Contracts 1L

Front 1

What creates an IMPLIED K?

Back 1

Party's CONDUCT indicates intent to be bound

Front 2

REJECTION: Words or conduct of the ________ rejecting the offer.

Back 2

REJECTION: Words or conduct of the OFFEREE rejecting the offer.

Front 3

What creates a QUASI-K?

Back 3

Party is unjustly enriched

Front 4

REVOCATION: Words or conduct of the ________ terminating the offer.

Back 4

REVOCATION: Words or conduct of the OFFEROR terminating the offer.

Front 5

Order of K Analysis

1

Back 5

- Applicable Law?
- Formation (Offer, offer rejection, acceptance)
- Terms
- Performance
- Remedies
- Excuse for nonperformance
- Third-party problems

Hint 5

*Armadillos from Texas play rap, eating tacos

Front 6

BILATERAL K's require an exchange of ________.

Back 6

BILATERAL K's require an exchange of PROMISES.

Front 7

Definition of a contract

2

Back 7

Legally enforceable agreement

Front 8

UNILATERAL K's require the exchange of an _____ for a PROMISE.

Back 8

UNILATERAL K's require the exchange of an ACT for a PROMISE.

Front 9

GOODS: All things ________ at the time they are __________ to the K.

Back 9

GOODS: All things MOVABLE at the time they are IDENTIFIED to the K.

Front 10

List the only 2 ways a K is unilateral

2

Back 10

- Reward/prize/contest
OR
- Offer EXPRESSLY REQUIRES performance for acceptance

Front 11

REJECTION: Words or conduct of the ________ rejecting the offer.

Back 11

REJECTION: Words or conduct of the OFFEREE rejecting the offer.

Front 12

[Applicable Law]

UCC Art. II applies to what?

3

Back 12

Movable, sellable good (NOT services)

Front 13

REVOCATION: Words or conduct of the ________ terminating the offer.

Back 13

REVOCATION: Words or conduct of the OFFEROR terminating the offer.

Front 14

[Applicable Law]

Is real estate covered by common law or Art. II?

3

Back 14

Common law

Front 15

BILATERAL K's require an exchange of ________.

Back 15

BILATERAL K's require an exchange of PROMISES.

Front 16

[Applicable Law]

If there is a "mixed deal" with both goods and services, does the UCC or common law apply?

3

Back 16

It depends.
Test: All or nothing/most important test.
Determine if the goods or the services is more important to the deal and apply those riles to the WHOLE disagreement over the K.

Front 17

Buyer agrees to buy all he needs of a stated item, for a stated period of time, from the seller.

Back 17

REQUIREMENT K: Buyer agrees to buy all he needs of a stated item, for a stated period of time, from the seller.

Front 18

[Formation - Offers]

Definition of offer

5

Back 18

Objective manifestation of intention to K (showing of commitment)

Front 19

Seller agrees to sell all he produces of a stated item, for a stated period of time, to the buyer.

Back 19

OUTPUT K: Seller agrees to sell all he produces of a stated item, for a stated period of time, to the buyer.

Front 20

[Formation - Offers]

At common law, what term MUST be part of the offer?

5

Back 20

Price
(NOTE: price is NOT required to create an Art. 2 offer)

Front 21

_________ RULE: This makes an ACCEPTANCE effective upon DISPATCH.

HOWEVER, it does NOT apply where the ______ states that acceptance is effective only upon ________.

Back 21

MAILBOX RULE: This makes an ACCEPTANCE effective upon DISPATCH.

HOWEVER, it does NOT apply where the OFFER states that acceptance is effective only upon RECEIPT.

Front 22

[Formation - Offers]

Test for quantity change in requirements Ks

6

Back 22

Buyer CAN increase if reasonable in comparison to prior demands.
(Restated: CANNOT be unreasonably disproportionate)

Front 23

If a period of _________ is stated in an offer, the offeree must _______ w/i that period to create a K.

Back 23

If a period of ACCEPTANCE is stated in an offer, the offeree must ACCEPT w/i that period to create a K.

