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53 Cards in this Set
- Front
- Back
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Types of Contracts
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Unilateral and Bilateral
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Under what three situations may a contract not come to force?
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If it is void, if it is voidable, or if it is unenforceable
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Define a Unilateral Contract
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Completion by performance is the only manner of acceptance of the offer. A duty to perform is created in only the promisor.
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What type of contract is created by the offer of a reward?
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Unilateral
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Define a Bilateral Contract
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Where there is a promise to perform by both parties, and a duty to perform created in both parties.
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If a contract calls for acceptance only by the beginning of performance, what kind of contract has been created when performance begins?
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A bilateral contract. The beginning of performance is an implied promise to complete performance.
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Under what situation is a contract void?
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When the contract is one to illegal performance. The performance has to have been illegal from the onset.
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Under what two common situations is a contract voidable?
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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.
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Under what situations is a contract unenforceable?
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If it is unenforceable under the statute of limitations or under the statute of frauds.
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What is the underlying principle behind the idea of an offer?
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It creates in the offeree the power of acceptance
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What type of express language will create an offer?
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I offer, I quote for immediate acceptance
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Is the test of whether something was an offer a subjective or objective test?
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Its objective, you look at the external manifestations of the offeror
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Does the fact that the offeror was bluffing preclude the enforcement of an acceptance by the other party?
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No, external manifestations of the offeror are all that matters.
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Under what situations may an offer be manifested?
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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.
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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?
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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).
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Generally, are advertisements construed as an offer?
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No, advertisements are generally construed as too indefinite to be an offer.
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When may an advertisement be construed as an offer?
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When the terms are sufficiently definite in terms of who may accept, quantity, and product.
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For an offer to be sufficiently definite is must contain two things, name them.
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A specification as to who may accept and terms sufficiently definite.
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In a real estate transaction, what would definiteness of terms require?
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A sufficiently detailed description of the land to be purchased and a price.
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In the sale of goods, must a contract always state a quantity?
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No, a contract for goods may also be based on requirements and output.
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What is a requirements contract?
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A requirements contract is based off of the good-faith needs of the other party.
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What is an output contract?
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An output contract is based on the purchaser agreeing to receive the good faith output of a producer of goods.
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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?
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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.
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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?
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No, a contract for employment with no time frame stated creates employment terminable at will.
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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.
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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.
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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.
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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.
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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?
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Whether there are any reasonable terms that may cure, whether past performance may give insight to a more definite term, and any industry standards.
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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?
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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.
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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?
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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.
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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
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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.
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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?
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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.
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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?
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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.
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When is revocation effective?
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When received (or when published when the revocation is for an ad).
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When may an offeror not revoke an offer?
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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)
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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?
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A has breached. B's consideration creates a binding promise in A to leave the offer open for two days.
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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.
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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
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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?
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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.
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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?
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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).
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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?
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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.
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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?
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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.
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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.
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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.
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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?
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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.
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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?
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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.
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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?
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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.
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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.
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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.
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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?
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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.
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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?
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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.
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What are the three instances in which an offer may be terminated by operation of law?
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Death or insanity of offeror, destruction of the subject matter (Maserati hit by a meteor), proposed contract becomes illegal.
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Who may accept an offer?
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The party to whom the offer is directed.
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May the assignee of an offeree accept an offer for the offeree?
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No, only the offeree may accept an offer.
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Under the common law, is an acceptance on different terms an acceptance?
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No, under the common law, such an acceptance is a counteroffer.
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What is the mirror image rule?
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The common law rule that an acceptance must exactly match the offer.
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Under the UCC for a sale of goods, does the acceptance need to exactly match the offer?
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No.
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