ALTERNATE CASE PROBLEM ANSWERS
CHAPTER 12
AGREEMENT IN TRADITIONAL AND E-CONTRACTS
12-1A. Definiteness of terms
The court determined that the September 1996 document was not a valid, enforceable contract
and ruled in favor of the defendants. The plaintiffs appealed to a state intermediate appellate
court, which reversed this part of the lower court’s judgment and remanded the case for a
determination of the amount of damages to be paid to the plaintiffs on this claim. The appellate
12-2A. Agreement
Three elements are necessary for an offer to be effective: (1) the offeror must have a serious
intent, (2) the terms of the offer must be reasonably certain or definite, and (3) the offer must be
communicated by the offeror to the offeree. In addition to statements that lack seriousness,
there are a number of types of expressions that do not qualify as offers under the “intent”
concept. Among these expressions are invitations to negotiate, which include ads and similar
solicitations. The “Eligibility List” form was an invitation to apply—the sort of preliminary
B-2 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 12
specified any of the employment details: the position, the salary, the starting date, the duration,
12-3A. Intention
The court granted Horipro’s motion for summary judgment. The court reiterated Cusano’s
argument that he did not intend to sell to Horipro his writer’s share of the mechanical royalties to
the songs. The court pointed out, however, that “as Horipro argues, Cusano has provided no
12-4A. Agreement
The Harlesses filed a motion for summary judgment, which the court granted. The Connors
appealed to a state intermediate appellate court, which affirmed the lower court’s judgment. The
appellate court noted that the Harlesses questioned “whether a price term was physically
present in the agreement and whether that written price was the amount actually negotiated and
12-5A. Click-on agreements
A click-warp agreement is generally construed as a contract, and as long as a party has the
opportunity to review the terms and decline to accept, it is generally held to be enforceable. In
this case, the court held the clause to be enforceable and dismissed Hughes’s claims. The court
explained, “The prevailing view towards contractual forum-selection clauses is that such clauses
APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 12 B-3
12-6A. Online acceptance
Under the Uniform Electronic Transactions Act (UETA), which most states have adopted, a
“record or signature may not be denied legal effect or enforceability solely because it is in
electronic form.” Under the federal Electronic Signatures in Global and National Commerce (E–
SIGN) Act, no signature may be denied legal effect solely because it is in electronic form. Thus,
12-7A. Shrink-wrap agreements and browse-wrap terms
The court denied Dell’s motion to compel arbitration, holding that the “Terms and Conditions
Agreement” was invalid. The court reasoned, “Plaintiffs were given the opportunity to read the
terms and conditions * * * in the form of a browse-wrap agreement. Specifically, Plaintiffs could
have viewed the terms via a hyperlink, inconspicuously located at the bottom of the webpage.
* * * [T]his was not sufficient to put Plaintiffs on notice of the terms and conditions of the sale of
the computer. As a result, the browse-wrap agreement found on Dell’s webpage cannot bind the
12–8A . Acceptance
An offer is a manifestation of willingness to enter into a bargain that is made in a way that
justifies another person in understanding that his or her assent to that bargain is invited and will
conclude it. The test for an offer is whether it induces a reasonable belief in the recipient that the
recipient can, by accepting, bind the sender. In making an offer, the offeror may decide to whom
to extend it.
B-4 APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 12
12–9A. Shrink-wrap agreements
Yes. A shrink-wrap agreement is an agreement whose terms are expressed inside the box in
which the goods are packaged. The party who opens the box may be informed that he or she
agrees to the terms by keeping whatever is in the box. In many cases, the courts have enforced
the terms of shrink-wrap agreements just as they enforce the terms of other contracts.
Sometimes, the courts reason that by including the terms with the product, the seller proposed a
12-10A. A QUESTION OF ETHICS
1. The court concluded that McMillan had been paying the premiums to maintain the
policy, that Hibbard was required to perform the agreement with McMillan, and that Hibbard had
been “stubbornly litigious.” The court ordered Hibbard to pay McMillan $8,226 plus $304.20 in
interest as reimbursement for premiums paid, as well as $2,292.57 in attorney’s fees. Hibbard
APPENDIX B: ALTERNATE CASE PROBLEM ANSWERS—CHAPTER 12 B-5
2. The limits to parties’ freedom to contract, as indicated by the discussion of the
principles in this chapter, include the requirements for an effective offer and its acceptance.
Among those requirements, and actually contended in the Hibbard case, is the definiteness of
the terms. Hibbard argued in part that the terms in his agreement with McMillan were not
sufficiently clear or precise for a court to provide an appropriate remedy.
The court agreed that a contract on which specific performance is sought, which is what
McMillan wanted in this case, “must be certain, definite, and clear; and so precise in its terms
that neither party can reasonably misunderstand it. The requirement of certainty extends not
only to the subject matter and purpose of the contract, but also to the parties, consideration, and