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122 Cards in this Set

  • Front
  • Back
Are Loans and other credit arrangements sale of goods?
• Loans and other credit arrangements not sale of goods, CL applies.
in mix contract, how to apply?
), if the sale of goods element is more important, then UCC 2 applies; if K is primarily about services, then apply CL
If K itself expressly divides payment, how to apply?
the apply UCC to sale of goods part and common law to the rest.
what's article 2 a of ucc?
for leases of goods
what doctrine apply for leasing an airplane ?
UCC Art 2A applies
does UCC ART 2A apply to lease of business lease or consumer lease?
both
does article 2 a apply to lease of a building?
no,real property not goods
what's a contract, what's the two questions to ask?
) Is a K formed – offer/acceptance; (2) whether the Agreement is legally enforceable (are there defenses?)]
what's Express K?
created by parties’ words either oral or written
what's Implied K?
created by parties’ conduct
what's Quasi K?
an equitable remedy that applies whenever the application of K law yields an unfair or inequitable result. It’s not limited by K rules but governed by equitable concepts. Protects against unjust enrichment.
what can p recover from quasi K?
• P can recover from quasi K the reasonable value of the benefit conferred (not K price
What's Bilateral K?
offer can be accepted in any reasonable way
what's Unilateral K?
offer can only be accepted by performance
usually, all contract are what?
All Ks are bilateral unless the offer says it can ONLY be accepted by performance
what's a void contract?
• A void contract is one without any legal effect from the beginning (e.g., an agreement to commit a crime
what's A voidable contract?
• A voidable contract is one that a party may elect to avoid or ratify (e.g., a contract by a minor
what's an unenforceable contract?
• An unenforceable contract is one otherwise valid but for which some defense exists extraneous to formation
what's Offer?
manifestation of an intention to be bound, created by words or conduct
what's the basic test for offer?
The basic test is whether a reasonable person in the position of the offeree would believe that his or her assent creates a contract.
are ads offer?
no,offers b/c there is no quantity term and an unlimited # of persons can accept.
“1 blue dress just like Monica’s, only $1! First come, first served.” is this an offer?
yes,. An offer b/c it specifies the quantity and who can accept.
is this an offer?• S agrees to sell car for reasonable price ?
no.vague or ambiguous terms, like “reasonable” or “fair” or “appropriate” = NOT an offer
what's Requirement K?
K where quantity be sold is measured by buyer’s requirements or nee
Café offers to buy ALL its requirements of beans for 5 yr for $1 per can.
• If S accepts Café’s offer, and for 3 yrs, Café ordered 1000 cans/year. Can the Café (buyer) require S to deliver 2000 cans this year?
• NO. Buyer can’t take the seller by surprise. Any increase in buyer’s requirement has to be in line with the buyer’s prior demands – rule of thumb 10%
about missing price, what's the difference in common law and article 2?
• Common Law (e.g., in the instance of selling land): there is NO offer unless the writing both describes the property and states the price.
• Art 2: there is offer if parties so intend, it’s still a good offer even though it doesn’t state price
is vague price term an offer?
vague price term is NO offer under both CL & Art 2
what' the 2ND STAGE OF AGREEMENT PROCESS
TERMINATION OF OFFER
if an offer has been terminated, can it be accept?
no
what are the four way of terminating a contract?
1)Lapse of Time
2) Offeror’s Revocation
Offeree’s Rejection: THREE scenarios
Termination by operation of law
If offer states the last date of acceptance, can you accept after that date?
no
if no deadline is stated, what's the reasonable time?
rule of thumb 30 days).
what's Direct revocation?
a statement by the offeror to the offeree indicating unambiguously that the offeror has changed her mind
what's Indirect revocation?
conduct by offeror unambiguously indicating unwillingness or inability to contract with offeree and the offeree is aware of the conduct.
o If P2 was driving my car that I offered to P1 and P1 sees the car, and P2 tells P1 that I have sold her the car. can p1 accept the offer?
P1 can’t accept offer → Offeror’s conduct (selling car) + offeree awareness (saw P2 driving car and knew P2 bought car) ⇒ indirect revocation.
does the fact that there are similar offers to other people, does it revoke a prior offer?
no
when is Revocation of an offer effective?
Revocation of an offer is only effective if it is received before acceptance
what 's the date that revocation is effective?
Revocation is effective on the day of receipt.
If offeree accepts before her receipt of my revocation, what's the result?
then too late to revoke → an A is formed!
Receipt Rule applies]
Generally, can offeror revoke at anytime before acceptance?
yes
what are the four situations that the offer can't be revoked?
o Option
o Detrimental reliance that is reasonable & foreseeable
o Part performance of an offer to enter a Unilateral K
o Firm offer rule under Art 2
what's option?
a promise to keep the offer open that is PAID for (consideration): consideration
Based on Columbia Law School’s offer of a job, I sell my house in Austin & move family to New York in reliance on Columbia’s offer, can columbia revoke offer?
no.if my reliance is both reasonable and foreseeable.
if offer states acceptance only by performance, and P starts performing, can this be revoke?
once performance begins, O can no longer revoke
is starting performance acceptance of bilateral contract?
yes
what's ny distinction regarding performance and revoke?
offer can be revoked until performance is completed
is mere preparation for performance is enough to trigger unilateral part performance rule ?
no
preparation can be reasonable, foreseeable reliance, does this make the offer irrevocable ?
yes
what's firm offer?
a signed, written promise by a merchant promising to keep an offer open for a period of time
what's merchant?
merchant is defined as a businessperson – dealing in the kind of goods sold or who otherwise by his profession is held out to have specialized knowledge of the business practice involved
Does consideration required for firm offer?
no,writing takes place of consideration
how long does a firm offer has?
