Contracts

Front 1

What is the definition of an Offer?

Back 1

A manifestation of willingness to enter into a bargain that creates the power of acceptance.
The offer must be sufficiently detailed to give the offeree the ability to accept.
TIP: Look for words of commitment that are definite.

Front 2

What is the Definition of Acceptance?

Back 2

Is a manifestation of assent to the offer - concludes the deal.

Front 3

What is a Unilateral K?

Back 3

One that involves an exchange of the oferors promise or the offerees act.
Promise in exchange for performance

Front 4

What is a Bilateral K?

Back 4

A contract which both sides make promises.

Front 5

What are not offers?

Back 5

Preliminary negotiations
Advertisements
Auctions (solicitation for offers)
Inquiries

Front 6

Who may accept?

Back 6

An offer may be accepted only by th person for whom the offeror is intended to create a power of acceptance.

Front 7

What is the method of acceptance?

Back 7

The oferor is the master of his offer. That is thet offeror may prescribe the method in which the offer may be accepted. Unless the offeree complies with the specified method of acceptance, there is no acceptance.

Front 8

Must the offeree know of the offer?

Back 8

Yes, an acceptance is usually valid only if the offeree knows of the offer at the time of his alleged acceptance
Examples: Rewards

Front 9

What is the "Mailbox Rule"?

Back 9

Only if the offeror does not specify the method of acceptance, then the acceptance is effective upon the mail

Front 10

How can you accept in a unilateral K?

Back 10

An offer for a unilateral K is acceped by full performance of the requested act.

Front 11

If the bilateral offer does not specify mode of acceptance how may you accept?

Back 11

If the offer does not make clear whether to accept through promise or performance, the offeree may accept by EITHER a promise or performance.

Front 12

What are the modes of acceptance for UCC K?

Back 12

If a buyer of goods places a purchase order that does not state how acceptance to occure, the seller may accept by either promising to ship the goods or by in fact shipping the goods.

Front 13

Can you accept by shipment of non conforming goods?

Back 13

Yes, sometimes the seller may accept and breach all with the same act, by shipping non conforming goods.

Front 14

What is an accomodation shipment?

Back 14

If the seller is accomodating the buyer by shipping what the seller knows and says are "non conforming goods": this act is not a breach and does not act as acceptance. This is a counteroffer.

Front 15

Must you give notive of acceptance of unilateral K?

Back 15

Yes. where an offer looks to a unilateral K, most courts now hold that the offeree must give reasonable notice of his acceptance after he has done the requested performance. (Unless the offeror learns of the acceptance in some other way)

TIP: These come up in surety K

Front 16

What are Implied in Fact K?

Back 16

Situatins in which the parties doe not expressly exchange an offer and acceptance but in which they indicate by their conduct their understanding that a K is being formed.

Example: If an offeree who silently receives a benefit of services NOT goods will be held to have accepted thhe K if 1) he had reasonable opportunity to reject them and 2) knew or should have known that the provider of the services expected to be compensated.

Front 17

What is the mirror image rule?

Back 17

Under CL, the offeree's response operates as an acceptance ONLY if it is precise mirror image of the offer. If it conflicts at al with the terms of the offer, or adds new terms the puported acceptance then becomes a counter offer or rejection.

Front 18

Under the UCC, can you add terms?

Back 18

Yes, the UCC rejects the mirror image rule. There will be a K even if there are additional terms it automatically becomes part of the K. SO LONG as it does not materially alter the K or one party doesn't object to it.
NOTE: Both parties must be merchants.

Front 19

What additional terms materially alter the K?

Back 19

Limitations of liability clauses
Arbitration clauses
Disclaimer of warranty

Front 20

What if one party is a merchant and the other party is not, do additional terms become part of the K?

Back 20

If at least one party is not a merchant, the additional term does not prevent the offerees response from giving rise to the K, but the additional ter,m becomes part of the K only if the offeror explicitly assents to it.

Front 21

What if the terms of a K are conflicting under the UCC?

Back 21

Under the UCC, if there are conflicting terms, most courts apply the knock out rule. That is conflicting clauses knock each other out of the K so that neither enters the K, and instead the UCC gap fillers provisions is used if one is relevant.

