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33 Cards in this Set
- Front
- Back
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Mutual assent |
In addition to consideration, for a contract to be enforced, the parties need to have mutual assent. Mutual assent ordinarily takes the form of an offer by one party that is accepted by another. This is also known as a meeting of the minds. Also, the parties cannot attach materially different meanings to the offer and acceptance. |
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Determining mutual assent |
There are two ways to determine mutual assent, however the majority view is to look at the situation objectively. It focuses on whether the actions of the parties make it look like they intended to be bound. If one party is an idiosyncratic bargainer, they need to disclose their odd needs to their bargaining partner. |
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Instant retraction |
A party cannot instantly retract from a contract even if there has been no reliance because there is no way of really differentiating between time periods that would be considered valid for retracting. |
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Offer |
A manifestation of willingness to enter a bargain so made as to justify another in understanding that their assent is invited and will conclude it. Objectively, we need to ask whether a reasonable person would believe that an offer was being made for which assent could be manifested. |
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Advertisement |
This will usually be construed as an invitation for offer, unless it uses clear, definite, and explicit language that leaves nothing open for negotiation. |
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Acceptance |
A manifestation of assent to the terms made by the offeree in a manner invited or required by the offer, or in anyway or medium reasonable in the circumstances. |
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Bilateral contract |
A bilateral contract occurs when there is acceptance by return promise. Here, liability attaches the moment the return promise is accepted. While return performance is usually considered part of a unilateral contract, a promise to perform can be considered part of a bilateral contract as well. A bilateral contract requires notification to offeror by exercise of reasonable diligence. |
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Unilateral contract |
A unilateral contract occurs when there is acceptance by return performance. Legal liability and contract formation do not occur until the performance has been completed. To avoid strategic behavior, one cannot revoke the offer when offeree is working diligently to complete the performance, the promisor may not revoke the offer. Notification is not required, unless offer requests such notification. |
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Silence as acceptance |
The practices of specified business or industry, or the course of dealing between two parties over a period of time may include silence as an established method of acceptance. It can also occur where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation. |
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Acceptance by mail |
Once the acceptance is placed in the mail a contract is formed an liability attaches. |
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Irrevocable offers (R2d) |
These occur when parties enter into a deal and want to keep it open for an extended amount of time. In order for this to occur, the parties buy an option (create consideration), which makes the offer irrevocable for a certain period of time. Some offers are irrevocable based on the context within which they are made. |
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Irrevocable offers (UCC) |
With the sale of goods an option is not needed for contract to be irrevocable as long as the offer is in writing and it stays for the time stated or reasonable time (3 months); whichever is sooner. |
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Drennan Rule |
If there was reliance on the offer due tot he context within which it was made, then the offer is irrevocable (PEI v. Johnson). |
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Offer and counter offer |
A counter offer is an offer made by the offeree to the offeror relating to the same manner as the original offer and proposing a substituted bargain. At common law a counteroffer is considered a rejection of the original offer, unless the parties opt out of the default rules and provide that original offer has not been terminated. |
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Mirror Image Rule |
Until all the terms mirrored one another, no contract was created. This rule has two parts: the offer and the purported acceptance must match. If they don't, the resulting counteroffer has the effect of extinguishing the original offer. |
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Last Shot Doctrine |
The last offer (or counteroffer) given by one party to the other before commencement of performance was the offer that governed. |
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2-207(1) before the comma |
There is a contract even though there are different terms (i.e. the terms don't have to mirror each other). Additional terms are dealt with under 2-207(2) |
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2-207(2) |
If there is a non-merchant involved in the contract, the additional terms will be seen as proposals and not automatically added to the contract. If the contract is between merchants, the additional terms will be added to the contract, unless either of the following occurs: (1) the offer expressly limits the acceptance to the terms of the offer; (2) the additional terms materially alter the contract; or (3) notification of the objection is given. If either of these occur, there will still be contract formation, but the additional terms will not be added. |
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2-207(1) after the comma |
Creates an exception to before the comma by resurrecting offer and counteroffer. The offeree is allowed to make a counteroffer. |
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2-207(3) |
If the parties have conflicting terms, but the parties act as if there is still contract formation, then the terms that will govern the contract are those that were agreed upon. Any conflicting terms will drop out and the UCC gap filler provisions will govern. |
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Merchant |
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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Goods |
All things which are moveable at time of identification to the contract for sale. |
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Open price term |
The parties if they so intend can conclude a contract for sale even though the price is not settled. |
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2-204 |
For the sale of goods, a contract can be made in any manner that is sufficient to show agreement. This includes conduct by both parties, which recognizes the existence of the contract even though the moment of contract formation is undetermined. Also, even though there are terms left open in the contract, the contract will not fail for indefiniteness if it can be seen that the parties intended to make a contract. |
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Negotiations |
A manifestation of willingness to enter into an offer is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made further manifestation of assent. |
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Definiteness (CL) |
Courts will look at the open terms and ask whether a reasonable person would thing that there is some contract being made. There are two ways to determine definiteness: (1) indefinite promises; and (2) agreements to agree. If there are indefinite terms then it is less likely that the parties meant to be bound. |
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Definiteness: Agreements to agree |
When the parties agree to negotiate the terms at a future date. These are disfavored under common law. A court will not enforce contracts that are indefinite because they don't want to determine what the parties would have agreed to. Exception to this is if the term has some external reference point (i.e. market value or industry/custom standard). |
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Definiteness (UCC) |
A contract for the sale of goods will be enforced even if there are open terms as long as parties intended to form a contract and there is reasonably certain basis to give appropriate remedy. |
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Statute of frauds (R2d) |
Certain types of contract must be in writing. Under the common law, a promise that cannot be performed within a year has to be in writing. That writing must include the following (1) signature of the party being charged; (2) reasonable identification of the subject matter of the contract; and (3) be sufficient to show agreement between the parties; and (4) should state with reasonable certainty the essential terms of the contract. |
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Statute of frauds (UCC) |
Certain types of contracts must be in writing. Under the UCC, a contract for the sale of goods of at least $500 or more requires a writing providing evidence of the existence of a contract. In addition, all of the terms of the contract do not need to be in writing, however the agreement must be signed by the party charged, and there can be more than one writing. Lastly, a writing is not insufficient if it states the terms incorrectly. |
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Exceptions to the statute of frauds |
There are two exceptions. The courts will use promissory estoppel or partial performance to enforce the contract. |
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A writing |
Includes printing, typewriting or any other intentional reduction to tangible form |
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Signed |
includes any symbol executed or adopted by a party with present intention to authenticate a writing. |