Front 24

[Formation - Offers]

EXCEPTIONS to advertisements not being offers

6

Back 24

- Rewards
- Ads that expressly indicate who can accept

Front 25

In transactions BETWEEN MERCHANTS, additional terms proposed in the acceptance become part of the K UNLESS:

(1) They __________ _________ the agreement;

(2) The offer _________ limits ___________ to the terms of the offer; or

(3) The ________ objects w/i a __________ time.

Back 25

In transactions BETWEEN MERCHANTS, additional terms proposed in the acceptance become part of the K UNLESS:

(1) They MATERIALLY ALTER the agreement;

(2) The offer EXPRESSLY limits ACCEPTANCE to the terms of the offer; or

(3) The OFFEROR objects w/i a REASONABLE time.

Front 26

[Formation - Termination of offer]

Four categories of terminations of offers

6-11

Back 26

- Lapse of Time
- Death of either part
- Revocation (revocation means offerOR has terminated his offer)
- Rejection (rejection means offerEE was terminated his ability to accept)

Front 27

UCC RULES---

In K's involving the sale of goods, an acceptance need NOT mirror the offer's terms.

Thus, an acceptance that deviates from the offer is NOT necessarily a __________ and _____________.

Back 27

UCC RULES---

In K's involving the sale of goods, an acceptance need NOT mirror the offer's terms.

Thus, an acceptance that deviates from the offer is NOT necessarily a REJECTION and COUNTEROFFER.

Front 28

[Formation - Termination of offer]

Exceptions to termination of K by death

7

Back 28

- Option K
- Part performance of a unilateral K

Front 29

MERCHANT: One who ______ in goods of the kind sold or who has __________ __________ of the business practices involved.

Back 29

MERCHANT: One who DEALS in goods of the kind sold or who has SPECIALIZED KNOWLEDGE of the business practices involved.

Front 30

[Formation - Termination of offer]

2 ways offerOR can revoke offer

7

Back 30

- Express, unambig. statement
OR
- Unambig. conduct to which the offerEE is aware

*NOTE: Multiple offers does NOT revoke

Front 31

In this type of K, the party w/ the power of acceptance has paid for the offer's irrevocability.

NOTE: It limits the offeror's power to revoke!

Back 31

OPTION K: The party w/ the power of ACCEPTANCE has paid for the offer's IRREVOCABILITY.

NOTE: It limits the offeror's power to revoke!

Front 32

[Formation - Termination of offer]

When does revocation of an offer sent via mail become effective?

8

Back 32

when RECEIEVED

Front 33

A SIGNED WRITING by a MERCHANT promising to hold the offer open for some period of time.

Back 33

FIRM OFFER: A SIGNED WRITING by a MERCHANT promising to hold the offer open for some period of time.

NOTE: This limits the offeror's power to revoke!

Front 34

[Formation - Termination of offer]

4 situations when an offerOR CANNOT revoke

8

Back 34

- Option K
- UCC Firm Offer
- FORESEEABLE detrimental reliance
- Start of Unilateral K performance

Front 35

REVOCATION is effective when _____________ by the offeree.

Back 35

REVOCATION is effective when RECEIVED by the offeree.

Front 36

[Formation - Termination of offer]

Elements of an option K

8

Back 36

-Promise not to revoke
-Supported by consideration

Front 37

A counter-offer is BOTH a __________ and a new __________.

It terminates the original offer and reverses the roles of the parties!

Back 37

A counter-offer is BOTH a REJECTION and a new OFFER.

It terminates the original offer and reverses the roles of the parties!

Front 38

[Formation - Termination of offer]

Elements of an Art. II firm offer

8

Back 38

- Offer to buy goods
- Signed, WRITTEN promise
- Explicit STATEMENT will not to revoke
- Offering party is a MERCHANT

*** No payment is required

*NOTE: Max firm offer period is 3 months (if not stated, is for a reasonable time, max. of 3 mon.)

Front 39

An offer may be accepted SO LONG AS it has NOT been ___________.

An OFFER may be terminated by:

(1) An ______ of either party; or

(2) By __________ of _____.

Back 39

An offer may be accepted SO LONG AS it has NOT been TERMINATED.

An OFFER may be terminated by:

(1) An ACT of either party; or

(2) By OPERATION of LAW.

Front 40

[Formation - Termination of offer]

Elements that make a unilateral K irrevocable

9

Back 40

- Performance started
AND
- is NOT mere preparation (actually starts working)

Front 41

In K's for the sale of ______, the ________ must be certain or capable of being made certain.

