ruben Agarzanian? Here.
SFV Room 200B: Roberto Campos? Right here.
SFV Room 200B: Marco Ganilowski. Brianna. Joseph, Pejagian? Here. Have I been that bad? You’re a professor. Okay, for now. Have I been that bad? No, no, you haven’t pronounced it, I’ll give you a chance.
SFV Room 200B: Brianna Aurora, Gamaro Estrada. Actually, 10 out of 10. Really? 10 out of 10, yeah. Oh, see? She’s lying. Well, thank you for making it easy. Extra credit, please.
SFV Room 200B: Robert Nazarian?
Robert Nazarian: Here, Professor.
SFV Room 200B: Go ahead, Petrosian. Here.
SFV Room 200B: Danny Ramirez. Here. Armand Zafarian? Here.
SFV Room 200B: Joshua Zoom. Here, Professor.
SFV Room 200B: Lucine Abrahamian.
Lusine Abrahamian: Here.
SFV Room 200B: Surin Abraham means.
Suren Abrahamyan: Here.
SFV Room 200B: Edmund Agile.
Edwin Aghilian: Here, Professor.
SFV Room 200B: Thank you, make sure your entire face is showing on camera. Daniel Orman.
SFV Room 200B: Jason is easy.
SFV Room 200B: Jason Azizi.
SFV Room 200B: Armen Bashian.
Armen Bashian: Good evening, Professor.
SFV Room 200B: What do you mean? Franz, Biambi.
frantzbiamby: Here.
SFV Room 200B: Victoria Briones.
SFV Room 200B: Giancarlo… Salidon Hernandez.
SFV Room 200B: Giancarlo?
SFV Room 200B: Fabricia… Hora. Herrera.
SFV Room 200B: Fabricio Pereira?
SFV Room 200B: Honda Galzian.
Anna Galadzhyan: Here, Professor.
SFV Room 200B: Sona Khazarian.
Sona Ghazaryan: You’re a professor.
SFV Room 200B: Kevin Golovati.
SFV Room 200B: Heaven Kolabati.
SFV Room 200B: Beautiful!
SFV Room 200B: That’s what you’re on.
SFV Room 200B: Cilstar Gonzalez.
Cesar Gonzalez: on Zoom.
SFV Room 200B: Paul Gonzalez.
Paul Gonzalez: Professor.
SFV Room 200B: Ana Hakopian. Your professor. Karin Hernandez-Vazquez.
Karen Hernandez: Dear Professor.
SFV Room 200B: Ruben Hunanian.
Ruben Hunanyan: Here, Professor.
SFV Room 200B: Rita… Karayan.
Rita Karaian: Here, Professor.
SFV Room 200B: Liana Caribian.
LIANNA KARIBYAN: Here.
SFV Room 200B: Rikor Kasavia.
SFV Room 200B: Yes, hello. Karo Porscarian.
Karo Koshkaryan: Here, Professor.
SFV Room 200B: Madlena Kushkaria.
maddykoshkaryan: You’re a professor.
SFV Room 200B: Adrian, Kumamoto.
Adreanne Kumamoto: Here, Professor?
SFV Room 200B: Cynthia Logger.
Cynthia Llauger: Here, Professor.
SFV Room 200B: Jason McCarion.
Jason Makaryan: I’m here.
SFV Room 200B: Marukurian, sorry. Sabrina Malekan.
Sabrina Malekan: Here, hi.
SFV Room 200B: Our term is Lumion.
Arthur Mazloumian: dear.
SFV Room 200B: Jana Masmanian. I’m here.
SFV Room 200B: Arman Mirzoyan. Here.
SFV Room 200B: Say you dig, Gilan.
zahra movassaghigilani: present, professor, and Zoom.
SFV Room 200B: Laura… Moradian.
Laura Muradyan: Here.
SFV Room 200B: Sebastian Nazar.
SFV Room 200B: Neoni Nazarian. Here.
SFV Room 200B: Ilona Nazarian.
SFV Room 200B: Amonga or den.
Amanda Oden: Here.
SFV Room 200B: Masi or Yaga.
Masie Oyaga: Here.
SFV Room 200B: Alexander Poveretsky.
Alex Poberezhskiy: You’re…
SFV Room 200B: Jasmine Corzanjani.
Jasmine Pourzanjani: Here…
SFV Room 200B: Silvara Safariant.
Sevada Safarian: You’re a professor.
SFV Room 200B: Isabel Solazar.
Isabel Salazar: Here.
SFV Room 200B: Caria Salazar Maria.
Karia Salazar: Here.
SFV Room 200B: Susie… I’m here.
Suzy Shkhrdumyan: Professor.
SFV Room 200B: Charlie Mian. Thank you. Carmen Smith.
SFV Room 200B: Canberra.
Cameron Smith: Here.
SFV Room 200B: Thank you, sir.
SFV Room 200B: Yesenia Surya.
Yessenia Soria: Here, Professor.
SFV Room 200B: Annabella Sula Hyan.
Anabella: Here, Professor.
SFV Room 200B: Clarissa Terrasas.
Clarissa Terrazas: Here.
SFV Room 200B: Daniel… Plungeon.
Daniel Toukhlandjian: Here.
SFV Room 200B: Arthur Poskechian. Here.
SFV Room 200B: Madonna!
SFV Room 200B: Where’s my donut? There she is. Middle of the street.
Madona Yousef: I’ll be back next week.
SFV Room 200B: It’s your birthday, Madonna, where’s the birthday cake?
Madona Yousef: Thank you, thank you.
SFV Room 200B: No problem. Alright, so… Do I have Jason as easy?
SFV Room 200B: Giancarlo Celigon Hernandez. Thank you. There you are.
SFV Room 200B: Fixed.
SFV Room 200B: All right.
SFV Room 200B: Anybody’s name I did not call.
Rami Helo: Me, Professor, Rami Hilo.
SFV Room 200B: Spell your first and last name, please.
Rami Helo: First name, R-A-M-I. Last name, H-E-L-O.
SFV Room 200B: Anyone else?
Fatima Razavi: Professor Lee? Fatima Razavi?
SFV Room 200B: Oh, Mr. Zucker.
Fatima Razavi: Hello?
SFV Room 200B: Great.
Yanique Reid: Any great professor?
SFV Room 200B: Anyone else?
Yanique Reid: Yannique Reed.
SFV Room 200B: Spell your first and last name, please.
SFV Room 200B: I-A-N-I-Q-U-E. The last name is R-E-I-D.
SFV Room 200B: Thank you. Anyone else?
Juan Esparza: I’m Professor Juan Sparzan, J-U-A-N-E-S-P-A-R-Z-A.
SFV Room 200B: Thank you, sir. Anyone else?
Daniel Sheck: Professor Daniel, E-A-N-I-E-L.
Daniel Sheck: Check. S-H-E-C-K.
SFV Room 200B: S-H-E-C-K.
Daniel Sheck: Yes, sir. Thank you.
SFV Room 200B: Thank you. Anyone else?
SFV Room 200B: We’re gonna need professors.
SFV Room 200B: Oh, I didn’t call your name? Yeah, how did you still? I emailed them two weeks ago. Tell them, Professor Cates said, I’m an A student. Do it now. I’m showing you.
SFV Room 200B: No, I won’t control you. I won’t scream at you. First and last name, can you? P-D-I-N-E.
SFV Room 200B: And last name is D-A-P-T-I-A-N.
SFV Room 200B: Thank you, Matt. Thank you.
SFV Room 200B: D-A-P-T-I-I… D-A-V.
SFV Room 200B: Queen Sayyah. Thank you.
SFV Room 200B: Anyone else?
Josue Flores: You didn’t call my name, Professor, it’s Josue J.
Josue Flores: O-S-U-E.
Josue Flores: Last name, Flores, F-L-O-R-E-S.
SFV Room 200B: One moment, please.
SFV Room 200B: Update language. What? Stupid AI.
SFV Room 200B: Give me your first and last name again.
Josue Flores: First name is Josue, J-O-S-U-E, last name Flores, F-L-O-R-E-S.
SFV Room 200B: Go ahead. Anyone else?
SFV Room 200B: All right, thank you.
SFV Room 200B: Let’s go to page 102, please.
SFV Room 200B: Dade versus Cockman. We didn’t do that case, did we?
SFV Room 200B: No, I think we stopped there, right? Do you want to do it? Yes. Yes, ma’am. Tours.
SFV Room 200B: Neighbors of Cleveland, Supreme Court, Portsmouth, Massachusetts, 1876.
SFV Room 200B: Mr. Day, owner of the lot 29, held a role on the stock paid money, the lot 27, which was the 10th, but, Caden, the defendant, the equitable interest.
SFV Room 200B: The point specifies that there was an express agreement on the defendant’s part to pay him one half the value of the world when the defendant should use it in building upon Lot 27.
SFV Room 200B: The defendant denied this, and stated that he never had this conversation with the plaintiff while the wall.
SFV Room 200B: Base your cadence for half of the value of the block.
SFV Room 200B: Peyton appealed a jury believed Symph’s paper.
SFV Room 200B: And then the issue here, has the party impliably accepted an offer if the party permits the other party to perform a valuable service without objection?
SFV Room 200B: Knowing that the other party expects payments in Richard.
SFV Room 200B: The ruling here, I have, if a party voluntarily accepts and avails himself of valuable services rendered properly sanit, then he has the option whether to accept or reject them.
SFV Room 200B: Even if there is no distinct proof that they were rendered by this electoral request, a promise to pay for them may inferred.
SFV Room 200B: analysis,
SFV Room 200B: For them, here, the defendant assented to, avail himself of the thank you services, which were valuable to him.
SFV Room 200B: Insert?
SFV Room 200B: And then, in fact, the defendant may agree, that he agreed to the facts, and,
SFV Room 200B: I was in contact with a plaintiff, I’m so sorry.
SFV Room 200B: No, no, it’s okay, you’re doing great.
SFV Room 200B: Yes, the defendant had the opportunity either to accept or to reject the services, and here, the Israel representative to Caden. Caden had an opportunity to reject the role, but he didn’t, and Caden knew they expected to be paid for the services.
SFV Room 200B: A jury could properly control here that a contract had been formed, and that Caden was liable for one half of the value of the wall.
SFV Room 200B: Excellent, thank you very much. So, what is the general rule of acceptance? Is it… is the general rule that you can accept by silence?
SFV Room 200B: No, that is not the general rule, and that’s why this case is here, to tell you that, again, they pay us the big bucks, because nothing is black and white, and there is always an exception, like we said, right? Almost always.
SFV Room 200B: That is an exception.
SFV Room 200B: And in this case, the rule is on, bottom of page 103, that you eloquently stated, voluntary acceptance and,
SFV Room 200B: accepts and avails himself of valuable services rendered to him for his benefit when he has the option to speak, right?
SFV Room 200B: In other words, he has the opportunity to speak, it’s happening in his presence, and he knows, or should have known, that the person that is performing the services, right, is doing it because they have a reasonable expectation of compensation.
SFV Room 200B: Okay.
SFV Room 200B: Reasonable expectation of compensation, and you have a duty to speak up, and if you don’t, failure to object means that you have accepted.
SFV Room 200B: Right?
SFV Room 200B: Hey, very good.
SFV Room 200B: This may also be true if somebody shows up on your property, by mistake.
SFV Room 200B: Right? They’re supposed to paint the next door’s house, but they start painting your house.
SFV Room 200B: And you’re like, oh, what an idiot! That guy, my next-door neighbor, told me that he was supposed to go there, but I’m not gonna say anything, let him paint for the next 5 days.
SFV Room 200B: Right? And you know he’s doing it for an expectation of payment, And you… and you have…
SFV Room 200B: Reasonable means… you don’t have to do anything unreasonable, so you’re not supposed to fly from New York to Los Angeles to tell the guy to stop.
SFV Room 200B: Right? That’s not the reasonable, but if it’s happening in your presence, that’s the best and surest way that you can literally walk out and say, stop!
SFV Room 200B: I’m not gonna pay you for this.
SFV Room 200B: If you don’t, well, then you may be stuck with the bill, right?
SFV Room 200B: Where there is an reasonable expectation of payment, and you have reason to know of that, and you avail yourself to the benefit without objecting, you may be
SFV Room 200B: I agree, you may be accepting. Very good, thank you very much. Will Hoyt on, page 104.
SFV Room 200B: Is anyone?
maddykoshkaryan: Good, Professor.
SFV Room 200B: on Zoom.
maddykoshkaryan: Yes.
SFV Room 200B: Your name, please.
maddykoshkaryan: Madlena Koshkarian.
SFV Room 200B: Ms. Kushkoyan, please.
maddykoshkaryan: Blossie B. Lawrence, a descendant arrived at the home of a distant cousin, Ruth Beck the Pell.
maddykoshkaryan: In either 1939 or 1940, uninvited, unannounced and unexpected, and stayed there until her death.
maddykoshkaryan: In 1963. Ruth Beck provided room, board, care, and companionship to Lawrence over more than 20 years. After Lawrence’s death.
maddykoshkaryan: Beck… filed a claim against Lawrence’s estate.
maddykoshkaryan: the recovery of the value, those services and accommodations, Beck asked for about $27,837 for the full period. The trial court awarded Beck $11,368. Procedural,
maddykoshkaryan: the case was, tried with the jury. Willoit, moved…
maddykoshkaryan: for a new trial after the motion was denied and appealed. The issue here is that, was there sufficient evidence to support the trial court’s finding?
maddykoshkaryan: Was the decision contrary to the law? Where, were these errors admitted? Certain evidences?
maddykoshkaryan: The Indiana Court of Appeals affirmed the trial court’s judgment for Beck.
SFV Room 200B: Okay. What is the presumption here?
SFV Room 200B: What’s… where do we start? Where… where there is a family relationship of some sort?
SFV Room 200B: what’s the presumption? We talked about this…
SFV Room 200B: previously in a different context, between husband and wife. That was where there was an agreement, but it was unenforceable in court because it’s a husband and wife relationship. Here.
SFV Room 200B: or generally, when there is a family relationship, where do we start? It’s just a good faith,
SFV Room 200B: Gratuitous promise, right? Yeah, it’s a gift promise. We start with that, so if you’re writing a final exam.
SFV Room 200B: And this comes up, the general rule is that when you’re doing
SFV Room 200B: something for the family, you don’t expect to get sued, right? Or get billed. Like, my cousin just blew up my phone earlier today. He’s a broker, and he’s about to be sued by some idiot buyer or whatever.
SFV Room 200B: And he’s like, I need advice, so I’m sure he doesn’t think that I’m going to send him a bill, unless we had a prior course of dealing, and I’m fairly sure that he’s not going to sue me for wrong advice.
SFV Room 200B: Right? But the advice apart, that’s the state bar rules, so that’s separate. You’ll find out that the state bar can kick your butt. So that… that aside.
