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32 Cards in this Set

  • Front
  • Back
Common Law Governs...
contracts for services. If the transaction includes both services and goods, then the common law governs if the contract is for the rendition of services, with goods incidentally involved
Uniform Commercial Code Governs...
contracts for the sale of goods. The UCC applies if the contract is for the sale of goods, with services incidentally involved.
A Good is
defined as a moveable object.
In determining which law governs, a court would consider the following factors:
(1) the language of the contract
(2) the nature of the business of the supplier
(3) the intrinsic worth of the materials.
Offer
A party makes an offer if she demonstrates a willingness to enter into a bargain under reasonably certain terms without the need for any further assent on her part.
Ads and Offers
(1) Ads generally are not offers but invitations for offers.
(2) An ad can be an offer, however, if the the ad’s language contains terms that are certain and definite and if the offeree is clearly identified
Acceptance
a manifestation of assent to the terms thereof made by the offeree.
Counteroffer
(1) Offer made by an offeree to his offeror relating to the same subject as the original offer but proposing a different bargain
(2) Offeree's power of acceptance is terminated by his making of a counteroffer, unless the offeror has explicitly stated a contrary intention or the counter-offer manifests a contrary intention of the offeree
An offer may be revoked...
by the offeror anytime before acceptance
Consideration
Consists of two elements:
(1) a bargained-for exchange and
(2) that which is exchanged must be of legal value
In a bargained-for exchanged...
the promise induces the detriment and the detriment induces the promise
A contract is
a legally enforceable agreement
Value Systems & Policies
(1) Freedom of Contract→ freedom of the parties to enter into a contract as they please; no interference of the courts
(2) Equity & Fairness→ limitations to avoid exploitation
Bilateral Contract
An exchange of reciprocal promises by both parties
Unilateral Contract
Offeror offers to exchange his promise of a future performance only in return for the offeree's actual rendering of performance, rather than a promise (of future performance)
Preliminary Negotiations
are not offers because the offeree has reason to believe that the offeror does not intend to conclude the bargain until he makes a further manifestation of assent
Mailbox Rule
Usually, an acceptance will be treated as an acceptance as soon as it is dispatched by the offeree. If an offeree puts an acceptance in the bail BEFORE the offeror revokes the offer, then the acceptance of the offer becomes effective
Mailbox Rule Exception
Because the offeror is the Master of the Offer, he can decide that an acceptance is ineffective until received by the offer
Applying the Mailbox Rule to Instantaneous Forms of Communication
The mailbox rules does NOT apply to instantaneous forms of communication. For instantaneous forms of communication, acceptance takes place when communicated; Courts have similarly held that the mailbox rule does NOT apply to acceptances by phone, fax, or e-mail
Certainty
(1) An offer cannot be accepted unless the terms of the contract are reasonably certain.
(2) The terms of a contract are reasonable certain if:
(a) they provide a basis for determining the existence of oa breach; and
(b) for giving an appropriate remedy
Certainty Requirement
An offer is deemed as "certain" if the essential terms are present:
(1) Identification of the offeree
(2) Subject matter
(3) Price
(4) Time of payment, delivery, or performance
(5) Quantity
(6) Nature of work to be performed
An offeree's power of acceptance may be terminated by:
(1) rejection or counter-offer
(2) lapse of time, or
(3) revocation by the offeror, or
(4) death or incapacity of either party
Exception to Counter-Offer
A mere inquiry regarding the possibility of different terms, a request for a better offer, or a comment upon the terms of the offer, are not ordinarily a counter-offer
Revocation of an Offer
(1) An offer is generally freely revocable and can be countermanded by the offeror at any time before it has been accepted
(2) Must be communicated to the offeree
(3) It is enough that the offeree receives reliable information, even indirectly
Option Contract Created by Part Performance or Tender
Unilateral.
(1) Created when the offeree tenders or begins the invited performance or tenders a beginning of it
(2) Offeror's duty is conditional on completion of the invited performance
Detriment
Occurs if the promisee does something that s/he is under no legal obligation to do, or refrains from doing something s/he has a legal right to do
Adequacy of Consideration; Mutuality of Obligation
If the requirement of consideration is met, there is no additional requirement of:
(1) a gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promisee; or
(2) equivalence in the value exchanged; or
(3) "mutuality of obligation"
What is sufficient legal value?
Any act, forbearance or creation, modification or destruction of a legal relationship will be sufficient to sustain a promise
Condition or Consideration: A Test Involving Motive
(1) If the motive of the promisor was to induce the detriment, then treat the action by the promisee as consideration.
(2) If the motive of the promisor was no more than to state a condition of the promise to make a gift, then there is no consideration
Donative Promises
Donative promises lack consideration and therefore, unenforceable.
Inadequate Consideration
(1)No requirement of equivalent values exchanged, however, gross inadequacy of consideration may be relevant to charges of fraud, incapacity, duress, and other defenses
(2) If sham or token consideration is given, then the thing conveyed is likely a gift
(3) If the purported consideration has no value, then the consideration fails and no contract is formed
Past and Moral Consideration
Neither past nor moral consideration has legal value