Back 41

In K's for the sale of GOODS, the QUANTITY must be certain or capable of being made certain.

Front 42

[Formation - Termination of offer]

Three ways an offerEE rejects an offer (terminating ability to accept)

9-11

Back 42

- Counteroffer
- Conditional Acceptance
- Proposes new terms (mirror image rule)

Front 43

It is important to distinguish between preliminary __________ (NOT offers) and __________ (offers).

Back 43

It is important to distinguish between preliminary NEGOTIATIONS (NOT offers) and PROMISES (offers).

Front 44

[Formation - Reason for non-enforcement: Consideration substitutes]

Promissory estoppel elements

19

Back 44

1 - Promise
2 - Reliance that is reasonably foreseeable
3- Enforcement necessary to aboid injustice

NOTE: only use when NO CONSIDERATION

Front 45

[Formation - Termination of offer]

"Twist" to the Counteroffer termination of offer rule

10

Back 45

Mere "bargaining" does not terminate

NOTE: look for a question

Front 46

To be valid, an OFFER must be:

(1) An expression of _________, __________, or __________ to enter into a K;

(2) ________ and ________ in its terms; and

(3) __________ to the offeree.

Back 46

To be valid, an OFFER must be:

(1) An expression of PROMISE, UNDERTAKING, or COMMITMENT to enter into a K;

(2) DEFINITE and CERTAIN in its terms; and

(3) COMMUNICATED to the offeree.

Front 47

[Formation - Termination of offer]

Define conditional acceptance

10

Back 47

When offerEE responds to an offer with "only if" ... or other condition

Result is that terminates offer, and the new statement becomes an offer

Front 48

An offer creates a ___________ of __________ in the offeree.

Back 48

An offer creates a POWER of ACCEPTANCE in the offeree.

Front 49

[Formation - Termination of offer]

Effect of additional terms in a sale of goods.

11

Back 49

Sale of goods - Art 2.

New terms does NOT disturb the fact that a K is created, SO LONG AS the new terms are NOT stated as a conditional

Front 50

QUASI-K: This is NOT a K, but rather a way to avoid ________ ____________.

Back 50

QUASI-K: This is NOT a K, but rather a way to avoid UNJUST ENRICHMENT.

NOTE: The enriched party must pay RESTITUTION equal to the unjust enrichment.

Front 51

To create an enforceable K, there must be:

(1) _________ _________ (ie. offer + acceptance);

(2) __________ or a substitute; and

(3) No ___________ to formation.

Back 51

To create an enforceable K, there must be:

(1) MUTUAL ASSENT (ie. offer + acceptance);

(2) CONSIDERATION or a substitute; and

(3) No DEFENSES to formation.

Front 52

Manifestation of assent to an offer.

Back 52

ACCEPTANCE: Manifestation of assent to an offer.

Front 53

OFFEROR'S POWER TO REVOKE

An offeror has the power to revoke an offer any time before _________ has occurred, EVEN IF he has ___________ to keep the offer open UNLESS:

(1) ___________ has been paid to keep the offer _______ (thus forming an ________ K);

(2) The _________ reasonably RELIES on the offer to his ________, or

(3) The offer is a MERCHANT'S _______ offer.

Back 53

OFFEROR'S POWER TO REVOKE

An offeror has the power to revoke an offer any time before ACCEPTANCE has occurred, EVEN IF he has PROMISED to keep the offer open UNLESS:

(1) CONSIDERATION has been paid to keep the offer OPEN (thus forming an OPTION K);

(2) The OFFEREE reasonably RELIES on the offer to his DETRIMENT; or

(3) The offer is a MERCHANT'S FIRM OFFER.

Front 54

Under the UCC, when an acceptance proposes ADDITIONAL TERMS, a K would be formed under the terms of the offer UNLESS _______ parties are _________.

Back 54

Under the UCC, when an acceptance proposes ADDITIONAL TERMS, a K would be formed under the terms of the offer UNLESS BOTH parties are MERCHANTS.

Front 55

COMMON LAW

Under the common law, an ________ must mirror the ______; if new ________ are added in the acceptance, it is treated as a ____________.