SFV Room 200B: There is a family relationship, right? Unless we had prior course of dealings where I charged him, billed him for site services, he probably doesn’t expect me to send him a bill.
SFV Room 200B: Right?
SFV Room 200B: So we start with that, but then this court basically says the case, first of all, defines family for the purpose of the presumption of gratuity.
SFV Room 200B: And then the court says, here, the plaintiff wins, because if there’s no presumption of gratuity, or if there is an express contract, there was no express contract, but the court basically says, based on the analysis that I believe is reflected on page
SFV Room 200B: 180… no, sorry, 106.
SFV Room 200B: The court says there’s no… there’s evidence that the decedent was an independent person in the extreme!
SFV Room 200B: Came and went, went, and, as she pleased.
SFV Room 200B: And most of the time, she took her meal alone, took for herself, and entertained herself on her own guests alone. In other words, there was really no real family relationship, so… so, again, the court finds that there was an expectation of payment.
SFV Room 200B: And the court says that the presumption of gratuity can be overcome, right?
SFV Room 200B: Okay?
SFV Room 200B: Right.
SFV Room 200B: So, good seat.
SFV Room 200B: I think that’s bottom of page 106, although during the time the student lived at Beck’s home, there’s no evidence of any conversation between them concerning the matter of payment.
SFV Room 200B: We’re of the opinion that the facts and reasonable inferences, therefore, meet the requirement that the finding of the implied contract be supported by substantial evidence of probative value. In other words, the court says course of conduct can substitute for an actual agreement, right, between the parties.
SFV Room 200B: In this case, that’s what the court found, right?
SFV Room 200B: Substantial evidence, though.
SFV Room 200B: Okay, any questions?
SFV Room 200B: So, now we learned that silence can get you in trouble, and silence, right, can actually,
SFV Room 200B: Yeah, a course of conduct can create an implied contract, which is enforceable by the courts, right?
SFV Room 200B: Okay, so do nothing or… or do something. Both can… can translate into a enforceable agreement. Right.
SFV Room 200B: Alright, pause.
SFV Room 200B: Sir.
SFV Room 200B: The plaintiff here was someone who shipped eel skins to the defendant, and it was noted that previously he had sent him about, these skins about 4 or 5 times, and each time he was paid upon delivery, and, like, the shipment.
SFV Room 200B: This time in particular, the plaintiff once again shoved the eel skins to the defendant, and he kept the skins for several months without notifying the plaintiff or even paying him on this occasion. So, the plaintiff brought suit against the defendant and won, and now the defendant appeals
SFV Room 200B: But the court ruled that the silence can…
SFV Room 200B: the silence, like, you know, displayed by the defendant can be ruled as accepting of the shipment, as long as the offering party assumed reasonably that the offer was accepted, and that was in part of the previous, dealings he had before, where there was no problems, where he would send them the skins, get paid, so naturally, the seller this time thought it was the same thing, like, he’s just keeping them.
SFV Room 200B: And he’ll send it.
SFV Room 200B: So, I think judgment was affirmed, and plaintiff was able to recover.
SFV Room 200B: Very good, thank you. The court could have viewed,
SFV Room 200B: this contract as a series of contracts, right? Under that theory, the court could have said the buyer is making an offer, a standard offer, to a series of contracts, and the seller was accepting each time the seller was delivering the goods, right? But instead, the court decided.
SFV Room 200B: That the plaintiff seller is the offeror, and that the buyer accepts by silence.
SFV Room 200B: because of the previous course of dealing, and because he retained the goods, as you correctly stated, for an unreasonable amount of time. So, one more time.
SFV Room 200B: Silence together with other facts can, in fact, create liability. In this case, a course of conduct.
SFV Room 200B: You know, between the parties. And of course, keeping the goods for so long.
SFV Room 200B: I… I’ve been… I want to give you another example. I mean, I could have put it in the final, but I’ll give it to you now.
SFV Room 200B: I’ve been testing at Verizon Wireless for the past 4 or 5 days.
SFV Room 200B: Okay, like, literally, Using… Heavy… Language, polyphon language to explain the situation.
SFV Room 200B: I suddenly decided I had no service in my own office. So, naturally, I call Verizon.
SFV Room 200B: calling Verizon can take you 45 minutes, okay? And if you’re charging $750 an hour.
SFV Room 200B: you don’t like calling Verizon because you’re not charging them $7.50 an hour, right? So, I don’t like doing that.
SFV Room 200B: Besides the fact that I’m short-fused, I blow up my fuse very fast. So, talk to them for, like, say, 2 hours.
SFV Room 200B: telling them that I have no cell reception, I want a booster. A self-booster, right? They send me a Wi-Fi extender.
SFV Room 200B: Instead.
SFV Room 200B: without telling me, they start charging my account 120 bucks a month for that stupid thing that I don’t even want.
SFV Room 200B: You can be anywhere in my office, you have absolutely perfect Wi-Fi.
SFV Room 200B: So, we just noticed that they are charging us, so, of course, I have to get back on the phone. Nobody answers. If you have to verify that you’re calling, so… it’s an SHIT show, as my wife calls it, right?
SFV Room 200B: But assume for a second that instead of
SFV Room 200B: Taking the unit, sending it back forthwith.
SFV Room 200B: and telling them, cancel whatever bullshit you just sold me that I didn’t buy to begin with, I would say to hell with it, I’m just gonna keep this unit. I’m not gonna give it back.
SFV Room 200B: They made a mistake, screw them.
SFV Room 200B: Could that silence?
SFV Room 200B: create liability for me. Potentially. You see what I mean? So my staff, several of them, including a couple of lawyers in my office, said, screw them!
SFV Room 200B: just keep the unit. I’m like, I teach contracts. I don’t think that’s a very smart group. Let’s send this piece of whatever back.
SFV Room 200B: Point being,
SFV Room 200B: Yeah, potentially, if I get into litigation with them, which I would never do over… but if that ever happens, silence, together with the fact that I had an opportunity to return the unit, there was a shipping, return shipping label in the box.
SFV Room 200B: For a reason.
SFV Room 200B: Because they probably think that some people may get pissed off. Well, just give them a shipping label, right? If not, then we just keep billing them, because they never told me anything.
SFV Room 200B: They just started billings.
SFV Room 200B: Now, mind you, that thing is, what, a couple hundred bucks at best. But they were gonna charge me a hundred and something dollars a month!
SFV Room 200B: Because they’re leasing it to me.
SFV Room 200B: Think of the fraud. Wouldn’t they have to disclose that? Not only do they have to disclose that, I’m disclosed to… I don’t know class action. If I knew class action, I would have filed one tomorrow.
Cameron Smith: Professor.
Cameron Smith: Quick side note, I found out anytime I have issues with Verizon, I email the CEO, and the Executive Resolutions team calls me, and they take care of it every time. So if you want their email, I can send it to you.
SFV Room 200B: I beg of you, please send it to me.
Cameron Smith: Got it. Done.
SFV Room 200B: Yes, sir. I just want to give them a piece of my… mind. Bad idea, Cameron, don’t do it. No, I really…
Cameron Smith: I do it all the time, so…
SFV Room 200B: Totally fine. Thank you.
SFV Room 200B: But you get the point that I’m trying to make. Similar to this.
SFV Room 200B: If you do have an opportunity to object.
SFV Room 200B: And now that I’ve found out they’re billing me, now I do know that they have a, even though, in my opinion, unreasonable expectation of payment.
SFV Room 200B: I still know that they have an expectation of payment.
SFV Room 200B: I have an opportunity, and in fact, in my opinion, a duty to speak up. I can’t just say, I’m just gonna keep this.
SFV Room 200B: Right?
SFV Room 200B: So…
SFV Room 200B: That’s an example of where you… silence could mean liability, could mean acceptance. But if you promptly object, which it took me 3 hours to object on the phone, which never worked.
SFV Room 200B: I kept all the text messages, I mean, the, what is it, chat messages, in case I need to sue them, because I’m just so pissed off.
SFV Room 200B: Yes, ma’am? In this case, would be any difference here if, there were not prior dealing? Because, again, like, for just… even for this specific last case… That’s a very good question. I want to say…
SFV Room 200B: It’s potentially…
SFV Room 200B: an issue that could come up, for sure. Is it a game changer? Probably not, because if you keep the goods for an unreasonable amount of time… 4 months. Four months, yeah. Yeah, well, you know, unless the prior dealing was that I keep the stuff for 5 months, and then I return them, and you give me my money back.
SFV Room 200B: then yes, prior course of giving could actually help the buyer, right? But if you keep something for an unreasonable amount of time.
SFV Room 200B: you bought it, essentially. I mean, that’s logic, right? It’s…
SFV Room 200B: You know, other than Costco policy, most places, seriously, most places, when you buy something, right, you have maybe 15 days or a month to recharge, right? Another example that I want to give you. I went to Burberry in Beverly Hills.
SFV Room 200B: bought a pair of shoes. I have the same pair, and in my opinion, they’re defective.
SFV Room 200B: I’m not kidding. They’re defective, but they’re so beautiful that I bought another one. I didn’t care. That is defective, and it, you know, you may twist your ankle, whatever, I didn’t care.
SFV Room 200B: But when it arrived.
SFV Room 200B: I changed my mind. I said, you know what, that’s really stupid. I really shouldn’t buy shoes just because they look good. I’m going to return the shoe.
SFV Room 200B: Which is rare for me. My wife always says, you just like to donate stuff. I never return anything. Ever.
SFV Room 200B: So, we went to… we went back to the Beverly Hills store, and the lady says, I’m sorry, sir, the return policy is 14 days.
SFV Room 200B: You can, you can say that to me, no problem, but if you say that to my wife, Men.
SFV Room 200B: Guns will come out. What did they say? The return policy is 14 days, we can’t take it back.
SFV Room 200B: And my wife immediately goes, give me your email.
SFV Room 200B: She goes into the email, she says, it arrived 10 days ago, or something.
SFV Room 200B: It’s from the time of arrival that its 14-day time runs.
SFV Room 200B: And, you know, I don’t want to be a whatever about it, but you better, you better do what is right. And of course, they call a manager, I’m like, let’s just go, I’m just gonna wait. She’s like, no! I’m not gonna let this go. Anyway, so, point being, again, keeping it for an unreasonable amount of time.
SFV Room 200B: She was within reason. It’s from the time that it arrived, that I have 14 days, not from the time that I placed the order. What if you shipped 6 months later?
SFV Room 200B: Does that mean that… can they just ship it 14 days later and just say, oh, no return policy, sorry, that would be a class action.
SFV Room 200B: And guess who told him that?
SFV Room 200B: They promptly refunded. What did you tell them? My… I did another thing, I was hiding. I was, like, in the back of the store. I want to buy more shirts. Like, you just sweetheart, you just do what you gotta do. Because, you know…
SFV Room 200B: Which is good. Which is ironic, because she’s not a contracts professor. No, but she’s a… but she’s a very good lawyer, I gotta tell you. Oh, your wife’s a lawyer? She’s a very good lawyer. Yeah, my wife.
SFV Room 200B: He met in court. She was a criminal lawyer before. He met in criminal court.
SFV Room 200B: Okay.
SFV Room 200B: Were you defending someone, and she was… I was defending, and she was defending. I thought she was prosecuting your defending. No, no, no, no. No. Nice try. No, she was defending.
SFV Room 200B: Actually, it got… caught my attention, because my wife is probably 5 foot. Her client was a supermodel, no joke. She was probably 6’3”, 6’4”. Standing next to each other, I was like, oh my god, that’s really something. Did she still talk to that supermodel?
SFV Room 200B: She’s single? She doesn’t sell donuts. Oh! I like it. Those questions.
SFV Room 200B: No. Alright.
SFV Room 200B: Acceptance of indifferent offers. The first case we’re going to do is the Horton case, which is the modern approach case. This is the modern approach.
SFV Room 200B: Case again, traditionally, matter of acceptance was extremely important, right? Because the offeror… the traditional belief was that the offeror set the manner of acceptance, yeah?
SFV Room 200B: So, it was very, very important that you accept exactly in the manner described.
SFV Room 200B: Now, let’s see what the modern approach is. That’s a Wharton case. Anybody who wants to take this case. Anyone on Zoom?
SFV Room 200B: You can do that one.
SFV Room 200B: Jesus Horton v. Daimler-Prysler Financial Services. It’s in the Court of Appeals of Texas.
SFV Room 200B: Plaintiff Wharton versus the McCrysler defendant. Facts of the case, plaintiff had a prior debt to the defendant in which he settled through a third-party recovery collection agency. When the plaintiff decided to purchase a home, he discovered his credit report still contained adverse information about the account.
SFV Room 200B: The plaintiff received two letters stating amount to be accepted, to be considered paid in full of a due date, and that all derogatory credit information would, regarding the account would be, settled within the 90 days.
SFV Room 200B: Both checks from the plaintiffs were received after the due date of the collection agency. Both checks were accepted by commercial.
SFV Room 200B: Defendant claimed that there were… there… a new contract was formed to correct derogatory credit information when the plaintiff failed to commit an original agreement because he submitted the checks after the due date.
SFV Room 200B: The plaintiff sued. Issue was whether the acceptance of the checks by commercial was a waiver or modification of the time limitation contained in the original offer, and if defendant waived any breach caused by not tendering payment in a timely manner.
SFV Room 200B: Court ruled, if an offer fails to specify the manner of acceptance, an offeree may accept in any manner reasonable under the circumstances.
SFV Room 200B: Defendant argued that June 5th offer was never accepted, and would have been valid if timely payment of the $1,000 was made. Therefore, no contract was formed pursuant to the original offer. Plaintiff argued that the offer was accepted when payments were accepted.
SFV Room 200B: But the court’s primary objective was to figure out if the intent of the… if the parties had intent. And the only way to do that is if they had three conclusions, which was the first one, the offer did not require a specific manner of acceptance, which the letter failed to indicate.
SFV Room 200B: Second one was the plaintiff accepted the offer by tendering the first payment.
SFV Room 200B: In the third one, there was an issue of fact concerning waiver. A contract was formed when the plaintiff sent the first installment, and the defendant’s long silence and no action showed waiver. Time between the second installment and the lawsuit
SFV Room 200B: defendant did not pursue the rest of the funds and did not inform plaintiff of the breach. So judgment was reversed and remanded. Excellent, thank you very much. That was very, very good.
SFV Room 200B: So, basically, the result of the Fennis elites is that, I think it’s on page 115, middle of the page, the point says.
SFV Room 200B: Borton accepted the offer by tendering the first payment, and it says.
SFV Room 200B: The court relying on Restatement Second of Contract, Section 30, says, unless otherwise indicated, an offer may be accepted in any manner reasonable under the circumstances. That’s what we take from this case.
SFV Room 200B: This language is, in fact, the modern approach of acceptance. Unless the offer is specific, very specific, as to how you can accept
SFV Room 200B: Literally, you can accept in any reasonable manner. So, even if the offer, for example, calls for a unilateral contract.
