TERMS
Options and Firm Offers
Option K – A separate K with separate consideration that makes an offer to enter into another K irrevocable for
a time.
When offer is irrevocable (exceptions to freely revocable rule):
•Option K w/ real consideration (money has changed hands)
•Option K w/o real consideration (fake consideration – money has not changed hands but consideration
has been discussed --- “I will give you a dollar”)
•UCC 2-205 Firm Offers
•Promissory Estoppel
Unless an exception applies, any attempted revocation of a valid option K is generally ineffective, even if:
•There is a counteroffer
•Offeror dies, or
•Offeror loses capacity (if the person becomes incapacitated).
Promissory Estoppel
•An offer in which the offeror should
•1) reasonably expect an offer to induce action or forbearance of a
•2) substantial character and which does induce is enforceable to the extent that it is
•3) necessary to avoid injustice.
•Buyer’s option – Buyer can buy as much or as little from seller as they choose.
•Requirements K – K in which the buyer agrees to buy all its requirements of a certain item from the
seller
•SEE CASE: Drennan vs. Baird
Firm Offers
•U.C.C. 2-205: An offer by a 1) merchant to buy or sell 2) goods, in 3) signed writing, which gives
assurance that it will be held open and is irrevocable, for lack of consideration , during the time stated
or is not time is stated for a reasonable time, but in no event can the offer remain open for longer than
three months; but any such term of assurance on a form supplied by the offeree must be separately
signed by the offeror.
UNJUST ENRICHMENT
•Unjust Enrichment – Where one party is unjustly benefited by the actions of another which were done
with the expectation of compensation (hospital saving the life of unconscious patient).
•Different from promissory estoppel; not based on a promise. Unjust enrichment is an
independent cause of action where claimant conferred a benefit on recipient and it is unjust for
the recipient to keep the benefit without paying for it.
•Elements:
■1) Unjust – Compensation is appropriate only where it is just and equitable under the
circumstances.
■2) Enrichment – A benefit was conferred. Cannot be officious or gratuitous.
■3) Benefit must be of the degree where it would be unjust for benefited party to keep it
without paying for it.
•Restitution – The remedy for unjust enrichment. Measured by market standard --- quantum meruit or
quantum valebant. Used when no breach of K, but yes damages.
•Quantum Meruit – “As much as deserved” – Market value of services.
•Quantum Valebant – “As much as they are worth” – Market value of goods.
•Specific Restitution – The return of a specific object (grandma’s locket).
•Quasi K – K implied in law – Not a real K. Treated as such for procedural purpose of fitting into K form
of action. Occurs when one side has been unjustly enriched.
•Implied in Fact: “real” contract -- K inferred from actions rather than express agreement -
actions indicating mutual assent so law infers bargain to pay (example of calling a plumber to fix
leaky faucet)