Front 22

Ways to terminate an offer?

Back 22

Rejection
Revocation
Counteroffer
Lapse of time
Death

Hint 22

5 ways

Front 23

What is an option K?

Back 23

Under CL, an option K is an irrevocable offer

Front 24

What is a firm offer?

Back 24

Under the UCC,
1) by a merchant
2) in a signed writing
3) gives explicity assurance offer will stay open
But only for 3 months. After 3 months it is no longer irrevocable (but still an offer).
No consideration is needed, but if you give additional consideration offer can stay irrevocable for longer than 3 months.

Front 25

What is indirect revocation?

Back 25

If a person finds out about through other means that the oher party has revoked his offer through his conduct. (Heard it through the grapevine)

Front 26

What is consideration?

Back 26

Any contractual promise must be supported by consideration unless an exception applies.
Promise is supported by consideration if the
Promise is given as part of the bargain (in exchange for) and
What promisor gets is an act, forbearance or return promise.

Front 27

What makes a unilateral K temporarily irrevocable?

Back 27

Part performance, applies to only actual performance not preparations.

Front 28

What makes a bilateral K temporarily irrevocable?

Back 28

Yes, if the offeree's making of preparations will cause the offer to be temporarily irrevocable.

Front 29

Gap Fillers under the UCC

Back 29

Price - FMV
Place - Sellers place of business
Time of delivery - reasonable time
Time for Payment - COD
Quantity MUST be specified or no K.

Front 30

What is the pre-existing duty rule?

Back 30

If a party does or promises to do what he is already obligated to do, or if he forbears or promises to forbear from doing something which he is not legally entitled to do, he has not incurred a legal detriment for purposes of considersation.

If parties to an existing K, agree to modify the K for the sole benefit for one of them the modification will usually be unenforceable at CL for consideration.

Front 31

Exception to the pre-existing duty rule

Back 31

Unanticipated circumstances
Extra duties
Substituted performance

Front 32

Can you modify a K under the UCC?

Back 32

UCC abolishes the pre-existing duty rule and provides an agreement modifying the K needs no consideration - just need good faith.

Front 33

Can you modify a K under the CL?

Back 33

Yes, with consideration ONLY.

Front 34

What is Accord and Satisfaction?

Back 34

Payment of a check less than the amount owed will result in a discharge if:
The check must contain a conspicuous statement
The underlying claim must have been unliquidated and subjected to a bona fide dispute.
the debtor acted in good faith.

Front 35

How does the pre-existing duty apply to debt payments?

Back 35

Most courts apply the pre-existing duty rule to render unenforceable a creditors promise not to require payment by his debtor of the full debt. Unless there is something extra such as more time to pay, or extra interes which will then equal consideration.

Front 36

Does surrender of an invalid claim constitute consideration?

Back 36

Modern view: If the plaintiff promises to forbear from suing is invalid, it will be considered consideration if:
1) The plaintiff's forborne claim is one whose validity is uncertain or
2) the plaintiff subjectively belives that the forborne claim has possible merit.

Front 37

What is a an output K (a.k.a. requirement contracts)?

Back 37

Under the UCC, an output K is an exclusive dealing K and such contracts impose an implied obligation by the seller to use the best efforts to supply the goods and by the buyer to use the best efforts to promote the sale.

Front 38

How do you handle promises to perform unenforceable obligations?

Back 38

If an obligation is discharged, or unenforceable and you refresh or revive a past debt or a discharged debt, then the promise is enforceable only up to the new amount of the promise if embedded in a signed writing.

Front 39

What is promissory estoppel?

Back 39

Often when courts cant find a true K, requires:
1) promisor intended promisee to rely on the promise
2) promisee in fact relied on the promise
3) it would be unjust to not hold promisor to his promise

Front 40

3 Requirements for avoidance of K based on mutual mistake

Back 40

1. the mistake must concern a basic assumption of the K
2. The mistake must have material effect on the deal
3. The contract must not expressly or implicitly have imposed the risk

Front 41

What is the parol evidence rule?

Back 41

You can not introduce evidence of a prior or contemporaneous oral or written agreement to either contradict a partially or fully integrated wrting or even supplement a completely integrated writing.