SFV Room 200B: On a bilateral contract, it still could be reasonably accepted, assuming that the acceptance has been timely communicated, which is pretty much what the court said here, not so fast to, Daimler Financial Services, right?
SFV Room 200B: Yes, sir? An acceptance to a unilateral contract. For that one, there would only be one way, right? Just to start doing it? It’s… well, that would not be an acceptance. The start would… what would it do? What would the start of performance in a unilateral contract?
SFV Room 200B: Not an industry promise, something else. It wouldn’t allow the person offering you to reverse?
SFV Room 200B: Which is… which is what? What does that mean?
SFV Room 200B: becomes irrevocable. Irrevocable becomes an irrevocable offer. Very, very good. So if you start performance.
SFV Room 200B: In a unilateral contract, the offer becomes irrevocable for a reasonable time.
SFV Room 200B: Don’t ever forget that reasonable time, right? Because you can start performance and then disappear.
SFV Room 200B: Right? As, somebody just called me today and said, I want to sue the, the,
SFV Room 200B: solar contractor. By the way, if you… if you ever install solar, please check and double check, triple check, because
SFV Room 200B: The past 4 or 5 years, I gotta tell you, man, hundreds of phone calls. Hundreds.
SFV Room 200B: At least.
SFV Room 200B: But he said the solo contractor… Triple, triple check what? Triple check what?
SFV Room 200B: To make sure that they are legit, that, you know, check the references, check their contractor’s license, check their insurance, all that stuff, because… I’m sorry to say, but based on… again, because I’m…
SFV Room 200B: I get a lot… we get a lot of phone calls. This is one of the big ones, the complaints from the public, is that they got stiffed by the general contract, specifically
SFV Room 200B: These guys, these,
SFV Room 200B: But… so he was basically telling me that he signed into a $120,000 loan, which the guy then obtained on his behalf, and pocketed the money, started doing some of the work, and disappeared. He’s gone.
SFV Room 200B: is gone. I’m not kidding. $120,000. I’m like, what kind of freaking solar costs $120,000? I heard something similar to that before. And then he said, well, I was supposed to get $50,000 of that from the money myself.
SFV Room 200B: Which people routinely do. I said, well, you gotta… I gotta take a look at your contract, but that sounds like you’re in a whole host of… and he says, would you take it contingency? I said, hell no. You gotta pay me.
SFV Room 200B: I’m sorry to say, you pay me, and then if I get it, you get it back. But the guy keeps coming up with excuses, I’m not here, I’m there, I had surgery, it’s all bullshit.
SFV Room 200B: So, why did I bring that up? Something about a reasonable time? Oh, reasonable time, thank you very much, thank you, thank you.
SFV Room 200B: Reasonable time. In other words, the beginning of performance, assuming they had no written contract, may have
SFV Room 200B: made the offer irrevocable, but only for a reasonable doubt. He can’t disappear for 4 years and come back and say, Your Honor, I want my money. I just finished the job. Nobody would accept that to be reasonable, right?
SFV Room 200B: Nobody. What determines what’s reasonable timing? Sorry? What determines what’s reasonable time? It would depend, honestly, it would really depend, like, in two weeks, I think I’m sitting as a judge in…
SFV Room 200B: Where am I sitting? Santa Monica.
SFV Room 200B: And, when I do trials without, without a jury.
SFV Room 200B: These things come up. There’s implied contracts all the time that comes in front of any judge, right? And I always think about what is reasonable? It depends on the context, right? It depends on what type of work, what type of service.
SFV Room 200B: Right? A reasonable time to cut my hair, maybe 5 minutes. Especially mine.
SFV Room 200B: Right? My daughter says, hair, no hair, to me. Hair, no hair.
SFV Room 200B: So, but, but getting, getting services such as, you know, putting the, trimming the hedges. Trimming the hedges, changing a roof.
SFV Room 200B: a month may be reasonable, but probably a year? Unreasonable, right? So it really depends on the facts and what the expectation of the parties were. Who knows if I’m right or wrong? You just…
SFV Room 200B: You just do your very best, right? I was just gonna say, wouldn’t it be, like, very apparent and obvious if there’s a time that’s unreasonable?
SFV Room 200B: Considering the context, like, if you know this job would take 2 to 4 weeks, and you see, like, 8 weeks, it’s obvious. Yeah, the short answer would be precisely what you said. I think most people would know… I exaggerate when I say 4 years, so that then you know, yeah, that’s unreasonable.
SFV Room 200B: Right? But maybe if somebody’s doing solar, and instead of 2 months, it’s 4 months, is that unreasonable all of a sudden? I don’t know.
SFV Room 200B: it’s cutting it, you know. So, I don’t know, it depends. That’s why people go to a jury. You convince the jury that
SFV Room 200B: you know, he signed up 50 other people, or 30 other people, and he didn’t pay attention to the work that he was doing for me, because guess what? He was not on my property for over 20 days, and it was not a permit issue, because permits were all granted. So the jury might find that that is unreasonable. You can’t disappear for 3 weeks.
SFV Room 200B: It wasn’t raining, nothing happened, there was no earthquake, nothing, you know, so where the hell were you?
SFV Room 200B: And that’s something a UCC can’t determine, obviously, a reasonable time, right? That’s something that only a court… Yeah, no, UCC talks about a reasonable time, but then it, it really… UCC can’t. It would be so hard, right? To execute a, a, a, buying a stock.
SFV Room 200B: when I… let’s say you go to your, what is it, broker’s site, and you say, execute to buy a stock at a certain price.
SFV Room 200B: 5 minutes may be unreasonable.
SFV Room 200B: Even 3 minutes may be unreasonable. It’s probably within a minute or so, right? I mean, I literally am standing there, like, execute! Now!
SFV Room 200B: Right? Because it fluctuates sometimes, depending on what it is. So, it… reasonableness…
SFV Room 200B: is in the eyes of the beholder. It’s what the jury or the judge, in the case of a bench trial, will decide what is reasonable. And typically, when I get those cases, to be honest, as a judge, I just turn around and question the parties.
SFV Room 200B: Right?
SFV Room 200B: I’ll get the… I get the confession, just like the job you do, right? I get the confession from the guy, from the person that I want to fight against.
SFV Room 200B: Not… not getting him to, you know, to upset him, to get him to confess, but I question him until he finds himself in a trap, right? Sir, what happened between January 1 and January 30th that you didn’t show up? What happened to you? Where were you?
SFV Room 200B: I’ll let him explain, right? He doesn’t have a valid reason? Okay. Do you find that to be reasonable? Yes? Okay, why?
SFV Room 200B: In other words, I will get… I get enough evidence to… that when I rule, it’s not just based on what I think, it’s based on what he said, and what the other guy said. And then you assess all those facts, which is exactly what the court does here. If you look at it, right or wrong, the court goes through an analysis.
SFV Room 200B: prior course of dealings, you know, unreasonable time, this, that, whatever, to make a decision. Make sense?
SFV Room 200B: Very good. So that’s… so then the acceptance occurs to a unilateral contract when it… the performance is done? The full performance, by definition, a unilateral contract can only be accepted by full performance.
SFV Room 200B: So, consideration and acceptance kind of simultaneously take place.
SFV Room 200B: Yes, it depends, you know, it depends, yeah, yeah, of course, yeah. But, you know, your consideration is performing, on your side, you know, that’s what you’re giving up. You didn’t have a legal duty to do that work, but you did.
SFV Room 200B: to get compensated, and his consideration is giving up whatever it is, he’s giving up money or whatever, right? But it makes an irrevocable offer, right? Otherwise, what is the significance of an irrevocable offer? Does anybody know why?
SFV Room 200B: Lung’s not important?
SFV Room 200B: What is the significance of that?
SFV Room 200B: Let’s be to protect.
Suren Abrahamyan: detrimental reliance, you realize.
SFV Room 200B: Yeah, well, it’s to protect the party that is supposed to perform, right? Otherwise, as I said before, what the hell, you just let him do 50% of the work and come and say, I changed my mind?
SFV Room 200B: You haven’t fully performed, so you haven’t accepted. So if you haven’t accepted, you can’t sue me.
SFV Room 200B: Right?
SFV Room 200B: Offer acceptance consideration, that’s contracts. There’s no contract, because you never accept it.
SFV Room 200B: So the court basically set the law to create
SFV Room 200B: this imaginary, somebody on Zoom said, I think correctly, what did you say? Repeat what you said?
Adreanne Kumamoto: Actually, I didn’t… I was…
SFV Room 200B: It was just… What was the gentleman that said… what did you say?
SFV Room 200B: Repeat what you said.
Suren Abrahamyan: mental, detrimental.
SFV Room 200B: detrimental reliance, yeah. I relied on the promise, on the offer, I started performing. It would be unreasonable and unfair for me to get nothing. So the court said, to hell with it. We’re going to create a concept set that basically says it becomes an irrevocable offer.
SFV Room 200B: Hasn’t accepted it yet, but it’s an irrevocable law, right? A case like that, actually, I think, that we read.
SFV Room 200B: Yeah, of course we did, absolutely. Alright, any comments, questions?
Adreanne Kumamoto: Yeah, something you said, you said they have to finish the performance. I thought it was that all you have to do is begin…
Adreanne Kumamoto: the performance.
Adreanne Kumamoto: Like, you don’t have to do it all in order to… as acceptance. Like, you could start, and that is considered implied.
SFV Room 200B: No, ma’am. That’s… we never said that. Not in this class.
SFV Room 200B: No, you have to finish, you have to complete performance before there is an acceptance of a unilateral contract.
SFV Room 200B: Okay? Full performance is the legal definition. Full performance of a unilateral contract constitutes acceptance. That’s your definition. Okay?
SFV Room 200B: Alright. Fujimoto, anybody?
SFV Room 200B: Ma’am, please.
SFV Room 200B: Fujimoto versus Rio Grande Pickle Pro. The plaintiffs, Fujimoto and Bravo were employed by defendants, the Rio Grande Pickle Company. After threatening to quit without an increase in compensation, Rio Grande offered Fujimoto and Bravo contracts that contained a bonus profit-sharing provision, where they were to receive 10% of the company’s annual profits.
SFV Room 200B: The contracts did not specify how Fujimoto and Bravo were to accept them, so they simply signed the contracts and kept them.
SFV Room 200B: Fojimoto and Bravo continued to work for Rio Grande for 14 months until November 30th, 1966.
SFV Room 200B: When Rio Grande failed to pay Fujimoto and Bravo their 10% bonuses, Fujimoto and Bravo brought suit against Rio Grande for a breach of contract. Rio Grande claimed that the contracts had never been accepted because they had not been delivered back to them.
SFV Room 200B: The District Court found that Fujimoto and Bravo had accepted their contracts, and the jury calculated about $8,964.25 in damages. Rio Grande appealed.
SFV Room 200B: The issue is, is an offer considered, accepted when the offeree clearly communicates his intention to accept the offer… to the offer where no mode of acceptance is provided by the offer… by the offer?
SFV Room 200B: The rule is where no mode of acceptance is provided by the offer, and offer is considered acceptance when the offeree clearly communicates his intentions to accept the, to the offerrer.
SFV Room 200B: When the offer fails to provide a prefer… a preferred mode of acceptance, all that is required of the offeree effectively makes it known to the offer that his offer had been accepted. Actual knowledge on the part of the offer that the offer had been accepted is sufficient to form a contract. Here, the contract was offered by Rio Friday to keep Fujimoto and Bravo employed after they threatened to quit without an increasing
SFV Room 200B: compensation. Since the contract did not specify a mode of acceptance, it was not necessary that the contract be returned to Rio Grande. The offer was clearly accepted because Fujimoto and Bravo continued to work for Rio Grande for 14 months after the offer was made. Therefore, because Rio Grande knew that the offer had been accepted, a valid contract was formed, and Fujimoto and Bravo were entitled to their bonuses, judgment affirmed.
SFV Room 200B: Excellent.
SFV Room 200B: one of the better, beliefs I’ve heard. It’s very, very good.
SFV Room 200B: So the offer did not prescribe a medium of acceptance by signing and returning. In other words, if the instrument had said, the only way that this offer can be accepted is if you sign it, return… if you look at my retainer agreements.
SFV Room 200B: It’s crazy.
SFV Room 200B: In my return agreements, page 1, bold print, right on top, says, the only way that I’m going to be employed to do anything for you, the client, is by all of the… accepting all of the following. Number one.
SFV Room 200B: You gotta initial all of the pages, and sign the last page, and, you know, and return this to me by such and such date. Number two, you have to pay the full retainer fee, if I’m asking up front.
SFV Room 200B: By such and such day, in full.
SFV Room 200B: time is of the essence, I also put that in there, and if you haven’t talked about it yet, we will talk about it. And so, essentially, I create a language that they cannot say, you accept it in any other way. And by the way, I don’t take cash.
SFV Room 200B: Because, believe it or not, some clients will lie.
SFV Room 200B: and will come and say, I paid him. I went to his office, I gave him $10,000 cash, and I signed the papers right in front of him.
SFV Room 200B: And… He didn’t do anything. He didn’t show up.
SFV Room 200B: he didn’t sue. Fix that.
SFV Room 200B: People like.
SFV Room 200B: So I’m like, screw it, I don’t want cash.
SFV Room 200B: Do you indicate it in your agreement? Yes, my retainer says we do not accept cash.
SFV Room 200B: Under any circumstance. It has to be a Zelle payment, a wire transfer, a check, or a cashier check. It literally says no other medium of payment is accepted.
SFV Room 200B: That’s it.
SFV Room 200B: And I get them to sign the initial, that paragraph, too. I mean, I’m just a stickler about it, because I’ve seen the worst happen, unfortunately, and I just don’t want to be one of those guys that has to deal with that, right? Now, obviously, that’s not with every case. So, you know, if I have any relationship.
SFV Room 200B: and says, I wanna… I’ll bring you $5,000 this week. I’m not gonna say, no, you can’t do that.
SFV Room 200B: You know, that’s ridiculous. I’ll just tell the staff, take the money, give them a receipt.
SFV Room 200B: No problem, right? It goes to the same account anyway.
SFV Room 200B: Especially if it’s, like, a trust account money. Cash goes right into the trust account, right? Because otherwise, you can just look for being this part.
SFV Room 200B: if the State Bar finds out you did something else with that money.
SFV Room 200B: Okay, so,
SFV Room 200B: Again, the quote says the offer did not prescribe a medium of acceptance by signing and returning the written instrument in question. Therefore, the acceptance could be implied by the implied promise, because he continued to work in front of him for 14 months, and the guy never said, where the hell is the contract? Why did you sign the contract?
SFV Room 200B: Right?
