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87 Cards in this Set

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  • Back
Definition of K
Legally enforceable agreement
Bilateral K
An offer that is open as to the method of acceptance: performance or return promise
When not bilateral (2)
1. reward, prize, contest
2. offer expressly requires performance for acceptance
1. sale of goods - which applicable law?

2. Services K - which applicable law?
1. UCC Art. 2

2. Common law
Does Article 2 require sale b/w non-merchants?
Which applicable law if K is both for goods and for services?

Mixed Deal rule - use whichever law for entire K which is appropriate for the more important subject matter

Exception: if K divides payment, then apply UC to sale of goods and comon law to rest
Checklist / Method for Formation of K
1. look for an agreement
2. determine whether K is legally enforceable
3. get info about
a. offer (initial communication)
b. termination of offer (what happens after a)
c. acceptance (who responds and how)
Definition of "Offer"

The Test
manifestation of an intent to contract (words or conduct showing commitment)

Test: would a reasonable person in the positiion of the offeree believed that his assent creates a K?
Must an offer contain all material terms?

1. Sale of real estate: price and description required (common law)
2. Sale of goods: No price requirement (Art. 2)
Does a K with "vague" or "ambiguous" material terms constitute an offer under UCC? under common law?

A K for sale of goods can state the quantity of goods to be delivered under the K in terms of buyer's ____ or seller's ___ or in terms of ____.

What are the magic words for this?
requirements; output; exlusivity

"all," "only," or "solely"
limitations to requirements contracts?
1. quantity not unreasonably disproportionate limitation on increases and
2. buyer can increase requirements so long as increase is in line with prior demands
Is an advertisement an offer?
Not generally.

1. if it is the nature of a reward.
2. if it is specific as to quantity and expressly indicates who can accept it
Methods of termination of an offer
1. lapse of time
2. words or conduct of offeror - revocation
3. words or conduct of offeree - rejection
4. death of a party prior to acceptance
Can an offer be accepted if it has been terminated?
What type of probably possibly if told (1) when offer received and (2) hen it was responed to?
Lapse of time
can an offeror revoke or reject an offer?
an offeror can REVOKE an offer
2 ways in which an offeror can revoke an offer
1. unabmiguous STATEMENT by offeror TO OFFEREE of unwillingness or inability to K
2. unambiguous CONDUCT by offeror indicating an unwillingness or inability to k THAT THE OFFEREE IS AWARE OF
Is an offer revoked when it is made available to a second party?
Using the mail, when does revocation of an offer become effective?
Once the revocation is received.
When can an offer NOT be revoked?
1. An option
2. Firm offer
3. detrimental reliance on offer by offeree that is reasonably foreseeable
4. start of perf. pursuant to an offer to enter into a unilateral K (during time reasonable to complete perf.)
Requirements for option for an offer
1. if offeror has promised to keep offer offer open AND
2. this promise is supported by payment or other consideration

NOT MERELY: written promise to sell to a specific buyer
Requirements for a firm offer?

How long?
1. offer to buy or sell goods,
2. signed, written promise to keep offer open, and
3. party is a merchant
Required time to keep offer open: 3 months
For almost all of K, what is a merchant?
a person in business - doesn't matter what type.
For part performance of an offer, prohibiting revocation, does any preparation represent performance?
No. mere preparation is not performance. if doubt, it's probably preparation.
counteroffer, conditional acceptance, additional terms (common law only).

These all represent what?
Offer rejection.
a response to an offer with magic words "if" "provided" so long as" "but" or "on condition that" represents what?
a counter offer.
What rule name: an acceptance that ads new terms is treated like a counteroffer rather than acceptance.
mirror image rule.
Treatment of additional terms under UCC, including title.


Provision Chapter
New terms are a "seasonable expression of acceptance." Reqs:
1. response to offer adds new terms that are not a condition of acceptance (otherwise counter-offer)
2. both parties are merchants (otherwise proposal)
Chapter: UCC 2-207
Exceptions to UCC add'l term treatment in offer acceptance

Language included in proper answer
-add'l term...
1. cannot materially change the offer OR
2. not part of K if offeror objects to the change
-Language: "unless there is a material change"
Exceptions to termination of an offer by death of a party prior to acceptance
1. option
2. part performance of offre to enter into unilateral K
admission by D of guilty act in question. Hearsay exemption or exception?
can silence be deemed an admission by a party?
Yes, where it is a situation where a reasonable person would have responded to an accusation.
a declaration of a present bodily injury. Hearsay?
Statements relating to symptoms, such as pain are exceptions to hearsay.
when there's a presumption of A unless B, and no evidence offered of not B, who must find in accordance with the presumption? The judge or the jury?
The Jury.
Is character evidence as proof of conduct admissible in a civil case?
No, unless character is directly at issue (defamation)
Under common law, is consideration required to modify a K?
Not where the parties are modifying merely to correct an error in the original K.
Statute of frauds prevents or enforces a K?
prevents - it's a defense
what is promissory estoppel?
a promise that the promisor should reasonably expect to induce actino 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 the promise
when is quasi contract appropriate?

