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25 Cards in this Set
- Front
- Back
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Basic Elements of a Valid Contract?
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Offer and Acceptance
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What is an Offer?
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A statement which when recieved the individual believes that he or she could enter into an enforcable deal by satisfyin the condition.
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Unilateral vs. Bi-lateral Contracts
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If a return promise is requested then it is a bi-lateral contract.
If an act is requested, then it is an unilateral contract. |
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How can offers be terminated?
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1. Lapse of Stated Time
2. Lapse of Reasonable Time 3. Incapacity/Death of Offeror (Even if Offeree doesn't know) 4. Revocation (Please see Common Law v. UCC) 5. Rejection or Counteroffer 6. Impossibility or Illegality |
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Describe Rules of Revocation
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Basic Rule: Offer can be revoked by offeror at any time. Even if offeror promised to hold offer open for a period of time (without consideration).
1. Firm/Irrevocable Offer: If consideration is paid to keep offer open, then can't be revoked. 2. Promissory Estoppel: If party relies on offer to keep offer open to his detriment. 3. Part Performance: When the offer is a unilateral contract, once the offeree begins performance offer can not be revoked. 4. UCC Firm Offer: When offer is 1) made by a merchant, 2) assurances are made to hold offer open, and 3) assurance is in writing; offer can not be revoked. |
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What constitutes Acceptance?
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Exercise of the power to concude a contract given to an offeree by the offeror.
*No assignments of offers **Unless an option contract |
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Method of Acceptance (Unilateral vs. Bilateral)
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Unilateral - Performance equals acceptance
Bilateral - Promise (Notice Req'd) or Performance equals acceptance |
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Effect of Counteroffers (UCC)
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When for a SALE OF GOODS: A response by offeree that purports to be an acceptance operates as such even though it adds to, subtracts from the terms of the offer.
*Material changes to terms will prevent formation of a contract. |
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Effect of Unilateral Mistake
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One party is mistaken.
Either party may enforce contract, unless the other party had reason to know of mistake or had duty to disclose fact to mistake. |
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Effect of Mutual Mistake
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Both parties were mistaken to an ESSENTIAL ELEMENT of the contract.
Mutual Mistake excuses parties for performance. |
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Types of Misrepresentations, Non-Disclosue, Fraud
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1. Misprepresentation
2. Non-Disclosure where duty exists 3. Undue Influence 4. Breach of Confidential Relationship 5. Duress Can make a contract void or voidable |
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UCC Battle of the Forms (Term Requirements)
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Additonal terms in writing submitted with the acceptance between merchants for the sale of goods is valid and binding they:
1) Do NOT materially alter the offer; or 2) Are NOT objected to by the offeror in advance of the acceptance 3) Are NOT objected to by the offeror within a reasonable time after notice is given. |
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Indefiniteness or Abscence of Terms (Common Law vs. UCC)
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CL - An agreement missing essential terms meant not contract was formed
UCC - A contract for the sale of goods may be created in any manner sufficient to show agreement, including conduct by the parties that recognize the contract. |
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Forms of Incompetency to Contract
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1. Infancy (Voidable by minor, disaffirmance required upon reaching age of majority)
2. Mental Illness (Guardianshp = Void, Non = Voidable) 3. Intoxication (Voidable) 4. Corporate Incapacity (Voidable) |
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Express & Implied Warranties (Sale of Goods)
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1. Express
2. Warranty of Merchantibility 3. Warranty of Fitness for a Particular Purpose |
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Enforcement of Modification to Contracts
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1) Consideration given to modification
2) Complete destruction of previous contract, new contract made 3) Where unforseen difficulties exist, one party agrees to compensate the other for difficulties 4) Where new obligations exist on both sides. |
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Compromise of Claims
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1) Discharge of debt for less than owed ONLY VALID where debt owed is disputed.
2) Money paid in return for non-use of an invalid claim is enforceable if P had reasonable belief he could bring claim. |
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Debts Barred by Statute Of Limitations
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A promise to pay a debt owed after the statute of limitations has run is enforceable without any new consideration.
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Intended Beneficiary vs. Incidental Beneficiary
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Intended - one to who the promisee wishes to make a gift of the promised performance. (right to bring action: money owed - both parties, gift - only promisor)
Incidental - one who just happens to be benefited by the contract. (no right to bring action) |
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Assignment vs. Delegation
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Assignment - Refers to a transfer of rights under a contract.
Delegation - Involves the obtaining of someone else to perform a party's obligations under a contract. |
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Assignment Not Allowed When
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a) It materially increases the duty or the risk of the obligor
b) It materially reduces the obligors chance of obtaining performance. c) When prohibited by contract. |
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Delegation Not Allowed When
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a) The other part has substantial interest in having the indvidual perform (special skill)
b) When prohibited by contract. |
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Statute of Frauds
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1) Land Contracts
2) Sale of Goods >= $500 3) >1 Year to Perform 4) Suretyship 5) Promise by Executors & Admins 6) Contracts in Consideration of Marriage (Pre-Nup) *MUST BE IN WRITING |
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Sale of Goods (SoF) Requirements
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1) Indicate Contract Made
2) ID Parties 3) Contain Quantity 4) Signed by Party to be Charged *Omitted Terms can be Proven by Parol Evidence |
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Installment Contract (Breach)
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Installment contract is defined as one in which the goods are to be delivered in a number of shipments, and each shipment is to be seperately accepted and paid for.
Buyer may only reject only if the nonconformity substantially impairs the value of the shipment, and if nonconfirmity cannot be cured. Buyer can only call off rest of the installment contract if they breach substantially impairs the entire contract. |