SFV Room 200B: I’m suing a couple of guys, on behalf of a client, just in case you may know any of the parties, I’m going to change the facts a little bit. But my client had two employees, now the employees are
SFV Room 200B: Competing against my client by opening a similar business next door, literally, like, 2 doors down.
SFV Room 200B: But that’s not the only thing. We found out that they stole all of the client information of my client that, yeah, that she had gathered for over 20 years, and they are using it to gain… to get business, right?
SFV Room 200B: So I told my client, non-competition clause that they signed is unenforceable.
SFV Room 200B: In California. Non-compete clauses are basically unenforceable in California. If you get one of those signed, good luck.
SFV Room 200B: What’s a non-compete? Non-compete basically means that, let’s say you and I are at a law firm working together, you know, we’re successful, we’re doing great. You decide you want to go on your own, but you had already previously signed a non-competition
SFV Room 200B: document in the office that says you cannot have an office within 10 miles of this office, and you cannot solicit our former clients, and you cannot do X, Y, and Z. It used to be that this was pretty much enforceable.
SFV Room 200B: No longer.
SFV Room 200B: Because California feels that that basically prevents you from making a living. It’s…
SFV Room 200B: It’s unfair competition that you’re trying to stop all competition.
SFV Room 200B: So… But the other aspect of the contra…
SFV Room 200B: Which my client’s still looking to find their signature.
SFV Room 200B: All the rest of it, hopefully, is enforceable, especially if there’s a language in there that says if part of the contract is unenforceable, all the remaining provisions
SFV Room 200B: will be enforceable, right? So, I’m still looking for that. But my point is.
SFV Room 200B: The contract, all the other provisions.
SFV Room 200B: may allow my client to recover attorney fees, which would be huge in a case like this. Think about it, the attorney fees probably would be 50 to 100 grand by the time we’re done, right?
SFV Room 200B: They want to recover that money back, so I want them to recover the money back, so the investors are looking to find that contract. Yes, ma’am? Okay, opening business is one part, but what about taking client information?
SFV Room 200B: Well, I’m… I’m suing for that. That’s… that’s very different. I’m suing separately for that. That’s… that’s conversion. It’s, 172 business and professions code violations, specifically 17200 of the Business and Professions Code.
SFV Room 200B: But the remedies are limited with those sections, such as injunctions and things. I’m going to stop them from using that list altogether in a heartbeat. But,
SFV Room 200B: But, you know, if he fined the contract.
SFV Room 200B: We may have other provisions that we can enforce and seek attorney fees.
SFV Room 200B: Also civil embezzlement. I’m suing other civil embezzlement. If I can show that there was any embezzlement.
SFV Room 200B: They have to pay attorney fees, in full. And I get terrible damages, so, you know, it could mean that a $200,000 case may be $600,000, $700,000.
SFV Room 200B: I mean, I’m gonna bankrupt the two of them, I’m sure of that. Regardless of whether… no, no kidding. Regardless of whether my client finds that thing or not, these are young individuals, I’m sure they’re going to be bankrupt. But bankruptcy is not going to save them, because if you commit fraud.
SFV Room 200B: Practicing will not save you. They’re gonna have that judgment against them for the rest of their lives, which is what I’m hoping. Right? You gotta punish them. If you steal tax records of clients, which is what they did, tax records.
SFV Room 200B: You know, I was gonna do it for free. I hate that.
SFV Room 200B: Yes. And they stole the client’s information? They stole tax… full tax records of… of, my client’s clients. Oh, client’s clients. Yeah. Yeah. And we know they did, because they were stupid enough to leave traces. So why weren’t… why wasn’t criminal charges just filed then?
SFV Room 200B: My client just filed a police report. Oh, okay. Yeah, she just filed a police report, based on my recommendation. She didn’t think it was actually a crime crime. I’m like, of course it is, are you kidding me? Doesn’t that open the gate to identity theft?
SFV Room 200B: Of course it is. Yes. It absolutely is. Absolutely, 100%. And a whole host of other… If you see the lawsuit, maybe I’ll just put it in our… you know, when this becomes public, because it’s an educational thing for us, it is. I’ll put it on D2L after I talk to my client.
SFV Room 200B: Yeah, because once I serve them, then I will put it on D2L. It’s really educational. You have to see this lawsuit. It’s magical.
SFV Room 200B: No, honestly, because I gotta tell you, civil embezzlement is what I learned during COVID, and I’ve been practicing for 27 years. My clients were sued
SFV Room 200B: And civil embezzlement was one of the causes of action. I’m like, what the hell is this?
SFV Room 200B: This is a criminal statute, and I looked it up.
SFV Room 200B: And the Supreme Court recently, like, during COVID, said, this can be a cause of action in a civil case, and you can recover attorney fees and terrible damages. And I’m like, oh my god, I love this!
SFV Room 200B: And so anybody that crosshairs with me is civil… civil embezzlement, if there is facts to support it. But it’s a phenomenal cause of action.
SFV Room 200B: I mean, you literally can destroy it for bringing that, which happened to my clients, because they did steal big from their old brother, and
SFV Room 200B: The brother sued. I represented the defendants.
SFV Room 200B: Okay, let me take a look at… before we call a break, let me just quickly look at
SFV Room 200B: Who knows what a mailbox rule is?
SFV Room 200B: Sir? It basically means that the statute starts once the
SFV Room 200B: How do I say this? Okay, oh, sorry. You accept once you send out the mail, is what it is. Okay, so you… are you saying that there is a valid acceptance under the mailbox rule at the time of dispatch?
Adreanne Kumamoto: Yes.
SFV Room 200B: Was that correct? Yes. So the mailbox rule, which is a traditional rule, basically says that when you mail your acceptance, there was no fax machine back then when mailbox rule came about, there was literally, maybe not even a mailbox. I guess there was, otherwise they wouldn’t call it a mailbox.
SFV Room 200B: But you would mail your acceptance, right? Nowadays, there are so many means that you would make a phone call, you send a fax, or you send an email, obviously, you know?
SFV Room 200B: No such thing back then. So, the mailbox rule basically says… and you can change that, right? Who can change the provisions of the mailbox rule?
SFV Room 200B: the master of the offer. That’s right, the offeror can say, screw with the mailbox group. Right?
SFV Room 200B: Your offer… my offer is accepted only if it’s in my office by such and such date, right?
SFV Room 200B: My retainer, the one that I joke about all the time, it literally says that the payments shall be negotiated into our account before I become your lawyer.
SFV Room 200B: Meaning, if your check bounces, bye-bye, I’m not your lawyer, I won’t show up in court, good luck to you.
SFV Room 200B: Because that has happened to me, believe it or not.
SFV Room 200B: Swear to God.
SFV Room 200B: They write a check, and I was stupid enough to accept. And then two days later, I’m in criminal court, and the check bounced. I’m like.
SFV Room 200B: Now, what do I do? Tell the judge that you didn’t pay me? No, I’m not gonna do that, that’s stupid.
SFV Room 200B: That’s against ethics, right? I’m not gonna duke it out with my own client. That’s ridiculous.
SFV Room 200B: So now I don’t do that anymore.
SFV Room 200B: In such case, sometimes I do accept cash. You show up in my office.
SFV Room 200B: Today, Ramey Cash, I’ll see you in court tomorrow.
SFV Room 200B: No? To hell with you.
SFV Room 200B: Right?
SFV Room 200B: Okay, so, meld also. Now that I said that, let’s do this case together. What is it? CAN-2 versus Central Education? And then we’ll call a break. Anyone on page 119, sir?
SFV Room 200B: Okay, so Maria Cantu Plaintiff versus San Dimito Consolidated Independent School District, who’s the defendant?
SFV Room 200B: Maria Cantu was under contract to teach special education for the San Benito Consolidated Independent School District during the 1990 and 91 school year.
SFV Room 200B: Shortly before the beginning of the school year, on Saturday, August 18, 1990, Cantu hand-delivered a letter of resignation dated August 17 to her supervisor. In it, Cantu requested that her,
SFV Room 200B: that her final paycheck be sent to an address 50 miles away, the superintendent of schools, who was the sole paycheck, who was the person authorized to accept a resignation?
SFV Room 200B: received Cantu’s resignation on Monday, August 20th.
SFV Room 200B: That same day, he wrote a letter accepting the resignation and deposited it.
SFV Room 200B: properly stamped and addressed in the mail at approximately 5.15pm. On Tuesday, August 21st.
SFV Room 200B: Hantu hand delivered to the superintendent’s office a letter which bore a local return address withdrawing her resignation.
SFV Room 200B: The superintendent then hand-delivered a copy of the letter mailed the previous day, thereby advising Cantu of the acceptance of her resignation and the impossibility of its withdrawal.
SFV Room 200B: Cantu filed a claim for a breach of her employment agreement. The super… the state commissioner of the education ruled that Cantu’s resignation was accepted, and her employment agreement terminated upon the mailing of the superintendent’s letter accepting the resignation.
SFV Room 200B: And then Cantu appealed. And the issue was, is acceptance of an offer effective when mailed, even if the offer didn’t explicitly authorize acceptance by mail?
SFV Room 200B: And the rule was an acceptance by any medium reasonable under the circumstances is effective on dispatch absent a contrary indication in the offer.
SFV Room 200B: And the mailbox rule provides that a properly addressed letter accepting an offer becomes effective when deposited in the mailbox, unless an alternative method of acceptance is otherwise required.
SFV Room 200B: The fact that an offer is given by a particular method does not imply that the offer must be accepted by the same method.
SFV Room 200B: Here, Cantu’s letter of resignation did not specify any particular means of acceptance.
SFV Room 200B: Because…
SFV Room 200B: Because the address designated for her final paycheck was not local, and given the time constraints imposed by the proximity to the start of the new school year, it was reasonable for the superintendent to accept her resignation by letter deposited in the mail.
SFV Room 200B: The superintendent’s letter was properly addressed and deposited prior to
SFV Room 200B: Cantu’s attempt to withdraw her resignation. Consequently, Cantu’s employment contract was effectively terminated.
SFV Room 200B: And her suit for breach of contract is without merit and judgment affirmed. Thank you very much.
SFV Room 200B: Does she hate herself? For, you know, you… yeah. It’s… I’ve always waited for one of my employees to do exactly that. Just one of them.
SFV Room 200B: Just say, I accept, get out! Never happened.
SFV Room 200B: She’s still there.
SFV Room 200B: Okay, so the court says on… that was perfect. The court on page 120 on the discussion says, the sole legal question presented for our view is the proper scope of the mailbox rule.
SFV Room 200B: And then the court goes on to say the real issue down here, it’s, bottom of page 120, the question presented is whether authorized… authorization to accept by mail may be implied only when the offer is delivered by mail, but also when the existing circumstances make it reasonable for the offeree to so accept. In other words.
SFV Room 200B: She delivered, but they mailed it.
SFV Room 200B: And the court says, is that reasonable? And they say, under the mailbox rule, yeah, it is, she’s pretty far. And they said, I guess they couldn’t get, you know, they couldn’t wait one minute to get rid of her, right? Because the same day.
SFV Room 200B: Email the acceptance, right? The same day.
SFV Room 200B: Now, what happens if we, send the acceptance A month later.
SFV Room 200B: And… she would have come back 3 days later and say, I don’t want to resign anymore.
SFV Room 200B: What would happen?
SFV Room 200B: Who has the magic answer?
SFV Room 200B: Did you get the question? She… she gives… she hands the revocate… the, resignation to the school.
SFV Room 200B: The school responds a month later, but 3-4 days after, she had
SFV Room 200B: resigned, she comes back and says, I want my job back.
SFV Room 200B: What would the result be?
SFV Room 200B: The judgment would be in favor of Khadu. Why? Because they’re…
SFV Room 200B: They haven’t accepted a resignation yet.
SFV Room 200B: She is withdrawing her offer. She’s withdrawing her offer. Very, very good. So, if the acceptance was not timely, also, that may work in favor of
SFV Room 200B: the, the person that was attempting to resign. You just said, I was gonna say, wouldn’t a month, like, time to consider a resignation not be deemed unreasonable? Unreasonable. That’s why I purposefully went, you know… I mean, she comes back to school, she talks to them, but maybe she didn’t reach out to the
SFV Room 200B: This guy, who was the only person that could accept
SFV Room 200B: the offers. The question is, if he sits on it for a month, would that be reasonable? Probably not.
SFV Room 200B: So, promptness is also key.
SFV Room 200B: Right? Mailbox rule by itself is not sufficient to always save you.
SFV Room 200B: It’s… it’s being prompt also important, right? Reasonable time to respond.
SFV Room 200B: The rule, I believe the reasoning is on the first full paragraph on page 121.
SFV Room 200B: The court says, as Professor Corbyn knows, by the way, Professor Corbyn, if you probably don’t know, you know now.
SFV Room 200B: is a big shot. You’ll see Professor Korsbin’s reasoning in many Court of Appeal decisions.
SFV Room 200B: First of all, he notes, courts could adopt a rule that no acceptance is effective until received.
SFV Room 200B: Just like what the offerer can do.
SFV Room 200B: Absent express authorization by the offor. However, the mailbox rule, which makes acceptance effective on dispatch.
SFV Room 200B: Closes the deal and enables performance more promptly. That’s the reasoning for why there is a mailbox room to begin with, which I don’t like much, to be honest. I think until you communicate to the other party.
SFV Room 200B: Your acceptance should be of no acceptance. That’s what I… but nevertheless, what I think nobody cares. Like, my brother always says.
SFV Room 200B: You know, when there’s a law, I’m like, oh, they just passed a law about whatever. And he says, in my opinion, they cannot do that. I’m like, nobody cares about your opinion, you’re a therapist. Who cares what your opinion is? At least, at least I’m a lawyer. Maybe they care this much, but no, you’re a therapist. Just opine about your crazy people.
SFV Room 200B: Okay, so, closes the deal and enables performance more promptly and places, the risk of inconvenience
SFV Room 200B: on the party who originally had the power to control the manner of acceptance. This part does make sense, doesn’t it? It says the offeror may be inconvenienced, but the offeror can change that.
SFV Room 200B: can change the mailbox rule, and say acceptance, just like my retainer says. The acceptance is solely if you do XYZ. If you don’t do all this stuff, I don’t care that you put in the mailbox. It’s useless.
SFV Room 200B: It’s not an acceptance, okay?
SFV Room 200B: And then, then the rule is, in short, the court says, in short, the acceptance by mail is impliedly authorized if reasonable, under the circumstances. That’s what we… the takeaway, is that a mailbox rule can be…
SFV Room 200B: Enforced, even if the other party is literally communicating even in person.
SFV Room 200B: If it is reasonable. In other words, the courts are trying to say what? The traditional view, that it has to be A or B is now out the door. It’s what’s reasonable.
SFV Room 200B: Right? Certainly. For case-specific reason, when it says reasonable circumstances in regards to the mailbox role, would that be, like.
