Bus-L 201 Test #2

Front 1

A Contract is a ________ _________ promise or set of promises

Back 1

Legally enforceable

Front 2

What is the social utility of contracts?

Back 2

1) Allows parties to know in advance that their promises will be kept and/or if not kept, be forced to pay damages

2) Lets people make private laws to make deals/contracts

3) Induces people to work together to make an enforceable deal

Front 3

Difference b/w Common Law and UCC

Back 3

Common Law:
- Picky, Old School, Enforced even if unfair

UCC:
- For sale of goods only
- Is a bunch of statutes
- Flexible and reasonable

Front 4

Elements of a K

Back 4

1) Offer
2) Acceptance
3) Consideration
4) Voluntary Agreement
5) Capacity
6) Legality of K and object

Front 5

Unilateral K

Back 5

Offer= promise
Acceptance= Action

Ex: Offer =Reverend said he'll pay 5000 to anyone who produces tapes

Acceptance= Produced tape

Front 6

Bilateral K

Back 6

Promise on both sides

Front 7

Valid K

Back 7

Contract has all required elements

Front 8

Unenforceable K

Back 8

due to statute of limitations , other reasons, etc

Front 9

Voidable K

Back 9

Where the law gives one side of the contract the option to cancel. Ex: minor's, duress, etc

Front 10

Void Bargain

Back 10

*not a K*
- Invisible to law (hitman K)

Front 11

Executed K

Back 11

K that is performed by both sides

Front 12

Executory K

Back 12

Not yet fully performed by all parties

Front 13

Express K

Back 13

Very explicit, all terms are layed out

Front 14

Implied K

Back 14

Implied from circumstances, terms aren't even discussed. Ex: Doctor appt.

Front 15

UCC does NOT cover for the sale of:

Back 15

1) Land
2) Stocks, Bonds, Intangibles
3) Services

Front 16

What is a Hybrid K? What do you do?

Back 16

Both goods AND services in K. You have to decide which is most important.

Front 17

What happens when no UCC rule applies>?

Back 17

You fall back on Common Law

Front 18

The UCC Code

Back 18

1) Applies to sale of goods only NOT Land/Building, Stocks/Bonds, Services

2) Fall back on C/L

3) If considered sale of "Goods" use UCC over C/L

4) Sometimes courts use UCC even if it is not covered. Mainly bc C/L is too harsh

Front 19

What is the nature and origins of the Restatement?

Back 19

1) Put together by legal smart guys to help understand all the statutes.

2) Reflects the modern contract law development

3) Acts a lot like UCC

Front 20

What is the impact of the Restatement?

Back 20

1) Doesn't have force of law b/c it was put together by group of private people, ALI

2) BUT, has been very influential to the evolution of K law

Front 21

What is a Quasi K?

Back 21

A Quasi K is when the courts give remedy to someone who provided a benefit without getting anything in turn. *it isn't technically a K because no offer and acceptance*

Front 22

What are the elements of a Quasi K?

Back 22

1) One party does somethin (benefit)

2) The other party knowingly receives and retains benefit (watches you shovel driveway)

3) Doesn't pay for shit

Front 23

What is the remedy when the court enacts a Quasi K?

Back 23

Dude gets reasonable value for what he did (not necessarily price of proposed contract)

Front 24

What is Promissory Estoppel?

Back 24

When someone makes a promise to do something and wont do it when NO K EXISTS

Front 25

What are the elements of Promissory Estoppel?

Back 25

1) Guy makes promise and should forsee that the other guy is going to rely on that promise

2) Other guy does rely on promise

3) Injustice results because the guy expected the promise to come true.

Front 26

What is the remedy when the court enforces Promissory Estoppel?

Back 26

Either the guy has to perform what he promised OR the guy gets RELIANCE LOSSES- gets money, etc.

Front 27

Two Types of Remedies without K are...