Front 42

What is complete integration?

Back 42

Writing thats intended to be final expression of their agreement and includes all details of the parties agreement

Front 43

What is not covered by PER?

Back 43

Post - K negotiations are not covered by PER
Ambiguity
Mistake
Conditions (to the effectiveness of the K)
Illegality
Fraud

Front 44

How to interpret ambiguous terms?

Back 44

Course of performance - how the parties perform under a current K
Course of dealing - refers to how parties have acted with respect to past K
Trade usage - refers to the practice or method of dealing in the trade/industry
(in order of priority)

Front 45

What is a condition?

Back 45

An event that must occur before a particular performance is due

Front 46

What are the different types of conditions?

Back 46

Express - expressly stated
Constructive - implied
Concurrent - must occur at same time

Front 47

Who has the right to waive a condition?

Back 47

The person who is benefited by the condition will always have the power to waive the condition. (they may also reinstate the condition)

Front 48

What is adequate performance?

Back 48

Under the UCC, provides that when reasonable grounds for insecurity arise with respect to the performance of either party the other may in writing demand assurances of due performance and until he receives such assurances may if commercially reasonable suspend any performance.
NOTE: Agreement to pay in cash meets the response to adequate performance.

Front 49

Describe "cure" after non perfect tender?

Back 49

Under the UCC, if seller tenders non conforming goods that seller reasonably thought would be acceptable w/or w/o money allowance and buyer rejects seller has a further reasonable time (beyond due date) to substitute a conforming tender. The buyer must accept the seller's attempt to cure if before due date.

Front 50

What is the perfect tender rule?

Back 50

Under the UCC, if the goods fail in any respect to conform to the K, the buyer may reject all, accept all, or accept any commercial unit and reject the rest. (must be in good faith)

Front 51

How to handle non perfect tender under installment K

Back 51

The buyer may reject any installment K if the non conformity substantially impairs the value of the ENTIRE K. But a slight non conformity does not allow the buyer to reject it.

Front 52

What is anticipatory repudiation?

Back 52

If a party makes it unequivocally clear in uambiguous language that he will not or cannot perform, then there is a breach and the party is said to have anticipatorily repudiated.

Front 53

Definition of SOF

Back 53

Purpose is that there are certain K that must be in writing to be enforceable:
MY LEGS
Marriage
Year
Land
E
Goods for $500 or more
Surety

Front 54

What type of damages are there?

Back 54

Reliance - Restore P to pre-K position
Expectation - Put P in the position would have been in had the K been performed
Restitution - Award P the value of the unjust enrichment rendered to D

Front 55

What are Equitable remedies? (Not money damages)

Back 55

Injunction
Specific Performance

Front 56

What is a lost volume seller?

Back 56

The lost volume seller may recover the profit he has lost by reason of the breach.
A lost volume sller is
1) one who had a big enough supply that he could have made both the contracted or sale and the resale
2) probably would have made the resale anyway as well as the original sale has there nbeen no breach and
3) would have made a profit on both sales.

Front 57

What is the rule with consequential damages?

Back 57

If the consequential damages are so obvious foreseeable or the Defendant had notice at the time of K - otherwise they are not recoverable.

Front 58

Describe Gratuitous assignments?

Back 58

gratuituous assignments are not for consideration are deemed revoked if
1) the assignor dies or
2) makes subsequent assignment of his rights to a 3rd person or
3) gives notice to either assignee or the obligor that the assignment has been revoked

Front 59

What is an assignment?

Back 59

An assignment is a present transfer of ones rights under a K. You can freely assign rights.

If a party assigns his right to receive payment under a K, Article 9 applies but must sign a security agreement,

Front 60

Exceptions to assignment

Back 60

An assignment prohibited by law
An assignment of unique rights
An assignment from future rights
An assignment that would substantially change the obligors duty or risk

Front 61

What is a 3rd party beneficiary?

Back 61

A 3rd party beneficiary is a person whom the promisee in a contract intends to benefit.

Front 62

What is the difference between intended and incidental beneficiaries?

Back 62

Intended has contractual rights and Incidental do not.