SFV Room 200B: physically, like, you know, mailing it out on time, like, it arriving, even if, like, the other person doesn’t see the mail? Is that what a… Yeah, the other person doesn’t have to see it. Mailbox rule basically says that… and you will see that what happens
SFV Room 200B: if… if the revocation is mailed first, or received first, we’re going to talk about all that later, but… but as a general rule, once you dispatch the acceptance, there is a valid acceptance.
SFV Room 200B: Okay?
SFV Room 200B: And, alright. And the restatement agrees. The court says.
SFV Room 200B: Second full paragraph on page 121, the court says the restatement approves the… and adopts this approach, and acceptance by any medium
SFV Room 200B: Reasonable under the circumstances is effective on dispatch, absent a contrary indication in the offer. Please state me second Section 30?
Adreanne Kumamoto: That, I will put in my notes.
SFV Room 200B: That, I will put that language in my notes, that under the restatement second, and you don’t have to say restatement second, but you can say the modern approach is that reasonable means of acceptance, whatever that may be, is accepted.
SFV Room 200B: Unless the offeror states otherwise, right?
SFV Room 200B: There you go. Any questions before we take a break?
SFV Room 200B: The non-compete, is that also time-strained as well? Like… The non-compete, basically, in many states, as I understand it, I haven’t litigated it yet, because I researched it recently. In many states, yes, it’s restrained as to time and duration and location.
SFV Room 200B: But in California, as I understood it, again, I may be wrong, but as I understood it, it’s just non-enforceable. For the most part. Like, it’s… no matter what, no matter if it’s 5 days.
SFV Room 200B: It’s just, California basically has this approach of saying, no thank you, to non-compete clauses. Yes, sir. How about for, like, special circumstances? If the mail gets lost,
SFV Room 200B: in transit, would the mail company be liable? No, mail company… I don’t want to say mail company would be liable, but we’re going to talk about the… all the circumstances at the right time. We’re going to talk about everything that happens in between.
SFV Room 200B: Like, what happens if the acceptance was never received? What happens is, if you dispatch the acceptance, it never gets to the offeror, and the offeror has already sent a revocation.
SFV Room 200B: In all those circumstances, we’re going to talk about all that. Soon.
SFV Room 200B: All right, it’s 7.45, sharp, let’s take a break to 8 o’clock. Sharp, please be back at 8. There’s a lot to park. Thank you.
Adreanne Kumamoto: Professor, this is Adrienne Kumamoto. You said something earlier, and I just want to make sure I understand you properly.
Adreanne Kumamoto: Did you say, when we have a bilateral contract, if they don’t complete performance, you don’t have acceptance, or offering acceptance? Did you say that?
SFV Room 200B: I’ve never even discussed bilateral contract. We’re talking about a unilateral contract.
SFV Room 200B: And what I said was about… Well, unilateral… Okay. I don’t know what you wrote, but I’m talking about a unilateral contract, which is…
SFV Room 200B: That if you start performance in a unilateral contract, you create an irrevocable offer. And full performance is the only way to accept.
SFV Room 200B: Are we good?
Adreanne Kumamoto: Full performance is the only way of acceptance of a unilateral contract?
Adreanne Kumamoto: Is that what you’re saying?
SFV Room 200B: Say that again, ma’am?
Adreanne Kumamoto: You said, full performance is the only way I’m sad.
SFV Room 200B: contract.
Adreanne Kumamoto: acceptance of a unilateral contract. So you’re saying, if it is a unilateral, which means it’s for performance, if you don’t complete that performance, then I don’t have offer and acceptance?
SFV Room 200B: Yes, you don’t have proper acceptance, correct.
Adreanne Kumamoto: I’m having a hard time with that, Professor, because, like.
SFV Room 200B: Is this…
Adreanne Kumamoto: And if you mailed that.
SFV Room 200B: Okay? Go back and watch the lectures.
Adreanne Kumamoto: respect.
Adreanne Kumamoto: I’ve watched a lecture, I haven’t missed them, and I’ve also read the chapter, right? And I’ve also read the cases. So, I don’t need to rewatch it, I need a little bit more clarity in this moment.
SFV Room 200B: So, I would say go back to the horn book if you’re still having difficulty.
Adreanne Kumamoto: Lauren books at the beginning of it, so I’ll go back and I’ll look.
SFV Room 200B: Please.
Adreanne Kumamoto: Offering acceptance was mutual assent.
Adreanne Kumamoto: And once we have mutual assent, right, and we agree, that’s when you have offer and acceptance. Like, I don’t understand why they gotta go out and do the whole job in order for it to be offer and acceptance, because that’s why people get sued. Because they don’t complete the job.
SFV Room 200B: That is the law. For a unilateral contract, that’s the law. Whether we like it or not, it is what it is.
Adreanne Kumamoto: Okay.
SFV Room 200B: Alright. I’ll go back and try to find that in the horn book.
SFV Room 200B: And go to the Horn Book. Your answer is right there. If you can’t find it in the textbook, look at the Horn Book. And if you can’t find it in the lectures, definitely look at the Hornbook, because I’ve covered it several times.
SFV Room 200B: It’s a huge lawsuit. For example, like, he got a bank account on us, like, your wife knows about all five of them, and everyone changes with aging. I feel it already.
SFV Room 200B: Whenever you’re married, you’re not gonna be like, oh, I’m gonna get… whenever you’re married, you’re not saying, oh, you can’t say, oh, I’m not gonna get divorced. Yeah, there’s even a chance. There’s a chance. I think almost everybody’s bad.
SFV Room 200B: Want to make that class? It’s 100% future.
SFV Room 200B: They’re having too much fun with community property. I scared them, I scared them. No, no, Professor Zion is good. I don’t think I’ve ever had these many students in 11 years, ever.
SFV Room 200B: We have bus, you know.
SFV Room 200B: I’ve had 46, but not very low. 61… Yeah. That’s just… okay. If I can have everybody’s attention, please. Eddie.
SFV Room 200B: You have to pay 100, 104 per year.
SFV Room 200B: at ease.
SFV Room 200B: Alright, before we start talking about this case, SWIFT, Not Taylor Swift.
SFV Room 200B: Please not. I want to give a little bit of a lecture, also because during break, there was a question that was raised by one of our fellow students regarding your NATO contracts, and how you accept a neonatal contract, all that stuff. I thought it’s,
SFV Room 200B: Robert Nazarian, you are… your face is not on camera, and I just got a message that they are marking you absent.
SFV Room 200B: Alright, let me just… let me just tell them not to do that.
SFV Room 200B: I’m so confused here.
SFV Room 200B: is here, but his face was not showing, and I… they just popped a message that you’re marking him absent.
SFV Room 200B: Alright, that’s not gonna happen, don’t worry. I got you.
SFV Room 200B: Before we talk about this termination of revocable offers.
SFV Room 200B: I want to give a little bit of a lecture again about some of the stuff that we did talk about, and some of the stuff that I think is related to this
SFV Room 200B: termination of revocable offers. We did say, if you recall, that,
SFV Room 200B: How do you, basically, we talked about gap fillers, and we set the… did the offeree that basically supposedly accepted the offer, did the offeree receive and understand the offer?
SFV Room 200B: Right?
SFV Room 200B: The next question that you should ask yourself is, is the offer capable of being terminated?
SFV Room 200B: Can an offer be terminated? You make an offer, can you terminate the offer?
SFV Room 200B: And we said there are several ways. One of them is an option contract.
SFV Room 200B: an option contract.
SFV Room 200B: makes the offer irrevocable, right? Because you have an option, you can exercise the option. The other way was a merchant firm offer, and we talked about the merchant firm offer, and I mentioned 2-205, which is in the back of the book, if you want to go read it again.
SFV Room 200B: The third way was the offer for a unilateral contract with a start of performance, and I want to talk about this because question came during the break when most of you were not in class, and I think it’s only fair that we talk about it again, just a little bit.
SFV Room 200B: And, so the offer to a unilateral contract. What is a unilateral contract?
SFV Room 200B: for Unreal offer, Yes, ma’am. It’s… you narrow offer is for what? Acceptance?
Adreanne Kumamoto: Performance.
SFV Room 200B: return full performance. Full performance. Only full performance is a proper acceptance for a unilateral offer. But what happens if you start performance?
SFV Room 200B: That also creates an irrevocable contract for a reasonable time. Yeah, based on the concept of reliance, correct.
SFV Room 200B: And of course, finally, we talked about, or maybe we didn’t talk about, promissory stop.
SFV Room 200B: From Gustavo, I’m going to talk about that right now.
SFV Room 200B: So, let me talk about this offer for a unilateral contract with the start of performance, give you a definition. An offer
SFV Room 200B: To a unilateral contract.
SFV Room 200B: An offer to a unilateral contract, meaning a contract that seeks your performance, not your return promise.
SFV Room 200B: An offer to a unilateral contract will become irrevocable
SFV Room 200B: Will become irrevocable for a reasonable period of time.
SFV Room 200B: Upon the beginning of performance.
SFV Room 200B: by the offeree.
SFV Room 200B: An offer to a unilateral contract will become irrevocable.
SFV Room 200B: for a reasonable period of time upon the beginning of performance by the offeree. So, my offer to you is, if you come to my home and paint my entire 30,000 square feet home… I’m joking, I don’t have…
SFV Room 200B: That’s a… that’s a dream. I don’t have that dream, but some people. I’m only saying 30,000 because I want to imply that it’s going to take a while. It’s not going to be 5 minutes, right?
SFV Room 200B: If you come to my home and paint my home, the outside of my home, which is 30,000 square feet, I will pay you $10,000.
SFV Room 200B: I haven’t asked for your return promise. I said, if you come.
SFV Room 200B: and paint, I will pay you. Which means that my offer is to a unilateral contract. It’s a unilateral offer. I’m only asking for your performance. The only way you can accept that offer, I repeat, in case there is any confusion.
SFV Room 200B: It’s by full performance.
SFV Room 200B: full performance. Even if you finish 90%, you haven’t accepted.
SFV Room 200B: Because my offer, I’m a master of the offer, is full performance. You gotta finish the job.
SFV Room 200B: But if you start the performance, as we just mentioned, the offer that I had just put on the table becomes irrevocable, but only for a reasonable time. And somebody asked me, what is reasonable? And I said, it really depends on the circumstances, right?
SFV Room 200B: Would it be reasonable that the painter can come and paint in 5 years? No, I don’t think so.
SFV Room 200B: But if he starts performing, is it reasonable that a 30,000 square feet home, painting the entire outside might take 2 weeks, maybe 3 weeks? Sure. I think most people would say, yeah, that’s even more than that is reasonable, right? It’s a lot of square foot to cover.
SFV Room 200B: Right? So, another way that an offer becomes
SFV Room 200B: Irrevocable is a unaro contract with the start of performance.
SFV Room 200B: Finally, if I had not mentioned, I will mention now. If all else fails, if you have no more arguments.
SFV Room 200B: Try promissory stop.
SFV Room 200B: Promise to stop. If you cannot enforce the term of a contract.
SFV Room 200B: You ask for a promissory stop. You basically say, Your Honor, fairness, fairness, justice, come on. It’s not fair that I did all this work, and I don’t get paid.
SFV Room 200B: Promise Aristopo.
SFV Room 200B: These are the elements of Promiser’s dopel that I’m about to give you.
SFV Room 200B: If you miss an element, I will… Joe, you can’t miss an element. Yes, KIL. You can’t miss an element, as I said before. Legal definitions are not subject to interpretations
SFV Room 200B: are interpretations. Legal definitions are black-letter law. You can’t get it wrong. You can’t.
SFV Room 200B: Okay?
SFV Room 200B: It’s like, murder is the what? It’s the killing of a human being by another human being with malice of forethought.
SFV Room 200B: You can’t say murder is killing a human being by another human being.
SFV Room 200B: That’s a wrong definition, you get an F.
SFV Room 200B: You really do. Because you know, and I know, that I can kill a human being, and it may just be an accident.
SFV Room 200B: Right?
SFV Room 200B: accident, I didn’t see the guy, and I’m doing 35 on a 35 zone. The guy runs in front of me, and I kill him.
SFV Room 200B: That doesn’t mean I committed murder, so if you give me that definition, I’ll give you an F.
SFV Room 200B: Fair? Same with contracts, though. You don’t get to make up your own definition.
SFV Room 200B: So I will slow down, give you the definition, and I expect everybody that if you say, Professor, you said this and you said that, you better be right. Otherwise, don’t say you said it.
SFV Room 200B: Because I know I didn’t.
SFV Room 200B: Fair?
SFV Room 200B: Okay.
SFV Room 200B: Promise to stop.
SFV Room 200B: Element number one. Was a promise made?
SFV Room 200B: In order to enforce a promissory stoppel, force somebody to
SFV Room 200B: pay you under the theory of promise to estoppel, or hold somebody responsible or liable under the theory of promise to estoppel, you gotta… you gotta prove the following elements. Number one was a promise made.
SFV Room 200B: Number two, Was it foreseeable that the promisee would rely on this promise?
SFV Room 200B: Was it foreseeable to the promisor, basically, that the promisee would rely on this promise?
SFV Room 200B: Number 3.
SFV Room 200B: Can you repeat that one? Yes, sir.
SFV Room 200B: Number one, was a promise made?
SFV Room 200B: Number two, and I’ll explain it, just be with me. Number two, was it foreseeable?
SFV Room 200B: That a promisee would rely on that promise.
SFV Room 200B: Number 3.
SFV Room 200B: Did the promisee, in fact, rely on this promise?
SFV Room 200B: But on that promise.
SFV Room 200B: Did the promisee, in fact, rely on that promise.
SFV Room 200B: Number four, And finally, has the promisee suffered the detriment by the reliant?
SFV Room 200B: Has that pharmacy suffered a detriment by the Fronts.
SFV Room 200B: Example.
SFV Room 200B: It’s a true example.
SFV Room 200B: A friend of mine finds a,
SFV Room 200B: car that he wanted to purchase, but it was… I think it was near San Jose.
SFV Room 200B: He talks to the dealer, On the phone, gets them to agree to a price, they agree.
SFV Room 200B: He drives all the way to San Jose.
SFV Room 200B: He got the car, but I want to change the facts and say.
SFV Room 200B: he goes to San Jose at a great expense, and he just… he rents a room and, you know, all that stuff, and…
SFV Room 200B: Stays the night, goes the next day to the dealer, and the dealer says, oops, we sold the car. Sorry.
SFV Room 200B: Does he have a potential cause of action or promissory stop?
SFV Room 200B: Was that a promise made?
SFV Room 200B: Sure, there was a promise made under the facts I gave you.
SFV Room 200B: Was it reasonable or foreseeable
SFV Room 200B: for the dealer to think that the promisee, they’re the promissar, right? That the promisee would rely on the promise. Absolutely, because he just told them, I’m gonna… I’m on the next flight to you guys, hold on to the car, and they said, yes, sir, you got it.
