Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

53 Cards in this Set

  • Front
  • Back
Types of Contracts
Unilateral and Bilateral
Under what three situations may a contract not come to force?
If it is void, if it is voidable, or if it is unenforceable
Define a Unilateral Contract
Completion by performance is the only manner of acceptance of the offer. A duty to perform is created in only the promisor.
What type of contract is created by the offer of a reward?
Define a Bilateral Contract
Where there is a promise to perform by both parties, and a duty to perform created in both parties.
If a contract calls for acceptance only by the beginning of performance, what kind of contract has been created when performance begins?
A bilateral contract. The beginning of performance is an implied promise to complete performance.
Under what situation is a contract void?
When the contract is one to illegal performance. The performance has to have been illegal from the onset.
Under what two common situations is a contract voidable?
Infancy (below the age of majority) and Mental illness. A contract may also be voidable if one party was intoxicated to the point of mental incapacity AND the other party had reason to know of the intoxication.
Under what situations is a contract unenforceable?
If it is unenforceable under the statute of limitations or under the statute of frauds.
What is the underlying principle behind the idea of an offer?
It creates in the offeree the power of acceptance
What type of express language will create an offer?
I offer, I quote for immediate acceptance
Is the test of whether something was an offer a subjective or objective test?
Its objective, you look at the external manifestations of the offeror
Does the fact that the offeror was bluffing preclude the enforcement of an acceptance by the other party?
No, external manifestations of the offeror are all that matters.
Under what situations may an offer be manifested?
Express (I offer, I quote for immediate acceptance), Implied (due to prior relationship of the parties), through Express Advertisements (that identify specifically who gets what), and where customs in the industry dictate.
A has for the past two years engaged in business with B for the purchase of office supplies. Each time A calls B and leaves a voice mail stating what they wish to purchase. Each time B has shipped the order within 2 weeks. B does not respond this order, and does not send any shipment within 2 months. What result?
B is in breach. Past conduct of the parties warrants B's silence as assent to the offer that B puts forth for office supplies and that they be shipped within a reasonable time (determined by past conduct).
Generally, are advertisements construed as an offer?
No, advertisements are generally construed as too indefinite to be an offer.
When may an advertisement be construed as an offer?
When the terms are sufficiently definite in terms of who may accept, quantity, and product.
For an offer to be sufficiently definite is must contain two things, name them.
A specification as to who may accept and terms sufficiently definite.
In a real estate transaction, what would definiteness of terms require?
A sufficiently detailed description of the land to be purchased and a price.
In the sale of goods, must a contract always state a quantity?
No, a contract for goods may also be based on requirements and output.
What is a requirements contract?
A requirements contract is based off of the good-faith needs of the other party.
What is an output contract?
An output contract is based on the purchaser agreeing to receive the good faith output of a producer of goods.
A has a contract with B to purchase all of its output of widgets. In year 1 B produced 10000 widgets, with production increasing by 10% each year. In year 5, B produces 1M widgets. If A refuses to accept all 1M widgets, what result?
A will not be found to be in breach as B's output unreasonably spiked well beyond its normal course of delivery. Anything far outside of a 10% increase in the number of widgets would be found to be not in good faith.
A agrees to an employment contract with B for a pay rate of 9.10 an hour. The contract states no time frame for A's employment. Does the contract fail for indefiniteness of terms?
No, a contract for employment with no time frame stated creates employment terminable at will.
A and B enter into a contract where A is to supply 1000 tons of iron ore to B. The parties fail to stipulate a price and A ships the ore to B. B then refuses to pay A's asking price for the ore, stating that the contract was never created due to indefiniteness of terms. What result.
The contract was formed even though a price was not stated as the parties never manifested an intention to not be bound if no price was agreed upon. Thus a reasonable price is inferred and B will be found in breach if he doesn't pay.
A and B enter into a contract where A is to purchase 10000 furbies at $10/unit from B to stock his chain of toy stores. The parties agree in Jan 2005 and A still has not received its shipment from B. A brings an action against B for specific performance and B answers stating that there is no contract due to indefiniteness of terms as there was no time frame stipulated. What result.
B will be found to be in breach as the contract was formed though a time frame was not stated. Where no time frame is stated, a reasonable time frame is inferred.
