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41 Cards in this Set
- Front
- Back
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Contracts governed by UCC
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The UCC will govern contracts where the subject matter is goods.
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Goods (def)
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Goods means all things which are moveable at the time of identification to the contract for sale.
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Elements of a valid contract
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A valid contract consists of an offer, acceptance, consideration, and lack of formation defenses.
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Offer (def.)
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An offer is a manifestation of present contractual intent, communicated to an identified offeree, containing definite and certain terms.
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Definite and certain terms rule (majority)
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An offer need only state the subject matter of the contract with definiteness and certainty.
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Definite and certain terms rule (minority--QTIPS)
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An offer has to state all the material terms of the contract:
Quantity time for performance interested parties price, and subject matter. |
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General rule for termination of offers
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All offers are freely revocable before acceptance
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Acceptance (definition)
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An acceptance is an unequivocal assent to the terms of an offer.
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Consideration
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A legally sufficient, bargained-for exchange, which induces current performance, is a detriment to the promisee, and a binding obligation on both parties.
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Irrevocable offers
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1. option contracts
2. Merchant's firm offer 3. Detrimental reliance |
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Option contract rule--consideration
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The offer must be supported by consideration
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Merchant's Firm Offer rule
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A writing signed by a merchant which gives assurance that the offer will be held open is not revocable for lack of consideration during the time stated.
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Detrimental reliance rule
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If the offeree relies on the offer, and that reliance is detrimental, reasonable, substantial, and forseeable, the offer must stay open for a reasonable time.
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Revocability of unilateral contract
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Once the offeree has begun to perform a unilateral contract, the offeror cannot revoke his offer.
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Preparation for performance
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Preparation for performance is not a performance that will make an offer irrevocable in a unilateral contract
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Crossing Offers
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Crossing offers that contain identical information do not result in mutual assent, so no contract is formed.
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Mailbox rule
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Acceptance is effective on dispatch.
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Method of acceptance
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If acceptance is not sent in the required manner, no acceptance.
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Unauthorized method of acceptance
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If the acceptance is sent in an unauthorized manner, there is an acceptance, but it is effective on receipt.
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Improper address
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There is an acceptance, but it is effective on receipt.
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Post-acceptance-rejection
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If the acceptance is sent first and then a rejection and the rejection is received first, the Mailbox Rule applies and contract is formed.
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Post-rejection-acceptance
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If the rejection is sent first and then an acceptance is sent, the Mailbox Rule does not apply and whichever get to the offeror first will be effective.
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Mirror image rule
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Under Common Law, the acceptance must be a "mirror image" of the offer. Any additional, different, or missing term results in a rejection and counter-offer.
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Last shot rule
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The last expression before performance controls
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Last shot rule illustration
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Parties exchange rejections/counter-offers. One party does not return a rejection/counter-offer but performs. Courts find an implied acceptance by performance by the party that did not return the rejection/counter-offer.
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UCC 2-207(1) Additional terms in Acceptance
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An acceptance with additional or different terms is still a valid acceptance.
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UCC 2-207(1) Conditional offers
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Even under the UCC, a conditional acceptance is a rejection/counter-offer.
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Revocation
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Revocation of an offer is effective on receipt.
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Indirect revocation
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Occurs if an offeree receives correct information from a reliable source that the offeror no longer wants to be bound to the offer.
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Rejection of offer
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If the offeree communicates to the offeror that the offeree is not interested in the offer, then the offer is terminated.
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Counter-offer
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Counter offers act as rejections
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Conditional Acceptance
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Conditional acceptance is always a counter-offer under the Common Law and the UCC.
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Option Contracts--rejection of offer
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If the offeree communicates to the offeror that the offeree is not interested in the offer, the offer is not terminated.
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Option Contracts--rejection of offer--estoppel
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If the offeror detrimetally relies upon the rejection of an offer of an option contract, the offeror may raise estoppel as a defense to enforcement
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Mailbox rule and option contracts
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The mailbox rule does not apply to option contracts.
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Acceptance of option contracts
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The acceptance of an option contract is effective not on dispatch, but on receipt by the offeror.
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merchant (def)
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A person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction.
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Modification (def)
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A valid contract exists but a party wishes to change the terms of the existing contract.
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Acceptance with additional terms UCC 2-207(2)
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As between merchants, the additional terms become part of the contract unless:
1. The offer limits acceptance to the terms of the offer 2. The offeror objects in a reasonable period of time; or 3. the terms materially alter the contract. |
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Acceptance with different terms (majority rule--knockout rule)
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The different terms get "knocked out" and one applies gap fillers, custom and usage and course of dealing or performance.
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Acceptance with different terms (minority rule)
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The different terms in the acceptance are ignored and the terms of the offer control
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