SFV Room 200B: I’m coming from Los Angeles, I intend to drive the car… all too fast or true, by the way. I intend to drive the car from San Jose back to Los Angeles.
SFV Room 200B: They say, okay, done.
SFV Room 200B: So…
SFV Room 200B: Was it foreseeable for the promisor that he would rely on the promise? Absolutely. Under these facts, sure. Number three, did the promise, he in fact, rely on the promise? Yeah, he did, because he rented a hotel, he rent… he got a flight, he flew all the way to San Jose, of course. Otherwise, why would he?
SFV Room 200B: Right? Now, this reliance, ladies and gentlemen, has to be a reasonable reliance.
SFV Room 200B: Always think, was it reasonable?
SFV Room 200B: Right? If he was… if they said, look, we cannot… we cannot guarantee the car will be here. You may show up, the car may be gone, okay? Sorry, you have to put a deposit. And he says, I’m gonna go there and the car is gonna be there. Well, that’s an unreasonable reliance.
SFV Room 200B: Right? I think most of us would say, well, you’re an idiot.
SFV Room 200B: Shouldn’t have done that. You could have created an option contract.
SFV Room 200B: Here’s $100, deposit into your account, sir. You hold off on selling the car for one day, albeit.
SFV Room 200B: You have just created an option contract, haven’t you?
SFV Room 200B: So that would be an unreasonable reliance. We’re talking about, did the promisee, in fact, reasonably rely upon this promise? And number four, did he suffer
SFV Room 200B: A detriment, a legal detriment.
SFV Room 200B: Because of this reliance. Sure, if he, you know, got off from his work and, paid for a flight, paid for the hotel, because they said, we promised to keep the car for you, and he shows up and the car is gone, yeah, he has a detriment. It may be $5, but still something.
SFV Room 200B: Right? Could he sue for detrimental reliance? Yes, he could, even though he probably cannot sue for breach of contract.
SFV Room 200B: By the way, we will find out next semester why he cannot sue for a breach of contract.
SFV Room 200B: Even if they said the card is yours, it doesn’t mean Jack.
SFV Room 200B: It means nothing.
SFV Room 200B: Because of something that… Statute of fraud? I’m sorry? Statute of Frauds? Statue of Frauds, very good, yes, sir. So this is basically just, like, a remedy, if you can’t… Yes, it is a… yes, absolutely. It is a… it is a… actually, that was a perfect observation.
SFV Room 200B: It is a remedy where all the other remedies are unavailable. Otherwise, it would be what? Unjust enrichment. It would be unfair. So the court will step in and say, if you knew
SFV Room 200B: That somebody’s gonna rely on your promise.
SFV Room 200B: Right? And they did, in fact, rely on the promise, and they suffered a loss.
SFV Room 200B: We’re going to hold you responsible. You can’t do that to people. Yes, sir? Can we add reasonably to number 3? You can add reasonable if you want to. It’s not part of the definition, but I tell you, it is 100% something you can add to the definition, sure. Because any reliance has any reliance, gotta be reasonable.
SFV Room 200B: Right?
SFV Room 200B: In our ordinary course of dealings, we only look for reasonable reliance, right?
SFV Room 200B: I rely on, if I call 911 right now, we have an emergency, that the police would hopefully show up in the next 10 minutes.
SFV Room 200B: That’s regional.
SFV Room 200B: It would be unreasonable to think that if I call 911, they have to be in 20 seconds.
SFV Room 200B: That’s unreasonable. I think everybody would say that’s unreasonable. So, reasonable reliance means reasonable reliance. It’s not part of the definition, but you certainly can add it. That’s why I mentioned it.
SFV Room 200B: Okay? So, that prompts to stop. Now, what we’re going to talk about now is termination of revocable offers, and we want to find out what are the ways that an offer that is otherwise on the table
SFV Room 200B: could be revoked.
SFV Room 200B: There are many ways that an offer can actually be revoked. What are…
SFV Room 200B: And here’s the, ways. Number one, Death.
SFV Room 200B: Death of the offerer permanence the offer, automatically.
SFV Room 200B: This is for unilateral and bilateral. Any offer. If the offerer makes an offer and then he drops dead.
SFV Room 200B: The author dies with him, or hers.
SFV Room 200B: It becomes void, right?
SFV Room 200B: Yeah, well, yeah, it does. In other words, it’s gone. Yeah, it’s unenforceable. Yes. So, if the offer is also, like, a gift or something, does that still… I’ll get to that. Yeah, I’ll get to that.
SFV Room 200B: So, death of the offeror will automatically terminate the decedent’s revocable offer. Now, what if the offer was irrevocable?
SFV Room 200B: It doesn’t die. It was irrevocable, but we’re talking about revocable offers. How can a revocable offer terminate? One of them is the death of the offer owner.
SFV Room 200B: Number two is insanity of the offer all.
SFV Room 200B: Insanity of the overall.
SFV Room 200B: Insanity of the off-road may terminate, They’re revocable offer.
SFV Room 200B: The majority rule, ladies and gentlemen, He’s just like the death.
SFV Room 200B: It’s automatic.
SFV Room 200B: As soon as the guy goes insane, the offeror, his offer dies whether you know about it or not.
SFV Room 200B: But the minority rule, which is, I believe, the suitcase.
SFV Room 200B: Says, the offer terminates when the offeree knows or should have known of the offeror’s insanity.
SFV Room 200B: Again, with regards to insanity, the majority rule is that the offer dies when the offeror goes insane.
SFV Room 200B: the minority rule, which I believe is the
SFV Room 200B: 1971 case from New Jersey.
SFV Room 200B: It’s the… follows the minority view that the offeree
SFV Room 200B: The offer terminates when the offeree knows, or should have known.
SFV Room 200B: Yes? In my analysis for that, I wrote, The ruling was that they…
SFV Room 200B: the continuing guarantee must still go on, even if one party is unaware of the other party’s incompetency. Right. Correct. No, no, that’s… sounds about right. In this… the question under the minority of jurisdictions is.
SFV Room 200B: Did you operate new, or should he have known?
SFV Room 200B: Right? Because the question of insanity is not out there. The facts will tell you that the guy, you know, was basically insane.
SFV Room 200B: Right?
SFV Room 200B: And the question under the minority of jurisdictions is, did the offering know or should have known?
SFV Room 200B: But in a majority view, Right? It doesn’t matter. The moment the guy becomes insane, his offer dies.
SFV Room 200B: with his brain.
SFV Room 200B: Another way that a… I’m sorry, knows or should’ve known. Known or should’ve known.
SFV Room 200B: offer terminates when the offeree knows or should have known of the offeror’s insanity.
SFV Room 200B: That’s the clear definition for a minority of jurisdictions.
SFV Room 200B: Which is the SWIFT case.
SFV Room 200B: Now, another way that a… Revocable offer can terminate is time!
SFV Room 200B: Fine! You’ve been talking about it the whole night.
SFV Room 200B: Reasonable time.
SFV Room 200B: The offer… excuse me, strike that. An offer is opened
SFV Room 200B: For either the time specified by the offeror.
SFV Room 200B: An offer is open for either the time specified by the offer, or…
SFV Room 200B: Or, if none is stated for a reasonable period of time.
SFV Room 200B: This was number 3, correct? Yes, number 3.
SFV Room 200B: time. An offer is open for either the time specified by the offer ruler.
SFV Room 200B: Or if none is stated, then for a reasonable period of time.
SFV Room 200B: We are negotiating face-to-face over the sale and purchase of my book.
SFV Room 200B: I offer you this book for… I don’t know how much they are, I didn’t pay for it. $200, okay? I offer this book to you for $200.
SFV Room 200B: That’s all I said.
SFV Room 200B: Clearly, while we are in the room.
SFV Room 200B: For the next hour or two.
SFV Room 200B: You have the right to say, I accept.
SFV Room 200B: Unless I revoke that by making a statement to the contrary.
SFV Room 200B: Right? Or indirectly, offer it to someone else.
SFV Room 200B: Right? And you hear about it. Now you know that the offer is no longer on the table. You knew or should have known. But it’s a reasonable time. You can’t come back two semesters from today and say, Professor, by the way, I accept your offer, especially because the books are no longer in print, it’s worked out.
SFV Room 200B: Right? So, reasonable time. It’s… I think we’ve beat that to death.
SFV Room 200B: Another way that an irrevocable offer… excuse me, a revocable offer can terminate is by illegality.
SFV Room 200B: illegality.
SFV Room 200B: What does that mean?
SFV Room 200B: If the subject matter of the offer becomes illegal.
SFV Room 200B: If the subject matter of the offer becomes illegal after the offer was made, But prior to acceptance.
SFV Room 200B: Then the offer will terminate by illegality.
SFV Room 200B: If the subject matter of the offer becomes illegal after the offer was made, But prior to the acceptance.
SFV Room 200B: Then the offer will be terminated by illegality.
SFV Room 200B: Prime example.
SFV Room 200B: we enter into a purchase and sale contract, I’m gonna buy, 1,000 bottles of Don Julio tequila from you to sell at my store.
SFV Room 200B: I have just made that offer to you, or you have made the offer to sell to me, and just before I’m about to accept, the state passes a law that says…
SFV Room 200B: Purchase and sale of… and consumption of alcohol in the state of California is illegal.
SFV Room 200B: Now, you can challenge that in court, but the offer is dead.
SFV Room 200B: Because subsequent to making the offer, and before acceptance, the subject matter, which is the purchase and sale of alcohol, became
SFV Room 200B: illegal.
SFV Room 200B: Right? So the offer basically is terminated by operation of law.
SFV Room 200B: Are we clear?
SFV Room 200B: Can you say it one last time? Yes, sir, I can, absolutely.
SFV Room 200B: If the subject matter of the offer becomes illegal, After the offer was made, But prior to the acceptance.
SFV Room 200B: Then the offer will become… Will be, excuse me, the offer will be terminated by illegality.
SFV Room 200B: Okay?
SFV Room 200B: Now, what about revoking the offer?
SFV Room 200B: Who gets to revoke the offer?
SFV Room 200B: Awesome.
Adreanne Kumamoto: Earth?
SFV Room 200B: Sister of the offer. Yeah, the offeror.
SFV Room 200B: Revocation is the termination of the offer by the offer. That’s your definition.
SFV Room 200B: Yes, it doesn’t have to be before they accept. Yeah, of course! You can only revoke before anybody accepts the offer.
SFV Room 200B: Absolutely. Revocation is the termination of the offer by the offeror.
SFV Room 200B: Well, clearly, if there’s an acceptance, you no longer can revoke the offer because it’s already been accepted. Just like what we said.
SFV Room 200B: A unilateral offer, right, that seeks performance, the moment you start, it becomes irrevocable.
SFV Room 200B: This is actually worse, because they have already accepted, fully. So you can’t revoke after an acceptance. But just before acceptance, you can revoke your own offer.
SFV Room 200B: What’s a rejection?
SFV Room 200B: Rejection is a termination of the offer by the offeree.
SFV Room 200B: Rejection is the termination of the offer by the offeree. When we’re talking about termination, we’re talking about killing the offer.
SFV Room 200B: Terminator! It reminds me of the Arnold Schwarzenegger movie, Terminator.
SFV Room 200B: Right? He terminated people. You see what I mean? I mean, just keep that in the back of your mind. When we’re talking about termination, we’re not talking about half-assed, dead, tomorrow, you know, or I told you, if it’s terminated, you have to revive it, otherwise it’s dead for all purposes.
SFV Room 200B: So rejection is the termination of the offer by the offeree.
SFV Room 200B: You make an offer to the offeree, the offeree says, I reject.
SFV Room 200B: Which is my favorite word of all time.
SFV Room 200B: I always write back to a justice, rejected, and I write nothing back. It pisses them off. Rejected with a… that’s it, that’s all, I send it back.
SFV Room 200B: And they’re like, what the hell, what? Make a camera offer, do something. Rejected.
SFV Room 200B: That’s… that’s the answer I give. It works. Try it.
SFV Room 200B: Okay.
SFV Room 200B: Acceptance, we said, is the assent in terms of the offer.
SFV Room 200B: in the proper form. We did… we already talked about this, right? And we all talked about 2-47 and all that stuff.
SFV Room 200B: Any questions in class or on Zoom before we hit the book again?
Daniel Toukhlandjian: Yes, Professor, I have a quick question, sorry.
SFV Room 200B: That’s true.
Daniel Toukhlandjian: You said if the subject matter of the offer becomes illegal.
Daniel Toukhlandjian: After an offer, so that… that was a definition, or was that the fourth…
SFV Room 200B: No, that was the definition that I gave.
Daniel Toukhlandjian: A definition of what, I’m sorry.
SFV Room 200B: reality.
Daniel Toukhlandjian: One more time?
SFV Room 200B: illegality.
SFV Room 200B: It’s against the law. There are… I said, if the offer was not irrevocable, in other words, it’s a revocable offer.
SFV Room 200B: The offer can be terminated in several ways.
SFV Room 200B: That’s what I said. Number one is death, death of the offeror.
SFV Room 200B: Right? Number two was insanity, and we said there are two schools of thought when it comes to insanity. The majority rule, that basically says, once the offeror goes insane, the offer is gone.
SFV Room 200B: Right? It’s terminated. But the minority rule, which is the SWIFT case on page 123, says.
SFV Room 200B: That if the offeror loses his mind, the offer is still alive and good to go unless the offeree knew or should have known of the condition.
SFV Room 200B: Then we set time, reasonable time.
SFV Room 200B: The offer is only good for the time stated, or if no time is stated, for a reasonable time.
SFV Room 200B: And I gave the example of selling my book.
SFV Room 200B: For a fellow classmate.
SFV Room 200B: Yes. Are option contracts also irrevocable? Option contracts are irrevocable. That’s correct. Because you’ve now created an option, right? You’ve bought an option. And the example that I gave is that if you get into a lease, especially commercial lease.
SFV Room 200B: If you look at the commercial lease, usually there is an option contract that goes with it. So, you’re leasing for, let’s say, 5 years, and then the… hopefully the tenant, if the agent is smart.
SFV Room 200B: tells his client, dude, negotiate an option right now, because what if your business becomes successful? The landlord will say, I don’t want to rent to you anymore, have a nice day after 5 years.
SFV Room 200B: Right? To jack up the price. But if you negotiate an option, you have the right to exercise that option at a later point. It’s an irrevocable offer, because you paid for the option, right? There was consideration, okay?
SFV Room 200B: I said, A, number one, death, number two, insanity, number three, time. Number four, illegality.
SFV Room 200B: Right? Illegality. And what I said was.
SFV Room 200B: Once the offerer makes an offer, the subject matter of the offer becomes illegal.
SFV Room 200B: The offer is automatically terminated.
SFV Room 200B: Talk about weed. Right now, I think the sale and distribution of weed under certain rules and regulations is legal in California. If they pass a law tomorrow that says it is now illegal, and somebody already has an offer out there, that offer terminates automatically.
