Pre-K Liability 2

1. Pre-K Liability 2 Contracts – Prof. Merges Feb. 28, 2011

2. 3/1: Statute of Frauds Intro. and Notes on Contemporary Statutes, 257-270; C.R. Klewin, 270-77. 3/3: S o F II Richard v. Richard, 280; Note on Sales of Goods and St. Ansgar, 289-295; Notes on 2-201(3) and Estoppel, 294; Surety clauses, 297-9, Intro and Monarco, 305.

3. Pre-contractual liability • Definiteness

4. Cyberchron Corp. v. Calldata Systems

7. Cyberchron Corp. v. Calldata • Procedural History • Facts

8. Who appealed? • Why?

9. Cyberchron Corp. v. Calldata • How many causes of action in the Cyberchron complaint?

10. Cyberchron Corp. v. Calldata • How many causes of action in the Cyberchron complaint? • Breach of K • “Quantum meruit” • Promissory Estoppel/Reliance

11. Negotiation History

12. Negotiation History • 1989-90: “extended negotiations” • May 15, 1990 – Grumman P.O. • June 2, 1990 Letter from Grumman (“insist” on perf. Under “K”)

13. District Court Ruling • Enforceable agreement?

14. District Court Ruling • Enforceable agreement?  Why not?

15. District Court Ruling • Enforceable agreement? • Why not? • “two of the most essential, material and substantial terms” missing

16. District court • Theory of recovery?

17. District court • Theory of recovery? • Reliance

18. District court • Theory of recovery? • Reliance • On what promise?

19. The key promise • Reliance: On what promise? • Grumman/Calldata’s Wilhelm, to Cyberchron’s Paul: P. 237

20. What was the district court’s “reliance period”?

21. What was the district court’s “reliance period”? • July 15 – Sept. 26 1990 • Why this period?

22. What was the district court’s “reliance period”? • July 15 – Sept. 26 1990 • Why this period? [From] Grumman direction to proceed “as if we have a K” [to] entering into 2nd K with Codar Technology on Sept. 26

23. Reliance Period 7.15.90 9.26.90

24. Reliance Period 7.15.90 9.26.90 Why no reliance before 7/15?

25. Reliance standard 3 Elements in NY: p. 237: • Clear unambiguous promise • Reasonable foreseeable reliance • Injury to relying party  “Unconscionable” injury?

26. § 90. Promise Reasonably Inducing Action Or Forbearance (1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.

27. Reliance Period 7.15.90 9.26.90 Why no reliance after 9/26?

28. What was the enforceable promise? • We will pay you for expenses in preparing the data terminal prototype? • OR: we will negotiate a final agreement in good faith?

29. Channel Home Centers v. Grossman

32. Famous historical site?

34. Who was Washington’s No. 2 person at Valley Forge?

35. Alexander Hamilton

36. What was the 1st major battle after Valley Forge?

37. What was the 1st major battle after Valley Forge? • Battle of Monmouth, June 19, 1778

38. What major legal figure was encamped wit Washington at Valley Forge?

39. What major legal figure was encamped wit Washington at Valley Forge?

41. Channel Homes v. Grossman • Facts • History

42. Negotiation history

43. Negotiation history • Location tour Nov. 28, 1984 • Memo Dec. 7, 1984 “To induce the Tenant to proceed with the leasing of the store, you will withdraw the store from the rental market and only negotiate [this K] to completion.”

44. District court holding

45. District court holding • No K • Reliance? • Restitution?

46. Holding – 3d Circuit

47. Holding – 3d Circuit • “Evidence existed” to support K to negotiate in good faith • Remand: Issues to consider

48. Was there actually a K? • Was the offer open only for 30 days?

49. What about lost opportunities?

50. What about lost opportunities? • Note 1, p. 245