1. P has conferred a benefit upon D
2. P reasonably expected to get paid AND
3. D would be unjustly enriched if P were not compensated
Is an advertisement generally an offer?
No, it's an invitation seeking an offer, but courts will look to surrounding circs.
For sale of goods, is a promise to modify an existing contract enforceable w/out consideration? But what does it require?
Yes, no consideration is necessary.

But it requires good faith.
Exception to UCC provision permitting add'l terms in a K b/w merchants to become part of the K when acceptance does not mirror the offer
if offeror notifies the offeree w/in reasonable time after receiving the acceptance that he objects to the new terms, K formed according to terms of the offer.
Who can accept an offer?
Only (1) a person who knows about the offer and (2) who is the person to whom it was made.
Test for determining if response to offer is a mere inquiry or a counter offer.
Wheter a reasonable person would believe that the offer was being rejected.
Fact patterns of acceptance (5)
1. offeree fully performs (normally geography)
2. offeree partially performs
3. offeree promises to perform - cannot be unilateral K
4. offeror and offeree are in diff. places and there's conflicting comm'cns
5. seller sends the wrong goods
Can you always accept an offer by completing performance?
Yes, but must give notice to offeror. Usually a geography issue.
Extent of performance required for acceptance of bilateral and unilateral offer.
bilateral: start of performance (treated as an implied promise)

unilateral: full performance
Rule for effectiviness of communications concerning (1) acceptance and (2) revocation
1. acceptance: when sent if
a. made in a manner and by means invited AND
b. offeree has not already sent a rejection
2. revocation: effective when received
when offeree sends a rejection and then an acceptance, which communication controls?
whichever gets there first.
Options and repurcussions where seller sends the "wrong" goods
1. sends the wrong goods and nothing else --> acceptance & breach
2. accomodation (inclusion of explanation) --> no breach, buyer can reject (seller gets goods back)
Definition of consideration
bargained-for legal detriment
Methodology for consideration questions
1. identify promisor (D)
2. ask promisor bargained for
3. identify promisee (P)
4. ask what detriment she incurred
forms of consideration
1. performance (doing something not legally obligated to do)
2. forbearance (not doing something legally entitled to do)
3. promise to perform
4. promise to forbear
Does past consideration count as consideration? Exceptions?

Exception: where action is expressly requested and there is the expectation of payment
pre-existing contractual duty under common law
Rule: promise to perform or performance of existing legal duty will not be sufficient consideration
-Exception1: New or different consideration promised (ex: accelarating perf.); includes modification of existing K
-Exception2: promise to perform a voidable obligation needs no consid.
Exception3: unforseen difficulty so severe as to excuse performance
Exception4: pre-existing duty owed to 3rd party
is partial payment for for debt that is due and undisputed consideration for a release from the debt? What about for debt not yet due?

For debt not yet due, partial payment prior to due date can be satisfaction for the debt. Debt difference becomes no longer enforceable.
Is a written promise to satisfy an obligation for which there is a legal defense enforceable w/out consideration?

Example: where SOL bars specific debt collection, and debtor promises to pay part of that debt, there is no consideration for the new promise. So the party owed money can enforce the promise for the debor to pay the new amount!
Persons who lack capacity
1. Under age 18
2. mental incompetents - lack ability to understand agmt
3. intoxicated persons, if other party has reason to know
Consequences of incapacity (3)
1. person without capacity has right to disaffirm at any time
2. There is an implied affirmation by retaining benefits after gaining capacity
3. There's still liability for necessities
What is the effect of the Statute of Frauds?
They make it harder to claim falsely that there is a K through false or fraudulent claims by requiring "special" proof that K exists. When a Contract is within the SOF, special proof in performance or in writing of the K is required.
Kinds of K's covered by statute of frauds
1. Promise in consideration of marriage.
2. Promise by executor or administrator to answer for for debt of decedent
3. Another promises to creditors to "answer for" [guarantee] the debts of another
4. Service K not capable of being performed w/in a year from tiem of K
5. Transfer of interest in real estate of a term of more than a year
6. sale of goods for $500 or more
7. leases of goods w/the payment totaling $1000 or more
Methodology for Statute of Frauds (2)
1. Does the K fall w/in the SoF?
2. If so, is the SoF satisfied?
SoF required: ________ of marriage.
Promise in consideration
SoF required: _____ by executor or administrator to _________.