SFV Room 200B: Because now the subject… obviously, there’s a… there is a… Logical, commonsensical reason behind it.
SFV Room 200B: They don’t want you to go sue the offeror for something that is illegal, and say you have to enforce it, right? You have to follow with your promise, even though the law says you can’t do it. Well, it makes no sense.
SFV Room 200B: And the final two ways that an offer, a revocable offer, can be terminated is by revocation, by the offeror, or rejection by the offeree.
SFV Room 200B: Cool. These are all you need to know about how a otherwise revocable offer can be terminated.
SFV Room 200B: I hope you’ve got all that, yes. For promissory stoppel, the four elements you gave, what’s, like, the, I guess, like, whole sentence definition?
SFV Room 200B: I don’t have a whole sentence definition, but I can come up with one. I would say that if the promisor made a promise.
SFV Room 200B: That he foresaw?
SFV Room 200B: That the promisee would rely on?
SFV Room 200B: And the promisee did, in fact, rely on that promise.
SFV Room 200B: To his detriment, I promise seen as a cause of action for detrimental relatives.
SFV Room 200B: So I literally just combined all those
SFV Room 200B: elements together. If the promisor made a promise that the promisor knew or foresaw, Or should have foresaw.
SFV Room 200B: That the promisee would reasonably rely on, and the promisee did, in fact, reasonably rely on. To his detriment, the promisor may be held liable.
SFV Room 200B: Under the theory of promissory stop.
SFV Room 200B: Not so hard.
SFV Room 200B: Right? Makes sense.
SFV Room 200B: Yes, sir? Does counteroffer also count as a termination? Counter-offer under the… yeah, a counteroffer basically kills the offer. Yes. We can add it to the list. Yes.
SFV Room 200B: Well, I mean, it’s sort of… that’s technically, revocation… Rejection. Sorry.
SFV Room 200B: Because remember we said in our lecture before, we said a counteroffer is a rejection and a new offer. So the rejection part is still the same, but that’s a very good question. Yeah.
SFV Room 200B: But it’s the same rejection I don’t want to add to our definitions. Okay, so we talked about acceptance, and we talked about the mirror image rule, we talked about counteroffers. I said a counteroffer is both a rejection of the original offer and publication of an entirely new offer, remember that?
SFV Room 200B: Alright, very good. Alright.
SFV Room 200B: Let’s see.
SFV Room 200B: Does anybody want to handle the SWIFT case, now that I’ve already talked about it ad nausea?
SFV Room 200B: Sir.
SFV Room 200B: Oh, Swift. Page 123, everybody. Swift info, mismigo,
SFV Room 200B: Swift, plaintiffs had sued Smeagol for unpaid merchandise, for the amount of roughly $8,500. Swift supplied nursing home goods to Smeagol with a continuing guarantee contract in this deal that he has, and
SFV Room 200B: Unfortunately, Smeagol was declared incompetent around this time, and his son took over the business, and he did not pay for any of the merchandise for most of the year of 1967.
SFV Room 200B: And I wrote, the issue here is whether the contract is still valid if one party becomes incompetent and the other party does not know about it. As we mentioned before, it seems to be the minority case, as the court ruled in this case that the continuing guarantee must still go on, even if one party is unaware of the incompetency, such as SWIFT not knowing that
SFV Room 200B: the original Smeagol was declared incompetent, then his son took over.
SFV Room 200B: And since no notice was given, and they took the merchandise, the contract was deemed still valid.
SFV Room 200B: Okay.
SFV Room 200B: Thank you. So, this is a discussion of mental and capacity of
SFV Room 200B: which is extremely limited at this point. The court basically says, I have in my notes that the court first argues a narrow view of the precedent, considers only the cases
SFV Room 200B: continuing offers of guarantee. So this enables the court to declare the cases of… this case to be a case of first impression, relieving itself of precedent, right? So the court doesn’t have to, you know, basically overrule any other decision.
SFV Room 200B: Then the court, the court next attacks the reasoning underpinning the general rule, or the, or the majority rule. The court makes a compelling argument based on relative,
SFV Room 200B: convenience under the majority view, basically, and basically, the court
SFV Room 200B: Is trying to protect the other party.
SFV Room 200B: by saying, if he doesn’t have a knowledge of the… of the insanity, no problem. And you can read about the offer… the death of the offeror on page 126, in case there’s any question how that plays out. It’s right there.
SFV Room 200B: The court says death of the offeror, the offerer’s death terminates the power of the offeree without notice to him, without notice to him, right? I mean, the offerer’s death, how is he going to give notice?
SFV Room 200B: Right? Are we going to now put burden on somebody else, a family member or somebody, to give notice? No, we’re not going to do that. Makes no reason, no common sense as a matter of public policy, right? We’re not doing that. So, that’s why it’s treated a little differently. And on page 128,
SFV Room 200B: The court says, the court says.
SFV Room 200B: It is thus clear that whatever view is taken as to the appropriate theoretical basis for determining the decedent’s liability in this fact pattern, the decisive consideration should be the presence or absence of a knowledge by plaintiff.
SFV Room 200B: Actual or reasonable to be imputed.
SFV Room 200B: Which means that the plaintiff knew or should have known? So the court says, not necessarily that he has actual notice, but if notice can be imputed. Like, you open the newspaper and see that the offeror has just dropped dead.
SFV Room 200B: Or you open the newspaper, and the offerer was just in a major accident, and he’s in a coma.
SFV Room 200B: Right? And you say, I didn’t know, but you should have known.
SFV Room 200B: Right? You should have known, you just read that, read about that, right? So, that should put you on notice, at least.
SFV Room 200B: Okay. Any questions before we move on?
SFV Room 200B: The, the case on page 131, Ardente versus Quran.
SFV Room 200B: a relatively important case, I want to say. Anybody?
SFV Room 200B: It’s important because you have to see how good of an insurance, malpractice insurance, you should carry with you when you become a lawyer, right? This is… this case should remind all of us that if you screw up, guess who’s going to be sued? The lawyer in this case.
SFV Room 200B: He’s the one that screwed up, right?
SFV Room 200B: Anyone on Zoom? This is Cameron, I can do it. Go ahead, sir, it’s all yours.
Cameron Smith: Thank you.
Cameron Smith: So here this is, Ernest P. Ardente, the plaintiff, brought this Civil Action Superior Court to specifically enforce an agreement between himself and William A.
Cameron Smith: and Catherine L. Horan, the defendants, to sell certain real property.
Cameron Smith: In 19… in August 1975, certain residential property in the city of Newport was offered for sale by the defendants. The plaintiff made a bid of $250,000 for the property, which was communicated to the defendants by their attorney.
Cameron Smith: After the defendant’s attorney advised the plaintiff that the bid was acceptable to the defendants, he prepared a purchase and sale agreement at the direction of the defendants and forwarded it to the plaintiff’s attorney for the plaintiff’s signature.
Cameron Smith: After investigating certain title conditions, plaintiff executed the agreement. Thereafter, plaintiff’s attorney returned the document to defendants along with a check in the amount of $20,000, and a letter dated September 8th, 1975, which read,
Cameron Smith: the following.
Cameron Smith: And, it stated, my clients are concerned that the following items remain in, with the real estate.
SFV Room 200B: And they wanted the dining room set, tapestry, wall covering in the dining room, fireplace fixtures, just a few things.
Cameron Smith: The defendant refused to agree to sell the enumerated items and did not sign the purchase and sale agreement. They directed their attorney to return the agreement and the deposit check to the plaintiff and subsequently.
Cameron Smith: Refused to sell the property to the plaintiff. The action for the specific performance followed.
Cameron Smith: And, I noted the main issue that I put here was, after executing a real estate bid, what conditions allow one to terminate the agreement, if any? And is the bid a requirement that one must complete the purchase of the real estate, or does it contain conditions?
Cameron Smith: I have a background in mortgage, so I’m kind of familiar with, you know, conditions that a lot of them will have, and purchase agreements, so…
Cameron Smith: I kind of did that, and then I stated here, the restatement of contracts. The acceptance may not impose additional conditions on the offer, nor may it add limitations, and acceptance, which is equivocal or upon condition.
Cameron Smith: Or with a limitation as a counteroffer and requires acceptance by the original offer, before a contractual relationship can exist.
Cameron Smith: And I also have here the question whether a communication by an offeree is a conditional acceptance counteroffer is not always easy to answer and must be determined by the same common sense process of interpretation that must be applied in so many other cases, and that’s from one,
Cameron Smith: the forbidden contracts.
Cameron Smith: And so, finally, I just put in the analysis here. Since the purchase contract contained conditions and the purchase agreement was never executed by the defendant, there was sufficient ability to terminate the bid for the real estate. After requesting additional information, the sellers
Cameron Smith: The plaintiffs decided to meet the requests of the buyers.
Cameron Smith: There was never a fully executed purchase agreement, only an accepted bid, and the Pontus appeals denied and dismissed.
SFV Room 200B: Thank you very much. So the buyer signed the purchase and sale agreement.
SFV Room 200B: Right? There was no dispute about that.
SFV Room 200B: What screwed this thing up?
SFV Room 200B: Yes.
SFV Room 200B: them adding conditions. Yeah, the lawyer’s cover letter that basically said the acceptance is conditioned upon the following.
SFV Room 200B: Well, you just made a counteroffer. This is a clear example of a mirror image rule case, where the acceptance was not a mirror image of
SFV Room 200B: the author.
SFV Room 200B: If you say, leave this, do that, you know, obviously you’re changing the terms, and…
SFV Room 200B: And, that’s exactly what the court said, right? The court said, yeah, yes. If this was… It should have been an unqualified acceptance, but it was a qualified acceptance, yes. If this wasn’t a real property, it was, like, an item, then UCC would say it’s okay and just count those as…
SFV Room 200B: If, in fact, they had entered into an agreement, then any additional or different terms would be…
SFV Room 200B: a mirror…
SFV Room 200B: Proposal, very good. A mere proposal, yeah. There would be, under the UCC, there would have been, but this is the traditional view of mirror image rule, right, at Common Law, which is that either say yes or no. Be done with it.
SFV Room 200B: Right?
SFV Room 200B: Okay, any questions so far?
SFV Room 200B: Oh, I was gonna read a couple of things.
SFV Room 200B: for the record.
SFV Room 200B: When you go to, page 136.
SFV Room 200B: And near the bottom of the page, the court says it is clear that subsection 22071 was intended to alter the ribbon-matching or mirror rule of common law.
SFV Room 200B: So, the answer to your question. Right? Right there. Then the court says.
SFV Room 200B: Under the common law, an acceptance which contains terms additional to or different from those of the offer constitute a rejection of the offer.
SFV Room 200B: And thus becomes a counteroffer.
SFV Room 200B: Or become a counteroffer.
SFV Room 200B: The terms of the counteroffer were said to have been accepted by the original offeror.
SFV Room 200B: when he proceeded to perform under the contract without objecting to the counteroffer. Thus, a buyer was deemed to have accepted the seller’s counteroffer if he took receipt of the goods and paid for them without objection.
SFV Room 200B: Section 22-207, under Section 22-207, the result is different. The court goes on to say, so if you want to read about all of that, it’s a wonderful thing that the court basically mentions how 2-207 treats all this very differently.
SFV Room 200B: On page… 138… Let’s see… 1, 2, third full paragraph.
SFV Room 200B: The court says, although Collins and Aikman’s use of the word subject to suggests that the acceptance was… were conditional to same
SFV Room 200B: To some extent, we do not believe the acceptance was expressly made conditional on the buyer’s assent to the additional or different terms, as specifically required under subsection 22-2071.
SFV Room 200B: And then it goes on to say, rather than acceptance, must be expressly conditional on the offer’s assent to those terms. In other words,
SFV Room 200B: I find those languages to be, compelling, and something that we should all think about, let’s see…
SFV Room 200B: One more piece… I want to make sure that I’m on the right case.
SFV Room 200B: Am I on the right case?
SFV Room 200B: This is Dorton. Oh, I’m so sorry. Yeah, this is the, we didn’t talk about this case, did we? Ignore, Dorton. Who wants to do the case Dorton? Very, very important. I gotta tell you, this case is tested.
SFV Room 200B: So…
SFV Room 200B: If you want to, I don’t know. Let’s find somebody new. Anybody on Zoom that is ready to do the case on page.
SFV Room 200B: 134…
frantzbiamby: B.
SFV Room 200B: Anyone?
SFV Room 200B: Should I call a name?
SFV Room 200B: Brian doesn’t like this one.
Cameron Smith: I can do it again.
SFV Room 200B: Okay, what the hell.
SFV Room 200B: But, you know, starting next week, guys, I’m just gonna start calling names, okay?
SFV Room 200B: We don’t want the usual suspects. We want new suspects.
Cameron Smith: Alright, sorry, this is gonna be another long read for me. I’ll try and shorten it if I can.
SFV Room 200B: No, this one is…
Cameron Smith: This one is important, so thank you.
SFV Room 200B: Okay, whoops, I’ll go for it then.
Cameron Smith: In each of the more, than 55 transactions, one of the partners in the carpet Mart, or on some occasions, Colin and Aikman’s, visiting salesman.
Cameron Smith: They telephoned Collins and Aikman’s order department in Dalton, Georgia, and ordered certain quantities of carpets listed in the Collins and Aikman’s catalog.
Cameron Smith: There is some dispute as to what, if any, arguments were reached
Cameron Smith: throughout, or through the phone calls, and through the visits by Colin and Aikman’s salesman. After each oral order was placed, the price, if any quoted by the buyer, was checked against Colin and Aikman’s price list.
Cameron Smith: And the credit department was consulted to determine if the carpet Mart had paid for all previous shipments.
Cameron Smith: After it was found that everything was in order, Collins and Aikman’s order department typed the information concerning that particular order on one of its printed acknowledgement forms.
Cameron Smith: Each acknowledgement form bore one of three legends.
Cameron Smith: Acknowledgement, customer acknowledgement, or sales contract.
Cameron Smith: The following position was… The following provision was printed on the face of the forms bearing the acknowledgement budget.
Cameron Smith: The acceptance of your order is subject to all of the terms and conditions on the face and reverse side hereof, including arbitration, all of which are accepted by the buyer. It supersedes buyer’s order form, if any. It shall become a contract either A,
Cameron Smith: When signed and delivered by the buyer to seller, and accepted in writing by seller, or B, at seller’s option, one buyer shall have given to seller’s specification of assortments, delivery dates.
Cameron Smith: Shipping instructions, or instructions to bill and hold as to all or any part of the merchandise herein described, or when buyer has received delivery of the whole, or any part thereof.
Cameron Smith: Or when buyer has otherwise assented to the terms and conditions hereofs.
