Contracts And Sales

Front 1

What is a quasi contract?

Back 1

an equitable remedy (restitution)

Front 2

what are the elements for quasi contract?

Back 2

1. P has conferred a benefit on D, AND

2. P reasonably expected to be paid, AND

3. D realized unjust enrichment if P not be compensated

Front 3

How is the recovery measured in quasi contract?

Back 3

contract price is not the measure recovery. Focus on value of benefit conferred. The contract price is a ceiling if P is in default.

Front 4

bilateral contract: offer that is _________

Back 4

open as to the method of acceptance

Front 5

unilateral contract: offer that______

Back 5

expressly requires performance as the only possible method of acceptance

Front 6

Assume a contract is bilateral unless:

Back 6

1. a reward, prize, contest = unilateral

2. offer expressly requires performance for acceptance

Front 7

What are the two applicable laws in Contracts?

Back 7

common law and UCC

Front 8

What kind of contracts does common law cover?

Back 8

Service contracts, employment, real estate, construction

Front 9

What does the UCC cover?

Back 9

Art. 2 of UCC applies to primarily the sale of goods.

Front 10

How do you know if the UCC applies?

Back 10

1. type of transaction = sale

2. subject matter of transaction = goods, i.e. tangible, personal property - anything movable

Front 11

Does the UCC apply to contracts for the sale goods for less than $500?

Back 11

Yes, this is only a SOF distinction

Front 12

If you have a single contract for both services and goods, what law applies?

Back 12

determine which part, the services or the goods, are the more important part of the contract. If services = common law. If goods = UCC.

Factors: how much money, time, sophistication of service, typical sales language?

Front 13

What is the exception that applies to situations of a single contract for both services and goods and determining which law applies?

Back 13

if contract divides payment, apply UCC to sale of goods part and common law to the rest.

Front 14

what are the 3 levels of contract formation?

Back 14

1. initial communication = offer

2. what can happen after initial communication = offer is terminated

3. who responds and how = acceptance

Front 15

OFFERS: an offer is a manifestation of______

Back 15

an intent to contract--words or conduct showing commitment

Front 16

what is the basic test for determining whether there is an offer?

Back 16

whether a reasonable person in the position of the offeree would believe that his or her assent creates a contract.

Front 17

Is an offer required to contain all material terms?

Back 17

Yes, under common law, must have PRICE and DESCRIPTION, otherwise not an offer

Under UCC, however, NO PRICE required.

Front 18

Is an offer valid if terms "appropriate," "fair," "reasonable" are used?

Back 18

No these are vague and constitute ambiguous terms. Such statements are offers under either the common law or UCC.

ex. "a fair price."

Front 19

A contract for the sale of goods can state the ___________of goods to be delivered under the contract in terms of the buyer's _________ or seller's ___________ or in terms of _______________.

Back 19

quantity........requirements...........output..........exclusivity.

ex. "B shall purchase ALL of its widgets from S"

also, a buyer can increase requirements so long as the increase is in line with prior demands.

Front 20

An advertisement is ________, but instead _______

Back 20

not an offer........an invitation to deal

Front 21

when can an advertisement be an offer?

Back 21

1. if it is in the nature of a reward - ex. "C promises $100 REWARD to anyone who catches flu after using smoke ball."

2. specific as as to quantity and expressly indicates who can accept - ex. "1 fur coat $10 first come, first served."

Front 22

What are the four methods in which an offer can terminate?

Back 22

1. lapse of time

2. Revocation

3. Rejection

4. death of a party prior to acceptance

Front 23

An offer can terminate for lapse of time if there is __________

Back 23

a time stated or after a reasonable time (typically a month, but not hard and fast rule)

Front 24

Who revokes an offer?

Back 24

the offeror

Front 25

How does the offeror revoke an offer?

Back 25

1. an unambiguous statement to offeree of unwillingness or inability to contract, OR

2 unambiguous conduct by offeror indicating an unwillingness or inability to contract that offeree is AWARE OF

Front 26

When is revocation of an offer effective?

Back 26

1. revocation sent through mail = not effective until received

2. no revocation after it has been accepted - this would instead be a breach

Front 27

what are four scenarios where an offer simply CANNOT be revoked?

Back 27

1. OPTION K

2. merchant firm offer rule

3. Reliance

4. start of performance

Front 28

what is an option K?

Back 28

offeror has promised to keep an offer open AND this promise is supported by separate consideration

Front 29

what is the merchant firm offer rule?

Back 29

an offer cannot be revoked for up to 3 MONTHS if :

(i) offer to buy or sell goods

(ii) signed written promise to keep offer open, AND

(iii) party is a merchant

Front 30

Is consideration necessary under the merchant firm offer rule?

Back 30

NO

Front 31

An offer cannot be revoked if there has been detrimental ____________ by the ___________ that is reasonably __________.

Back 31

reliance......offeree.........foreseeable.

