Philo, a businessperson, is a friend of Quiana, the owner of Rise n' Shine, a coffee stand. Every day, Philo spends a few minutes at the stand, watching the brewing, considering the options, and usually buying a cup of coffee and something extra—a

Question

bagel, a muffin, a cookie, or a sandwich. One afternoon, Philo comes to the stand and picks up a bottle of iced coffee and a sandwich priced at $5 each. Philo waves the items at Quiana without saying a word and walks out. Is there a con-tract? If so, how would it be classified in terms of formation, perform-ance, and enforceability?

Answer 1

The facts presented here indicate the presence of all the ele-ments necessary for a valid contract. A serious offer and accep-tance are made, consideration is ex-changed (a bottle of iced coffee and a sandwich for $5 apiece), both parties have capacity, the selling of the items is legal, and no particular form is required for this type of contract. Thus, a contract exists.
For the rea-sons given here, this contract is classified as valid, enforce-able, and informal. In addi-tion, this is a classic case of an implied con-tract. There is no ex-plicit agreement between the parties. Rather, an agree-ment is implied by Philo's action of waving the items and by his past con-duct. By his con-duct Philo is telling Quiana that he will pay for the items later. The contract is also bilateral (as opposed to uni-lateral) because Quiana im-pliedly promises to sell the items to Philo in ex-change for Philo's implied promise to pay. The contract is partially executory, as Philo has engaged to pay for the items in the future. Because the contract is for a legal pur-pose, both parties have capacity, and voluntariness of consent is not an issue, the con-tract is neither voidable nor void.