Back 55

COMMON LAW

Under the common law, an ACCEPTANCE must mirror the OFFER; if new TERMS are added in the acceptance, it is treated as a COUNTER-OFFER.

Front 56

UCC

Under the UCC, ADDITIONAL TERMS in a K between MERCHANTS usually become part of the K when the _________ does not ________ the offer.

EXCEPTION: If the _________ notifies the OFFEREE w/i a ________ time after receiving ____________ that he _______ to the new terms, the K is formed according to the terms of the ________.

Back 56

UCC

Under the UCC, ADDITIONAL TERMS in a K between MERCHANTS usually become part of the K when the ACCEPTANCE does not MIRROR the offer.

EXCEPTION: If the OFFEROR notifies the OFFEREE w/i a REASONABLE time after receiving ACCEPTANCE that he OBJECTS to the new terms, the K is formed according to the terms of the OFFER.

Front 57

PREEXISTING LEGAL DUTY RULE

Where one is under a preexisting legal duty to perform, performance of that same duty will ____ be sufficient consideration to support a promise to pay additional sums for the performance.

Back 57

PREEXISTING LEGAL DUTY RULE

Where one is under a preexisting legal duty to perform, performance of that same duty will NOT be sufficient consideration to support a promise to pay additional sums for the performance.

Front 58

PREEXISTING DUTY RULE

It does NOT apply when?

Back 58

PREEXISTING DUTY RULE

It does NOT apply:

When the preexisting duty is owed to a THIRD PERSON!!!

When there is an HONEST DISPUTE as to the duty!!!

When there are UNFORSEEN CIRCUMSTANCES sufficient to discharge a party!!!

When NEW OR DIFFERENT consideration is promised!!!

When the promise is to RATIFY A VOIDABLE OBLIGATION!!!

Front 59

Payment of a < sum than due on an existing debt is generally NOT sufficient consideration for a promise by the creditor to discharge a debt.

However, ...

Back 59

Payment of a smaller sum than due on an existing debt is generally NOT sufficient consideration for a promise by the creditor to discharge a debt.

However, courts will attempt to avoid this result by applying the EXCEPTIONS TO THE PREEXISTING DUTY RULE!!!

Front 60

A promise to refrain from suing on a claim may consistute consideration if:

Back 60

A promise to refrain from suing on a claim may consistute consideration if:

The claim is valid; or

The claimant in good faith believed the claim was valid.

Front 61

PAST OR MORAL CONSIDERATION

A promise given in exchange for something already done does NOT satisfy the bargain requirement.

EXCEPTIONS: ...

Back 61

PAST OR MORAL CONSIDERATION

A promise given in exchange for something already done does NOT satisfy the bargain requirement.

EXCEPTIONS: Where a past obligation is unenforceable b/c of a technical defense (ie. SOL), that obligation will be enforceable IF A NEW PROMISE is made IN WRITING or is PARTIALLY PERFORMED.

Front 62

FIRM OFFERS

Even w/o _____________, an offer by a ________ to buy or sell goods in a _______ WRITING that, by its terms, gives ___________ that it will be held ____ is NOT revocable during the time stated or for a __________ time if no period is stated.

NOTE: In not event may such period exceed ___ MONTHS!!!

Back 62

FIRM OFFERS

Even w/o CONSIDERATION, an offer by a MERCHANT to buy/sell goods in a SIGNED WRITING that, by its terms, gives ASSURANCES that it will be held OPEN is NOT revocable during the time stated or for a REASONABLE time if no period is stated.

NOTE: In not event may such period exceed 3 MONTHS!!!

Front 63

The "mailbox rule" does NOT apply to ________ K's.

Back 63

The "mailbox rule" does NOT apply to OPTION K's.

Front 64

PROMISSORY ESTOPPEL

This provides that a ________ that the promisor should reasonably expect to induce _______ or __________ on the part of the promisee, and which does induce such action or forbearance, is ________ if injustice can be avoided only by ________ of a promise.

Back 64

PROMISSORY ESTOPPEL

This provides that a PROMISE that the promisor should reasonably expect to induce ACTION or FORBEARANCE on the part of the promisee, and which does induce such action or forbearance, is BINDING if injustice can be avoided only by ENFORCEMENT of a promise.