Where a contract is found to be unenforceable due to vagueness of terms, what may the court look to in order to cure the defect?
Whether there are any reasonable terms that may cure, whether past performance may give insight to a more definite term, and any industry standards.
A and B enter into a contract for B to sell A the empire state building. They agree upon a price of "a whole lot of gold or 4 billion dollars, whichever A chooses." A then pays B 4 billion dollars but B does not deliver the deed to the empire state building, stating that the contract was never formed due to the vagueness of terms in the offer. What result?
A wins. The contract was formed when A made the choice of the definite term. If uncertainty is because of a choice, the defect is cured when the other party makes the choice.
A enters into an agreement to sell "300 motor vehicles" to B at $10,000 per vehicle. A does not ship any motor vehicles and B brings an action for specific performance. What result?
No contract will be found to have been formed between A and B. Had the defect only been the price, the UCC could have filled in a price. However, the indefiniteness was to a material term other than price of the agreement and thus no contract is formed.
A posts an ad in the Stranger offering to sell 3 Maseratis at 1/2 the list price 1 month from today to the first three takers. B reads the ad. A then realizes his error and posts an ad in the next week's Stranger to this regard. B does not read this ad. B then shows up at the time and place specified and A tells B that he can only sell him the Maserati for 3/4 the list price. What result
A will not be found to be in breach. A's publication of the revocation in the same weekly that the ad was originally run in was a revocation of the offer. The fact that B did not read the revocation does not affect its effectiveness.
A offers to sell B Blackacre for $100,000. B calls A to accept, but before he can, A tells B that he no longer wished to sell Blackacre. B brings an action for specific performance. What result?
A prevails. The express revocation by A before the express acceptance by B takes. Note: Had B mailed an acceptance and then called A to tell him about mailing it and A tried to revoke, B would prevail under the mailbox rule.
A offers to sell his contracts book to B for 10 dollars. B, looking for A to accept, asks around. C tells B "I think he went to his locker to get the contracts book he just sold me." B then finds A at his locker and says "I accept your offer to sell me the contracts book." A informs him that its already been sold. What result?
B, in learning through a reliable third person that the offer was no longer available, reasonably knows that the offeror no longer wished to make the offer. Thus, the offer was effectively revoked. Note: Had B not run into C and accepted A's offer before A revoked, A would be in breach to either B or C.
When is revocation effective?
When received (or when published when the revocation is for an ad).
When may an offeror not revoke an offer?
When there has been consideration to leave it open, when it is an offer for sale of goods (must be left open for a reasonable time OR time stated in offer), when there has been detrimental reliance by the offeree (submission of bids, must be left open for a reasonable amount of time), or when there has been part performance on true unilateral contracts (must be left open for reasonable time to complete performance)
A offers to sell B his bitchin Camaro for $500. B says he has to think about it...but offers to lend A his Whitesnake bootlegs if he will give him a couple days to consider it. B gives the Whitesnake bootlegs to A and A accepts them. B goes back a day later to buy the Camaro and learns A has sold it to C. What result if B brings suit against A?
A has breached. B's consideration creates a binding promise in A to leave the offer open for two days.
A writes B offering to sell B 3000 swatch watches. B calls A to accept the offer as soon as he gets the letter. Before B can state his acceptance, A tells B he has revoked. B sues A, what result.
A will be found to be in breach and B will be entitled to the cost of getting the swatches elsewhere minus the contract price
A writes B offering to sell him 27 oak rolltop desks. B not knowing if his lease will be renewed or if he will have to move next month really wants the desks. The next day he writes A back asking if A can leave the offer open. A writes B saying he will leave the offer open for 2 months, signs, and sends the letter. B receives the letter. 1 month later, B learns his lease is renewed and calls A to accept. A tells B he has revoked the offer. What result?
A will be found to be in breach. When he sent the second signed writing to B saying he will leave it open, he has made a firm offer for the sale of goods.
A bids on a contract to install plumbing on B's contract to build a house. B wins the contract and calls A to accept the bid. A tells B he has revoked before B can accept. What result?
A will be found to be in breach. In making a bid, he knew that the general might rely on that bid, and such reliance is sufficient to keep the offer open for a reasonable amount of time (most likely within a short time after the general contract award).