pay answer for debt of decedent
SoF required: Another _______ to creditors to ________.

answer for [guarantee] the debts of another

guarantee = promise to pay if someone else does not.
SoF required: Service K ________.
not capable of being performed within a year FROM TIME OF K.

Any more than one year --> SoF applies.

John Tesh
SoF required for: _____ in real estate ____.
transfer of interest (not any real estate deal)

for a period more than 1 year
SoF required for: sale of goods for $_____.
$500 or more.
What kind of problem? Told:
1. told time of the K
2. told specified performance time
3. and there's more than 1 year b/w T1 and T2
John Tesh! SoF.
Where debt being guaranteed by 3rd party is a debt incurred to benefit the guarantor, w/in SoF?
No, b/c promise to repay is more credibile.

Ex: P is painting H's house, using paint P buys from S on credit. P fails to pay S, so H promises S that if S continues to provide paint to P, H will pay IF P FAILS TO PAY.
P claims that O agreed to employ her for a year, starting next month. K w/in SoF?
yes - John Tesh modified.
If statute of frauds is satisfied, is there a statute of frauds defense?
How to satisfy SoF with a performance and service K?
1. put it in writing
2. FULL performance by either party (part performance doesn't do it!)
How to satisfy SoF with a sale of goods K?
1. put it in writing
2. part performance, but satisfies only for those goods that have been delivered; no SoF defense for the goods that have not been delivered

Exception: for custom manufactured goods, SoF satisifed as soon as seller makes a substantial beginning (done enough work that it is clear that she is working on the order)
How to satisfy SoF for performance and transfers of interests in real estate?
1. put it in writing
2. "part performance" by buyer of real estate by showing 2 of 3 : (1) full or part payment, (2) possession and/or (3) improvements.

Note: full payment alone by buer does not satisfy SoF!
Requirements for a writing to satisfy the SoF under common law
1. looking at contents of writing or WRITINGS, all material terms test [who and what] AND
2. who signed the writings - signed by the person charged (D)
Requirements for a writing to satisfy the SoF under UCC
1. contents of writings and who signed the writing
2. quantity included

Acceptable "I agree to buy 17 dolls. s/.Richard Conviser"

Exception: Writing needn't be signed by defendant where:
1. both parties merchants AND
2. person who receives a signed writing w/a quantityt term that claims there is a K fails to respond within 10 days of receipt.
When does authorization for someone to enter into a K for someone else need to be in writing?
If the K to be signed is w/in the SoF. (i.e. the authorization must be of "equal dignity")
How to address contract modifications, in light of SoF?
1. look at the deal with alleged change
2. determine whether the deal with the alleged change would be w/in the SoF

If Y --> the alleged modification agreement must be in writing (subject to SoF)
If an agreement in writing requires all modifications be in writing, is this a valid requirement?
For common law (service), K provisions requiring all modification be in writing are not effective

Under the UCC (sale of goods), such provisions are effective unless waived.
1. If subject matter is illegal -->

2. If subject matter legal but purpose illegal -->
1. K is void

2. K is enforceable only by the person who did not know if the illegal purpose
Where false assertion of fact or concealment of fact that ___, the honest party can ____.
induces the K

rescind the K
Misunderstanding or ambiguity in words

1. parties use a material term that is open to at least two reasonable interpretation
2. each party attaches a different menaing to the term AND
3. neither party knows or has reason to konw the term is open to at least 2 reasonable interpretations
--> no K
For mutual mistake of material fact what result under what reqs?
No K if
1. both parties mistaken
2. BASIC assumption of fact (parties reach erroneous conclusion on its own)
3. MATERIALLY affects the agreed exchange
4. not a risk that either party bears
Can a bad value give rise to a mutual mistake of material fact?
Exceptions to rule, barring K duties for a unilateral mistake
1. "palpable" mistakes - where other party to K knows or should have known of the mistake
2. mistakes discovered b/f significant reliance by the other party