Cameron Smith: There was also additional language in regard to the handling of arbitration, etc, and in all cases, the carpet market took delivery and paid for it, and this is
Cameron Smith: biggest part here. There was additional language in regard to handling of arbitration, etc. In all cases, the carpet Mart took delivery of and paid for the carpet photo, without objecting to any of the terms contained in the acknowledgement form.
Cameron Smith: So this was appealed, and the issue here is, are the arbitration agreements printed on the receipts and other order paperwork sufficient to be a binding contract between parties?
Cameron Smith: And, I have here, under rules, if the seller ships the goods and the buyer accepts them, a contract is formed under subsection 3.
Cameron Smith: The terms of this contract…
Cameron Smith: are those on which the purchase order and acknowledgement agree, and the additional terms needed for a contract are to be found throughout the UCC.
Cameron Smith: And the UCC does not impose an arbitration term on the parties where their contract is silent on the matter, hence the conflict between arbitration and a no arbitration pause would result in the no arbitration clause becoming effective.
Cameron Smith: And, the terms of the arbitration agreement according to the acceptance of the goods
Cameron Smith: A separate agreement was formed, other than the one created by the order paperwork. So under the UCC, there is not an arbitration agreement. The court determined that more information was needed before a finding could be reached.
Cameron Smith: And, the conclusion here was that it was remanded for further findings.
SFV Room 200B: Thank you.
SFV Room 200B: Thank you.
SFV Room 200B: This is an important case, and I relatively had a lot to say about it, so when I’m finished talking, then I’ll let you guys go, so please, if you can, stay awake for the next…
SFV Room 200B: 10 minutes or so.
SFV Room 200B: Okay, I’m gonna read from my notes.
SFV Room 200B: Just to make sure I pretty much cover what I want to cover.
SFV Room 200B: First of all, let me just say that under the common law, of course, the seller’s acknowledgement
SFV Room 200B: Was a conditional acceptance, yes?
SFV Room 200B: And therefore, a counteroffer.
SFV Room 200B: So under the common law, under the mirror image rule, it would be a counteroffer, which the buyer accepted by accepting the goods.
SFV Room 200B: The buyer’s acceptance of the… of the goods
SFV Room 200B: Creates what we call the last shot prison.
SFV Room 200B: Last shot.
SFV Room 200B: Prism, which you see on page… What is it?
SFV Room 200B: On page, 131, it says.
SFV Room 200B: counteroffer and the Battle of Forms, under that, it says 8A, mirror image rule, last shot principle, and UCC2-207. Last shot principle is basically where the party, the final party that has a reason to…
SFV Room 200B: Object, has the last shot.
SFV Room 200B: doesn’t, you know, takes, basically accepts. Here, the buyer accepted the goods.
SFV Room 200B: And his acceptance basically triggered the last shot principle. So, it’s not on the page, I’m just… these are my thoughts that I’m sharing with all of you.
SFV Room 200B: Seller’s terms then would govern under the common law.
SFV Room 200B: Under the UCC 22-207 Sub 1, there are two critical questions that we ask. One, is there a definite and seasonal expression of acceptance?
SFV Room 200B: And two, is the acceptance expressly made conditional on assent to the additional or different terms?
SFV Room 200B: Right? If the question 2… if the question one is answered yes.
SFV Room 200B: And question 2 is answered, no.
SFV Room 200B: Then it follows that there is a contract by virtue of the communication of the parts.
SFV Room 200B: Okay? And I think pretty much that’s what the court, I think, wants to conclude. But, as you said, they basically shoot it back down.
SFV Room 200B: Right?
SFV Room 200B: There’s something else that I wanted to add.
SFV Room 200B: If either of the two questions that I just mentioned are answered differently.
SFV Room 200B: Then, as previously I indicated, there is a no contract by virtue of the communications of the parties. Then you go to 2-207 sub 3,
SFV Room 200B: To see if a contract arose by the conduct of the parties.
SFV Room 200B: And if it did, what are the terms of that contract?
SFV Room 200B: Right?
SFV Room 200B: And, so,
SFV Room 200B: If this case is a bit confusing, it’s probably because you haven’t got the entire 2207.
SFV Room 200B: Because, as I said, that’s probably gonna be…
SFV Room 200B: a big chunk of your file is a discussion of 2-207. If you discuss 2-207 in, like, two lines.
SFV Room 200B: That’s gonna be a grape.
SFV Room 200B: B right here. See that? No, it’s not a… oh, you see a B? I’m sorry. It’s an O.
SFV Room 200B: For a zero. Well, for outstanding. Outstanding. Outstanding F! Outstanding F.
SFV Room 200B: We, we want a solid, robust, Discussion of 2-207.
SFV Room 200B: In order to deliver, ladies and gentlemen, I strongly suggest that you read this case again and again.
SFV Room 200B: and 32-207 again and again. I’ve mentioned it before, but I will… I am sure we will have to talk about it again. And of course, when we go for review, we will talk about it again.
SFV Room 200B: But, essentially, 2-207, deals with… Several things. One, is…
SFV Room 200B: What happens if there is an offer, and then the… there is a form, usually it’s in the form, but it could be a form of a communication?
SFV Room 200B: by the offeree that adds terms or changes the terms. What happens if the parties are merchants? What happens if the parties are, or at least one of the parties is a non-merchant, right?
SFV Room 200B: And that’s what we really have to understand. And I think these cases hit it home. If you haven’t read it, and you waited for somebody to just brief it for you.
SFV Room 200B: Bad idea.
SFV Room 200B: You gotta read the cases.
SFV Room 200B: Right?
SFV Room 200B: This is not… TK.
SFV Room 200B: Sorry, my daughter’s going to TK, so I have to say, trace this, sweetheart, see, like this…
SFV Room 200B: I don’t do tracing in this class. You gotta read the stuff.
SFV Room 200B: You gotta read the material, it’s law school.
SFV Room 200B: Seriously.
SFV Room 200B: I see some puzzled faces. I guarantee you you haven’t spent the time to understand the case.
SFV Room 200B: I’m only talking about the puzzled faces.
SFV Room 200B: Cameron is not one of them. I could clearly see that he, you know, he did a killing on this thing. This is an important case, and I’m warning you again, this is tested.
SFV Room 200B: So, it’s up to you how much you want to…
SFV Room 200B: Dig into it. It’s tested, okay?
SFV Room 200B: Alright.
SFV Room 200B: now that we covered it, let me just give you a couple of things. I think I mentioned them before, but I’ll mention them again.
SFV Room 200B: the issue. The court says, the prior question before us on appeal is whether the district court, in denying
SFV Room 200B: Collins and Ackerman’s motion for a stay pending arbitration, aired in holding that the carpet mark was not bound by the arbitration agreement appearing on the back of the acknowledgement form.
SFV Room 200B: I think the court basically says, and if you disagree with me, let me know, the court concludes that both parties are merchants.
SFV Room 200B: You agree with that? If both parties are merchants, what happens to the additional terms? The mirror becomes part of the contract? It becomes part of the contract, unless…
SFV Room 200B: There is an unless, right? Remember I told you, there is always an exception.
SFV Room 200B: One of those unlesss means is that if the party objects.
SFV Room 200B: the person receiving the communication says, no, no, no, no, no, not so fast, I don’t agree to these terms. Or, the offer had made the
SFV Room 200B: acceptance condition upon only accepting the terms of the offer, nothing else. So the offeror, as the master of the offer, says, either my terms or nothing.
SFV Room 200B: That’s easy.
SFV Room 200B: The other one is if it materially changes, right?
SFV Room 200B: If it maturely affects one of the parties.
SFV Room 200B: Right? And I think all courts have agreed, that I’ve mentioned before, that a material alteration is an arbitration clause. Why? Because you don’t get to see the jury. You don’t get to go to court.
SFV Room 200B: Right? You go before an arbitr. Most people don’t want that.
SFV Room 200B: Most lawyers don’t want their case before a judge, no matter what that is, arbitrator or a court of law. We want the jury to hear us.
SFV Room 200B: Right? So, clearly, it’s a material alteration, or, because it affects substantial rights of parties.
SFV Room 200B: So, that’s what, basically, the court is. And then, the court says.
SFV Room 200B: The district court found that subsection 22073 controlled the instant case, coding the following passage from, 1W. And the court says, if the seller ships the goods and the buyer accepts them, the contract is formed under subsection 3.
SFV Room 200B: The UCC does not impose an arbitration term on the parties where their contract is silent on the matter.
SFV Room 200B: Hence, a conflict between an arbitration and a no arbitration clause would result… would result in the no arbitration clause becoming effective.
SFV Room 200B: It is clear that subsection 2-071 was intended to alter the ribbon matching or mirror image rule, like I mentioned a minute ago.
SFV Room 200B: And then the court goes on to say, under the common law, an acceptance which contains terms additional to or different from those of the offer,
SFV Room 200B: that they… it becomes a counteroffer, right? A rejection in the counteroffer. The terms of the counteroffer were said to have been accepted by the original offer, or when he accepted the performance, or in one of the cases.
SFV Room 200B: in the old days, before the UCs came about, by accepting the goods or keeping them for an unreasonable time.
SFV Room 200B: Without objecting to the counteroffer. Thus, the buyer was deemed to have accepted the seller’s counteroffer if he took receipt of the goods and paid for them without objection.
SFV Room 200B: Under subsection 22-207, the result is different. The quote goes on to say, bottom of page 136 and top of 137, rather, under the current battle of the forms, each party typically had… and these are the stuff that I would add to my notes. That’s why I read them, not because I love to read a lot.
SFV Room 200B: But because I really think that if you’re puzzled a little bit and you want solid language to use for yourself, here it is. It’s right here in black and white.
SFV Room 200B: Rather, under the current battle of forms, each party typically has a print form drafted by his attorney and containing as many terms as they could envision.
SFV Room 200B: to favor the party in its sale transaction, whereas under the common law, the disparity between the fine print term and the party’s forms would have prevented the consummation of the contract.
SFV Room 200B: But obviously under-207 is different, because I said.
SFV Room 200B: 2-207 envisions a contract no matter what, even by condom. You sneeze, oh! You sneeze, your head went this way, there is an agreement.
SFV Room 200B: Right? But literally, that’s what they look for, right? Didn’t you just do that, sir? Yeah, but I was sneezing, and no, no, no, no, no, no, you were saying yes.
Cameron Smith: Can I ask a quick question, Professor?
SFV Room 200B: necessary.
Cameron Smith: Is there a reason they’re not making a clear distinction of whether this applies under UCC or common law? It seems like they’re kind of jumbling up both and using them to understand the arbitration agreement.
SFV Room 200B: I don’t know if the court is saying that. I think the court is basically trying to say that this is an agreement between merchants, and that the arbitration agreement should not
SFV Room 200B: Although I don’t think the court made that determination, but the District Court finally did.
SFV Room 200B: But the court is trying to distinguish common law view of things versus the UCC view, and clearly saying, what is subsection 3, right? How important is subsection 3, right?
SFV Room 200B: In other words, as somebody just mentioned, yeah, it becomes part of the contract unless… and this is one of the unlessses that the court is basically talking about, right?
SFV Room 200B: Specifically, and I hope I answered your question, on page 138,
SFV Room 200B: Middle of the page, the court says… I’m sorry, third full paragraph, I think I read it once before, but I’ll read it again.
SFV Room 200B: The court says, although Collins and Ackerman’s use of the word subject to suggests that the acceptance was conditional to some extent, we do not believe the acceptance were expressly made conditional on the buyer’s assent to the additional different terms. In other words, the seller’s,
SFV Room 200B: communication did not have that, so not so fast, basically, the court said. As specifically required under subsection 2-207 Sub 1.
SFV Room 200B: In order to fall within this provisio, it is not enough that an acceptance is expressly conditional.
SFV Room 200B: or additional, or different terms. Rather, an acceptance must be expressly conditional. In other words, you take these provisions, or nothing. We have no deal.
SFV Room 200B: on the offerors, assent to those terms. Are we clear so far that the offeror basically says, you must assent to my terms and nothing else?
SFV Room 200B: or we have no deal. That’s not the conclusion that this Court made. So the court then says, we’ve got to go to Subsection 3, and because it’s a substantial,
SFV Room 200B: effect that it’s going to have on the rights of the parties. An arbitration clause, basically, is something that we’re not going to add to a contract unless both parties actually agree to it.
SFV Room 200B: Make sense?
SFV Room 200B: And, one final read before I let you go. It’s on page 139. That’s the second full paragraph. Report says, because comments and a convention acceptance.
SFV Room 200B: were not expressly conditional on the buyer’s assent to the additional terms within the provision of subsection 2271. A contract is recognized
SFV Room 200B: under subsection 1, and the additional terms are treated as proposals for additions to the contract under subsection 2-2072.
SFV Room 200B: Now the court goes on to say, see, you see the analysis that it’s… this is how you get the points and the credits.
SFV Room 200B: Now, the court says, since both Collins and Ackerman and the Carpet Mart are clearly merchants.
SFV Room 200B: as the term is defined under subsection 2-1041, which you should not say. You don’t need that. All you have to say is, the parties are merchants because
SFV Room 200B: They hold themselves out to the public as
SFV Room 200B: Being in the business of purchasing or selling these type of goods, right?
SFV Room 200B: The arbitrition provision will be deemed to have been accepted by the corporate bond under subsection 2272,
SFV Room 200B: Unless it materially alters the terms of the carpet Mart’s oral offer.
SFV Room 200B: Which it does, but that’s a conclusion for later. So you see how the court gradually gets… goes through every step, and finally decides why
SFV Room 200B: that, additional term should not become part of the contract. So for the merchant’s part, both parties need to be merchants in the actual subject? Both parties have to be merchants, yes.
SFV Room 200B: Yep.
SFV Room 200B: Any other questions before I let you go?
SFV Room 200B: Yes, did we say last time when one person isn’t furnishing, the other one isn’t, and then…
SFV Room 200B: It becomes… if one person is not a merchant, what happens to our treasure club? Yeah, I already know. What happens to it? It’s a mere proposal. To be accepted, if he doesn’t accept it, expressly accepted, it doesn’t become part of the contract.
SFV Room 200B: All you have to do is go read the definition of 2-47. It’s right there in black. Unless there is any other questions, I’ll let you go and see you next week.
SFV Room 200B: Thank you.
Rami Helo: Thank you, Professor.
Karen Hernandez: Yo.
Cameron Smith: Thank you, Professor.
Sevada Safarian: Professor.
SFV Room 200B: Sure.
Fatima Razavi: Yes, sir.
SFV Room 200B: Yes, you are welcome. It’s very understandable, the three sections, like, gives you… It’s very understandable, the three sections that it gives you. Well, not for everybody, but I’m glad that it’s understandable for you, because, you know, people are media and sometimes legitimately, it’s a little…
Yessenia Soria: Pastor, have a good night.
SFV Room 200B: Thank you.
SFV Room 200B: You’re, you’re a business.