Front 32

The start of __________ pursuant to an offer to enter into a unilateral contract makes that offer ___________for a reasonable time to complete __________.

Back 32

performance......irrevocable.........performance.

Front 33

Is mere preparation enough to constitute performance in order to prevent possible revocation under a unilateral contract?

Back 33

No. ex. buying paint in preparation for painting someone's house

Front 34

A rejection is made by the _________

Back 34

offeree through words or conduct

Front 35

what are three indirect methods of rejection?

Back 35

1. counteroffer

2. conditional acceptance

3. mirror image rule

Front 36

S offers to sell black acre for $10,000. B responds, "I will only pay $9,000." S refuses to sell for $9,000. Can B later accept S's offer to sell for $10,000?

Back 36

No because B's initial response is a counteroffer and thereby terminated the original offer.

Front 37

S offers to sell black acre for $10,000. B responds, "Will you take $9,000?" S refuses to sell for $9,000. Can B later accept S's offer to sell for $10,000?

Back 37

Yes, because B's response is not a counteroffer but instead mere bargaining

Front 38

What is the effect of conditional acceptance of an offer?

Back 38

it terminates the offer. Look for "if" "but" "Provided.." "so long as" "on condition that."

Front 39

what is the mirror image rule?

Back 39

under common law, acceptance of the offer must mirror the offer terms exactly. Acceptance that adds new terms is treated like a counteroffer rather than an acceptance.

Front 40

Does the mirror image rule apply under the UCC?

Back 40

No, only common law.

Front 41

Are additional terms still acceptance under the UCC?

Back 41

Yes, if seasonable expression of acceptance, but raises two questions:

1. is there a contract? - generally yes

2. is additional term a part of the contract?

Front 42

Under the UCC, a response to an offer that adds new terms, (but does not make new terms a condition of acceptance), is generally treated as an acceptance. It is a _________ of acceptance.

Back 42

"seasonable expression of acceptance"

Front 43

If both parties are MERCHANTS, the GENERAL RULE is that the addition term is________

Back 43

part of the contract.

Front 44

What are two exceptions to additional terms, under the UCC, in the acceptance when both parties are merchants?

Back 44

1. the additional term is NOT a part of the contract between merchants if it MATERIALLY CHANGES THE OFFER; or

2. the additional term is NOT a part of the contract between merchants if the OFFEROR OBJECTS TO THE CHANGE

Front 45

If one or both parties is not a merchant, the additional term is merely__________

Back 45

a proposal that is be separately accepted or rejected.

Front 46

What is the general rule when a party dies prior to acceptance?

Back 46

death terminates the offer

Front 47

what are two exceptions to the death of a party prior to acceptance?

Back 47

1. option

2. part performance of offer to enter into unilateral contract

Front 48

does it matter which party dies for the death of a party prior to acceptance to apply?

Back 48

No, if either party dies, offer is terminated

Front 49

ACCEPTANCE: generally who can accept?

Back 49

1. a person who knows about the offer

2. who is the person to whom it was made

Front 50

Can offers be assigned?

Back 50

No

Front 51

Can options be assigned?

Back 51

yes unless the options provides otherwise

Front 52

what are six possible fact patterns regarding methods of acceptance of an offer?

Back 52

1. full performance

2. start to perform

3. offeree promises to perform

4. mailbox rule

5. seller sends the wrong goods

6. offeree is silent

Front 53

If the offeree fully performs, only possible issue is whether _________ of performance is required. This will turn on two things:

Back 53

NOTICE

1. what offer provides, and

2. whether the offeree has reason to believe that offeror will not learn of the acceptance

Front 54

If offeree starts to perform, this will be an acceptance to enter into a ___________ contract, but not a ____________ contract.

Back 54

bilateral..........unilateral. Under a unilateral contract, there must be COMPLETE performance.

Front 55

True or False: most offers can be accepted by a promise to perform?

Back 55

True, however, offers that expressly require performance for acceptance and reward offers require performance, a promise will be insufficient.

Front 56

what is the mailbox rule?

Back 56

if an offeree is "invited" to accept by mail, acceptance is effective when posted (SENT). For example, if the offer arrives by mail, a mailed acceptance will be effective when posted.

Front 57

what are the 3 rules to keep in mind with regard to the mailbox rule?

Back 57

1. generally, communications are effective only when received

2. generally, acceptance is effective when SENT

3. if rejection is sent FIRST, ignore rule 2, and acceptance will only be effective when received.

Front 58

what are 9 legal reasons for not enforcing an agreement?

Back 58

1. lack of consideration or a consideration substitute for the promise at issue

2. lack of capacity of person who made promise

3. SOF

4. existing laws that prohibit performance of agreement

5. misrepresentation

6. duress

7. unconscionability

8. ambiguity in words of agreement

9. mistakes at time of agreement as to material facts affecting agreement