A offers to give B 100 dollars to pull his jeep out of a ditch. B hooks up to A's jeep and A tells B that he no longer wishes B to pull his jeep out. What result?
By beginning performance, A is not bound to leave the offer open for a reasonable time to allow B to finish performance. If A revokes, B will be entitled to reliance costs.
A contracts with B to perform renovations on 3 rooms in his house. B finished the first room and A decides that he would rather have another contractor renovate the other two rooms. What result if B sues A for breach?
A will prevail. Where several tasks can be separated, the partial performance will only bind as to leaving that particular task open for a reasonable time.
A wants a very specific lattice built and contracts B to build the lattice to A's specifications with A's approval upon completion. B finishes the lattice but A does not approve. B sues A for breach.
A is not in breach for the contract, but B has given partial performance (A's acceptance is the final part of the unilateral contract). B is entitled to the reliance costs.
A offers to sell B 200 frogs at 200 dollars a frog. B tells him "Hell no!" and hangs up the phone. B calls around and finds the going rate for frogs is $210. B calls A and says, "I've reconsidered, I accept your offer." A says, "I don't like people saying Hell, I'm not going to sell you the frogs." What result?
When B told A "Hell no!" he expressly rejected the offer, thus he had no further ability to accept an offer, and his later acceptance was an offer to A to renew the prior offer to him.
A calls B and offers to sell him 42 blankets for 100 dollars a piece. B tells A, "Not for 100 dollars, I'll only buy them for 90." A hangs up on B. B calls back and says, "Okay, you drive a hard bargain, I'll accept the $100 price." A says, "You have insulted my blankets, no deal." B sues A. What result?
When B made a counteroffer to A, it was a rejection of A's offer and a new offer to A. Thus, B could no longer accept and A was justified in turning down any deal.
A writes B offering to sell him 100 gross of bricks at $1000 a gross. B writes back rejecting the offer and mails it to B. B remembers that A's bricks are top notch, and that the price was actually a great deal. The next day, before the mailman comes, B calls A and accepts the offer. A gets the mail while he's on the phone with B to work out the shipping date, and gets the rejection. A tells B that he doesn't like wafflers, and rescinds the offer. What result?
The rejection by B was only effective when received by A. Thus, when B called A to accept before the revocation by B was received, the acceptance was operational, and the rejection ineffective. A will be in breach.
A writes B offering to sell a boat for $100K. B puts a deposit on the boat. B calls A 2 days later and asks if he'd be willing to sell it for 80K instead. A tells him no. A then tells B he's insulted at the thought and won't sell him the boat. B tells A he'll buy it at the 100K price. What result.
The consideration given to leave the offer open is operative regardless of whether B's statement was an express rejection, a counteroffer, or an inquiry. Had there been no consideration and it was still a reasonable time for acceptance, B's inquiry would not count as a rejection and he would still be empowered to accept A's offer at 100K.
A tells B that he'll sell him his Vespa for 300 dollars. B says he has to think about it and gives A a 20 dollar deposit. B later decides he doesn't want it, and calls A to tell him so. The next day, before getting his 20 bucks back from A, B decides he wants the Vespa and calls A to accept. A tells B he sold the Vespa 4 hours after B's call. What result?
B's rejection normally would be ineffective due to the consideration to leave it open. However, A's reliance on B's rejection is sufficient to bar B's recovery of damages from A.
A writes B to offer him a time share in New Jersey. B gets the letter, and a year later decides he wants the time share. B writes A to accept the offer on the time share. A refuses to sell the time share. What result?
Where no time is stated on an offer, the offer must be left open for a reasonable time. B's failure to respond in a reasonable time operated as an rejection of A's offer.
What are the three instances in which an offer may be terminated by operation of law?
Death or insanity of offeror, destruction of the subject matter (Maserati hit by a meteor), proposed contract becomes illegal.
Who may accept an offer?
The party to whom the offer is directed.
May the assignee of an offeree accept an offer for the offeree?
No, only the offeree may accept an offer.
Under the common law, is an acceptance on different terms an acceptance?
No, under the common law, such an acceptance is a counteroffer.
What is the mirror image rule?
The common law rule that an acceptance must exactly match the offer.
Under the UCC for a sale of goods, does the acceptance need to exactly match the offer?