• A firm offer has a 3 months cap → if offer is open for longer than 3 months, it will be scaled back to 3 months
if you have an option, do you need a firm offer?
: if you have an option, you don’t need a firm offer. Option is better b/c you are not restricted by duration requirement.]
if no time is stated in a firm offer, how long will it be opened?
If no time is stated, an offer will be open for a reasonable time NOT to exceed 3 months.
is every signed, written offer by merchant is a firm offer?
no, there must be a promise to keep the offer OPEN.
If there is a written open offer in a non-sale of goods situation, can s revoke?
yes, : S can revoke before acceptance
: if offer is in writing, signed by the offeror and states that offer is irrevocable, do there need to have consideration?
if offer is in writing, signed by the offeror and states that offer is irrevocable, then the offer is not revocable during the time stated or for a reasonable time, even if the offer is not supported by consideration (firm offer rule expanded).
how can Offeree’s Rejection
• Counteroffer
• Conditional acceptance
• An acceptance containing an ADDITIONAL or DIFFERENT terms operates as a rejection under Common Law, but not UCC 2
if S wants to sell for $50k and B says I will only pay $49k , what's the result? can you accept the original offer?
this counteroffer kills the offer, can’t accept original offer.
if S wants to sell for $50k ,if the offeree asks a question, “will you take $49k?” , is this an rejection?
no,is considered mere bargaining → not a rejection.
what's Conditional acceptance?
operates as a rejection & termination of an offer
what does it means for words such as “if,” “provided that,” “so long as,” “on the condition that” are used in acceptance ?
rejection
how does conditional acceptance operate?
It operates the same way as a counteroffer: it terminates the offer and becomes a new offer.
can acceptance in additional or different terms in common law?
An acceptance containing an ADDITIONAL or DIFFERENT terms operates as a rejection under Common Law, but not UCC 2.
can acceptance in additional or different terms in common law?
acceptance must mirror offer (mirror image rule)
o Acceptance must be exactly the same as offer
does article 2 have mirror image?
no mirror image, additional term don't kill offer
does additional terms get into k？
no
when does additional terms become part of k under article 2?
) both are merchants
2) the offer does not explicitly limits acceptance to the terms of the offer;
3) the additional term is not a material change; AND
4) offeror does not object within a reasonable time.
does disclaim all warranty a material change?
yes
does change time of delivery material change?
no
if either party is a non-merchant, what's the effect of additional terms?
if either party is a non-merchant, the additional term is merely a proposal that is to be separately accepted or rejected (but the original is not killed).
o If the original offer contains an objection to any additional or inconsistent terms, and the offeree’s response proposes new terms and states that the response is a counteroffer subject to express acceptance by the original offeror,when contract arises?
until performance begins.
how to terminate by operation of law?
• Death/insanity of either party before acceptance
• Supervening illegality
• Destruction of the proposed contract’s subject matter
if the other party doesn't know of the death, does death terminate offer?
yes
if the offer has an options K, does death terminate option?
the death of one party doesn’t terminate the option, the living party can still accept within the period of the options K.
if part performance to enter into unilateral contract, does death/insanity terminate the offer?
no
what's the 3RD OF THE AGREEMENT PROCESS?
acceptance.
who can accept?
an offer can be accepted by (i) a person who knows about the offer; and (ii) who is the person to whom it was made
can offers be assign?
Offers cannot be assigned
can options be assigned?
options can be assigned unless the option says no.
how can one accept an offer?
• One can usually accept by offer of bilateral K where nothing is said about how to accept by promising (promising to perform), performing or starting to perform
in ny, how to accept?
absent an indication to the contrary, acceptance by the same means of communication that the offer was communicated.
but if there is language in offer about manner of acceptance, how to accept?
language controls.
In unilateral K, how can you accept?
can accept only by complete performance. Partial performance is not an acceptance
what does partial performance mean in common law？
it doesn't mean acceptance, but it makes the offer irrevokable
what's ny distinction in partial performance?
partial performance is revokable, only full performance is irrevokable.
at common law, in unilateral k, how can you accept?
need complete performance as acceptance
when it start performance, the offeror cannot revoke, does 2 party bond?
no,Only ONE party is bound until the other party completes the performance.
what does common law consider improper performance?
Improper performance is acceptance plus a breach of K
offers P $5k to paint her house white. P paints the house maroon (conduct creates K – implied K). Has P accepted O’s offer so that O can sue for breach of K?
yes
what's the article 2 rule of improper performance?