Back 27

1) Quasi K

2) Promissory Estoppel

Front 28

Elements of a Legally Sufficient Offer

Back 28

1) Definite terms
2) Person who makes offer is ready to go forward if accepted
3) Must be communicated any way (verbal, email, paper, etc)

Front 29

Definite Terms:

1)


2)

Back 29

1) at C/L, all important terms must be in the K, EVEN if they both accept K without terms, then its still not a K

2) under UCC, use GAP FILLERS for "open terms"

Front 30

What 2 things must be present in order to use gap fillers?

Back 30

1) intent to enter a K

2) Enough information so the courts can tell what they agreed to

Front 31

How do they determine if the person who makes offer is ready to go forward with it if accepted?

Back 31

Objective Standard- 3rd party view, dont ask either side, used to be subjective

Front 32

What must consist of communication of offeror?

Back 32

1) Must be Direct and Reasonable- "should of been aware"

2) No specific method

3) MUST be received by offeree

Front 33

Explain advertisements (non-reward) and if they are an offer or not

Back 33

Generally NOT an offer, only inviting buyers to make offer. BUT some specific ADS that require ACTION can be an offer.

Ex: "Half-Price Xbox's= NOT an offer

Front 34

Explain how reward advertisements are treated:

Back 34

Considered Unilateral K

Ex: "pay $100 to find Cat"

Front 35

Explain how Auctions are treated:

Back 35

NOT an offer, only as inviting buyers to make offer

Front 36

How can offer's terminate?

Back 36

1) By the offeror's own terms (usually not the case) OR

2) By "operation of law": offer silent

Front 37

When the parties dont specify when the termination ends, how can it end?

Back 37

1) Passage of "reasonable time"
2) Revocation by offeror
3) Rejection by offeree
4) Death or Insanity by either party BEFORE acceptance
5) Destruction of essential subject matter BEFORE acceptance
6) When law changes to make offer illegal (trade embargo's, etc)

Front 38

Revocation of oferror may revoke his offer at anytime before acceptance UNLESS...

Back 38

1) Option K- "I'll give you 3 days extension if you give me $100"
2) Promissory estoppel- ????
3) Offer for Unilateral K- must give time once action acceptance is started.
4) Firm offer- UCC rule, Signed writing w/ promise not to revoke

Front 39

A revocation is effective ONLY upon...

Back 39

Receipt by offeree

Front 40

Rejection of Offer can be either by...

Back 40

1) express rejection- says no
2) implied rejection of offer by making counter offer- destroys first offer.

Front 41

A revocation is effective ONLY upon...

Back 41

receipt by the offeror

Front 42

Elements of a Legally Sufficient Acceptance

Back 42

1) You have to accept the terms, otherwise counter-offer.
2) Intention of offeree to accept and enter a binding K
3) Communication of acceptance by the requested act or promise

Front 43

2 types of acceptance of offeror's terms... ("mirror image,etc)

Back 43

1) Under C/L, you have to accept "mirror image" of the terms, otherwise counter-offer.
- asking questions is not rejection, accpetance, or counter.
- grumbling acceptance=bitching after accepting, STILL ACCEPTANCE, but NOT counter offer

2) Under the UCC, you don't need a "mirror image" of the offer.
3) Can only accept offer specifically made to you

Front 44

Communication of acceptance for unilateral and bilateral...

Back 44

Unilateral K- must perform the requested act

Bilateral K- must make the return promise exactly as requested

Front 45

Two choices for bilateral K acceptance...

Back 45

1) express= "I accept" or equivalent

2) Implied= conduct indicating acceptance *Ex: Painter came and painted house*

Front 46

Is silence ever acceptance?

Back 46

Generally, NO...Unless

1) people usually practice silence as acceptance
2) you say your silence equals acceptance
3) you let the guy perform the acceptance action (developer lets pavers pave neighborhood)

Front 47

Communication of Acceptance (when it is enacted)

Back 47

1) Stipulated Method (Requirements)
CL and UCC= ON Dispatch UNLESS states that he must receive the acceptance <<<< "Mailbox Rule"

2) Authorized Method ("you may")

BOTH EFFECTIVE ON DISPATCH:

C/L= either what they tell you to use OR the SAME method as the OFF'R OR whats custom.
UCC= ANY reasonable method

3) NON-Authorized (means you didnt use above^^^)

C/L= On Receipt
UCC= On Dispatch, ONLY if within same time if it was Authorized, OTHERWISE on RECEIPT

Front 48

An offer to buy "for prompt or current shipment" my be accepted by...

