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30 Cards in this Set

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Express contract
Parties expressley agree to be bound
Implied in fact contracts
When the parties agree upon the obligation to be incurred, their intention are inferred from their acts in light of the surronding circumstances
2 part test of assent
Objective: What a reasonable person would construe the conduct to be assent
Subjective: What P construed the conduct to be assent
Rules/Conduct of assent
Restatement 19
1. Manifestation of assent can be implied or expressed
2. The party must intend to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents
3. The conduct of a party may manifest assent even though he does not in fact assent
offer
an expression of present willingness to enter into a baragin
Definiteness in terms
subjetc matter, price, quanity
Invitation
When an expression reflects merely intent to baragin
Advertisements
Most ads are invitation except:
(i)clearly indicates intent
(ii) invited people to do a specific performance w.o further comm
(iii)over acceptance is likely
certanity Res. 33
offer can only be accepted to form a contract if the terms are reasonable certain (provide bases for determining the existence of a breach and give a remedy)
Texaco's 4 factors for discerning an intent to be bound
1. Whether the party expressly reserved the right to be bound only when a written agreement is signed
2. Whether there was any partial performance by one party that the party disclaiming the K accepted
3. Whether all essential terms of the alleged K had been agreed upon
4. Whether the complixity or magnitude of the transaction was such that a formal executed writing would normally be expected
Revoking an offer
- direct communication or
-indirect: if offeree obtains reliable information that the offeror has revoked
-unilateral: offeror can revoke a contract before it is competely performed
-option contract: offeror can never revoke and offeree can revoke except if it is a commercial setting
Acceptance
- commitment, may not be conditional,may not have vatriations.
- Usually need to communicate to the offeree you accept
Mirrior image rule
the acceptance has to reflect the terms of the offer if not it is a counter offer or a rejection in general
Mailbox rule
As soon as it is put in the mail it is an acceptance
(does not apply to option contracts)
Bilateral
both make promises
unilateral
The offeror makes a promise and the offeree renders performance as acceptance
-Old rule: must complete performance befor party's are bound
-Modern rule R 45: if offeror begins performace or tender it forms a option K and offeror can't revoke
Carbolic Smoke rules
1. Where an offer invites an offeree to accept by performace, no notification necessary unless the offer request notification
2. If the offeree excepts by performance has reason to know that offeror has no adequeate means of finding out w/ reasonable promptness and certanity, offeror has no duty except when:
-offeree uses reasonable dilligence to notify
- the offeror learns of the performance within a reasonable time
- offer indictates notification is not required
Acceptance by silence or exercise of dominion R 69
When an offeree is silent, his silence is acceptance when:
1. Offeree takes the benefit of the baragin.
2. Offeror has stated or given reason to understand assent may manifest by silence
3. Offeree exercises dominion
4. Previous dealings, it is reasonable to notify
Restatement 201: whose meaning prevails
Modern Rule of Raffle
1. Subject intent is fine if the parties understand the meaning
2. Unilateral Mistake- if 1 party belives their was a possibility of ambiguity= protect naive party
3. Mutual-if both misunderstand= neither party bound by the meaning
Knock out rule
If an issue is covered one way in the offer and a conclicting way in the acceptanct. Courts can have the conflicting meanings knock each other out of the K. UCC gap filler are used or common law controls
Ways to interpret meaning in contracts of goods
UCC 2-208
1. Look at the contract
2. See how the parties previously performed in the K
3. See how the parties acted in other K settings
4. Look to industrial trade practices
Agreements to agree
R 204
Courts will usually supply missing terms if the parties intetionally leave a term to be agreed upon later
Illusionary Promises and Requirement K
One parties promise is illusionary and left to complete discretion Court says party must act in good faith
Contracts of adhesion
like box top warranties, non baragained clauses that are favorable to the drafter
Additional Terms UCC 2-207
1. It is acceptance eventhough it states additional terms, unless acceptance is expressly made conditional on assent to the additional terms
2. Additional terms are proposals. B/W merchants terms are part of K unless:
a.expressly limits accpetance to the terms
b. Materially alter
c. objection to terms has already been given
3. Conduct of parties = K even though writings do not
Expectation Damages
Put the promisee where he would be had the promsie been performed
- Default measure of damages
Damages= loss in value + incidenetal & consequential loss - cost avoided
Reliance
Put the promisee where he would be had the promise not been made
- Use if promsiee had a lot of out of pocket expense in reliance of the promise, losing K
Damages =Expenditures made in preparation for performance or in performance - any loss (that the breaching party can prove) that the injured party would have suffered if contract performed
Restitution
Put the promisor where he would be had the promise not been made
-Use if there is losing contract and to prevent unjust enrichment
Damages= Market value
Limits on Damages
Foreseeability
-damages arising naturally to the usual course of breach
-Party was put on notice at the time the K was made

Certainty of Harm
-Only get damages that are reasonably certain

Avoidability
-avoid whatever you can to mitigate w/o undue expense
Essential Reliance
Reliance damages that arise from a promisee's performance of his end of the baragain