• Art 2: same as CL, improper performance is simultaneously an acceptance of offer and a breach of K.
if B asks for Britney CD, but gets Incubus CD instead, but the S explains in a note that S is out of Britney CDs and is sending Incubus CD to hopefully satisfy the needs of B. Has S accepted?
no
if B asks for Britney CD, but gets Incubus CD instead, but the S explains in a note that S is out of Britney CDs and is sending Incubus CD to hopefully satisfy the needs of B. Has S accepted?
no.• If S lets B know why it is sending the wrong goods, then there is NO acceptance and thus NO breach
is Silence as acceptance:
offeree’s inaction or silence = NOT acceptance→but note silence can be acceptance due to course of dealing
• Offeror leaves note saying “I offer to sell my car to you for $5000, if I don’t hear from you by 9pm tonight, you have accepted. YOU say nothing. did you accept?
NO Acceptance!!• Offeror can’t single-handedly turn the offeree’s silence into acceptance b/c there is too much chance that the offeree will accept against his will.
when is an acceptance effective?
• Mailbox rule : acceptance is effective when MAILED (protects the offeree from offeror’s revocation). Date of mail is acceptance!
for mailbox rule, does it matter that the letter does not received?
no,! Burden of loss is on the offeror
what's the Four exceptions to Mailbox Rule?
• if offer provides otherwise: offer trumps mailbox rule
• Irrevocable offer: if there is an options K, the acceptance must be received before the option expires

• Acceptance, then rejection: under mailbox rule unless the rejection reaches offeror first, and the offeror relies on the rejection, then the mailbox rule applies, thus acceptance would be effective.
• Rejection, then acceptance (mailbox rule doesn’t apply)
o if rejection is sent first, then acceptance is also only effective when it is received. It’s a RACE → whichever gets there first is effective.
what's DEFENSES AGAINST FORMATION?
SOME FLAW IN THE AGREEMENT PROCESS
what's the most commonly tested defense?
1) lack of consideration; 2) lack of capacity & 3) mutual mistake
what's the three categories of defendant lack of capacity to contract?
• Infant – under 18 (minors);
• intoxication (drug or alcohol) if other party has reason to know; and
• mentally incompetent – lacks ability to understand agreement
what's ny distinction that infants cannot void contracts?
o 14.5-year-old or older who contracts for life insurance;
o educational loans for those 16 or older;
o all contracts by 18-year-olds
o realty contracts related to marital home; and
o contracts involving artistic or athletic services.
in lack of capacity to contract, who has the right to disaffirm the k？
o An incapacitated D has the right to disaffirm (avoid, get out of) the K
• P’s incapacity is irrelevant
in incapacity as a defense, If L is 17, but she says she is 18, is there a defense?
yes,doesn’t matter, actual age controls
how can an incapacitated d affirm a k?
o An incapacitated D can impliedly affirm a K by retaining the benefit of the K WITHOUT complaint after she gains capacity.
If L retains the Harley without complaint after she turns 18 → can s enforce the K？
S can enforce the K against her b/c she implied reaffirmed the K.
what's the three requirements for implied reaffirm in lack of capacity case?
D must have lacked capacity at the time of A
2) D later gains capacity
3) D retains the benefit of K w/o complaint
an incapacitated party is liable for what?
is liable for necessaries (food, shelter, clothing or medical care) but only on a quasi-K basis (reasonable value for benefit conferred
what's Duress/coercion?
it is a defense in contract formation. o Can’t threaten physical harm or economic harm (economic duress) so as to get the other party enter into K against her free will
what's the elements of duress?
• when someone threatens to breach an existing K unless he gets a better deal
• the other guy only agrees to a new A b/c he desperately wants to get the first deal done and
• no alternative source of supply
is taking advantage of fortuitous circumstance duress?
selling umbrella for $10 when it rains rather than $3 when it’s sunny out
no.
what's misrepresentation?
it is a defense.o If material misrepresentation induced the A, A would not be legally enforceable even if the misrep was honest and innocent.
under mutual mistake of material existing fact, when will there be no contract?
• There will be no contract if:
• Both parties mistaken,
• The mistake concerns a basic assumption of fact on which the contract was made, and
• Materiality affects the agreed exchange
what's ny distinction in mutual mistake?
the contract is void in case of mutual mistake.
when the parties know that their assumption is doubtful (so-called conscious ignorance, is mutual mistake a defense?
no
• K to buy house, both were unaware that the house was destroyed by fire 2 days ago
no K, excused by mutual mistake
does Mistake on the market value of thing material?
no
unilateral mistake of material existing fact, is it a defense?
U R stuck!.The mere fact that one party is laboring under a mistaken belief is NOT a fatal flaw as long as the other party is unaware of your mistaken belief
what's the exception for unilateral mistake of material existing fact?
if the non-mistaken party knew or should have known of the mistake, the contract is voidable by the mistaken party.
what's Lack of consideration?what's consideration?
it is a defense. consideration is : bargained for legal detriment or benefit; bargain for exchange.
is • Illusory promise sufficient for consideration?
no,if only one party is bound to perform, the promise is illusory and will not be enforced.
is Past consideration consideration?
is NO consideration at all.
• You can’t bargain for something that has already been done.