Back 48

1) Prompt promise to ship (email, etc)
2) Shipping the matching goods
3) Shipping the non-matching goods- which is a breach of K UNLESS you say that you are sending the wrong goods, then its a COUNTER-OFFER.

Front 49

3 Steps when Acceptance isn't "Mirror Image" for UCC

Back 49

1) Put in stuff they agree on
2) Use gap filler for MATERIAL differences
3) If not material, use seller form

Front 50

Define consideration

Back 50

when an act or promise has legal value which is bargained and given in exchange for the promise at issue

Front 51

Three things for consideration

Back 51

1) Legal Value
2) Bargained for exchange
3) Don't care if it was a bad deal, given you weren't forced, threatened, etc.

Front 52

Legal Value is either:

Back 52

1) Take on NEW legal duty
2) Giving up something you previously had a legal right to do (forbearance)

Front 53

What does bargained for exchange mean?

Back 53

1)Two party's must communicate and ask other party to do X
2) Both must have "deals", i.e. "I'll do this if you do this"

Front 54

Promises and Acts which ARE NOT Consideration (bc of no new legal value)

Back 54

1) Pre-existing Duty
2) Past Consideration
3) Moral Obligation
4) Illusory Promises

Front 55

Preexisting Duty

Back 55

the promise to perform or the performance of a preexisting public duties: retaining from crime or tort, performing official duties.

Front 56

Exceptions to Preexisting Duty

Back 56

1) Unforeseeable difficulties- Ex: "Quicksand w/ house contract"
2) if new value added on preexisting K
3) New K entered by both parties

Front 57

Paying Less than full liquidated amount

Back 57

Even if he says I'll take 45 and the other guy pays 45 he still owes him 5 more dollars because Liqudated debt=50

Front 58

Debt Settlements that ARE enforceable

Back 58

Accord and Satisfaction
Composition Agreement
New consideration plus paying less than the full amount

Front 59

Accord and Satisfaction

Back 59

I think its 50, No i think its 40, Ok, i'll pay you 45, ok that works, That IS BINDING.

Front 60

Composition Agreement

Back 60

when you pay back two people you owe money too: "I'll pay 45 is BINDING even if its LIQUIDATED

Front 61

New Consideration

Back 61

"I'll pay 45 PLUS used car, etc" is BINDING

Front 62

When is Consideration NOT required?

Back 62

1) Promissorry Estoppell
2) "Firm Offers"- says he wont revoke K
3) Modification of Pre-existing K
4) new promises-both by statute of limitations AND bankruptcy
4) Charitable subscriptions

Front 63

What is involved with PERFORMANCE?

Back 63

1) Conditions
2) Personal Taste/Comfort
3) Degrees of Performance
4) Timing of Performance
5) Excuses for Non-Performance

Front 64

Conditions for Performance

Back 64

1) Condition Precedent- BEFORE contract duty, "If i get the loan, i'll buy your house"

2) Condition Subsequent- AFTER contract duty

3) Concurrent Conditions- DURING contract duty, "both sides have to do duty at the same time"

Front 65

How can conditions be created?

Back 65

1) Expressly (in the K)
2) Implied from the Circumstances
3) Constructively, when implied by law

Front 66

What two events use Personal Taste/Comfort to see if a performance is just?

Back 66

1) "Paying for pictures you don't like, must be before you see them"

2) Bargaining involves mechanical fitness or suitability, THEN party MUST accept the other's performance and pay contract price.

Front 67

What are the 4 types of degrees of performance?

Back 67

1) Strict- did everything you were supposed to, entitles to whole K price

2) Substantial- minor problems, pays [K PRICE - DAMAGES].

3) Material breach- Major Problems OR dude didn't do anything. NO PK, IF QUASI K, then find out worth of shitty house and make them pay for that.

4) Anticipatory repudiation- Informed in advance that he wont perform K. Two options,

1) Cancel K
2) Wait and try to convince to get the guy to do the performance