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117 Cards in this Set
- Front
- Back
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Stages of a K
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• Negotiation
• Performance • Enforcement |
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Breach of K has no ___ damages
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Breach of contract has no punitive damages.
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• Strict adherence to rules without consideration for morals etc.
• Freedom of contract (parties should be left alone to contract however they wish to, and courts should only intervene under limited circumstances, like fraud or duress) |
Classical K Law
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• Developed from legal realists
• Takes moral, political, social, and economic issues into consideration when determining contract law • Includes “Chicago school” (Posner) Focuses on economic analysis: efficiency (low transaction costs and resources allocated to most highly valued uses) |
Modern K Law
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• Lots of changes occurring about how parties enter into transactions
• How do traditional rules of contract law apply to Internet transactions? • Standardized forms control transactions. People tend not to read all the conditions. |
Post-Modern K Law
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• If you sign the document, both parties are responsible
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Objective Theory of K
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• There must be a meeting of the minds (both people have to know what they’re doing, and agree, when the contract is signed.)
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Subjective Theory of K
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exchange of promise for promise
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bilateral K
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exchange of promise for performance
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unilateral K
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Offeree's risk in unilateral K
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Offeree vulnerable to revocation
[bridge example] |
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In all doubtful cases, it should be presumed that an offer solicited an acceptance by promise, thus making it more likely that the offeror would be bound at an earlier point in time.
- State constitutional preference for bilateral K - Applicable only in situations where some ambiguity as to whether offeror intended promise or performance. |
RSTM 31
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Followed approach of RSTM 31, slightly diff't emphasis (reflects UCC 2-206).
Provides that unless language or circumstance indicate otherwise, should be assumed offer may be accepted by EITHER promise of performance or actual performance. - Unless specifically stated otherwise, acceptance comes when goods are shipped OR acceptance is explicitly communicated |
RSTM 32
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Where one party makes a promissory offer in such a form that it can be accepted by the rendition of the performance that is requested in exchange, without any express return promise of notice of acceptance in words, the offeror is bound by a contract just as soon as the offeree has rendered a SUBSTANTIAL PART of that requested performance
Partial performance makes the offer irrevocable, and keeps the offeror from changing unilaterally the terms of the offer. In essence, creates an option contract Binds offer of unilateral K as soon as performance begun by offeree. |
RSTM 45
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A real contract, but one in which agreement is reached by the parties’ actions rather than by their words.
Conduct & surrounding circumstances. All elements of K (consideration, mutual ass.) required - all it lacks is EXPRESS promise. Treated same as "regular" K. |
Implied-in-Fact K
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Not technically a K, but legal means of avoiding UNJUST ENRICHMENT where one party bestows benefit on another under reasonable expectation of being compensated.
W/O reasonable expectation of payment, cannot be recovery. Physician rendering services to pedestrian example. |
Quasi-K (Implied-in-Law)
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Option K RSTM?
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RSTM 87
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Elements of an option K?
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(1) Seperate consideration for the option.
(2) Assurance that the offer would be held open for a certain time. (3) Signed writing by the offeror |
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Requirements under RSTM 87?
(Offer binding as an option K IF...) |
(1) Offer in writing and signed by offeror
(2) Recited purported consideration for the making of the offer (3) Proposes an exchange on fair terms within reasonable time - OR - (4) Made irrevocable by statute. |
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Option K under RSTM 87 is an offer which the offeror should reasonably ____?
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expect
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What is an option K that is not supported by consideration?
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A mere offer to sell that that can be revoked/withdrawn at any time prior to acceptance.
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Stages of a K
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• Negotiation
• Performance • Enforcement |
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Breach of K has no ___ damages
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Breach of contract has no punitive damages.
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• Strict adherence to rules without consideration for morals etc.
• Freedom of contract (parties should be left alone to contract however they wish to, and courts should only intervene under limited circumstances, like fraud or duress) |
Classical K Law
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• Developed from legal realists
• Takes moral, political, social, and economic issues into consideration when determining contract law • Includes “Chicago school” (Posner) Focuses on economic analysis: efficiency (low transaction costs and resources allocated to most highly valued uses) |
Modern K Law
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• Lots of changes occurring about how parties enter into transactions
• How do traditional rules of contract law apply to Internet transactions? • Standardized forms control transactions. People tend not to read all the conditions. |
Post-Modern K Law
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• If you sign the document, both parties are responsible
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Objective Theory of K
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• There must be a meeting of the minds (both people have to know what they’re doing, and agree, when the contract is signed.)
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Subjective Theory of K
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exchange of promise for promise
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bilateral K
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exchange of promise for performance
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unilateral K
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Offeree's risk in unilateral K
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Offeree vulnerable to revocation
[bridge example] |
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In all doubtful cases, it should be presumed that an offer solicited an acceptance by promise, thus making it more likely that the offeror would be bound at an earlier point in time.
- State constitutional preference for bilateral K - Applicable only in situations where some ambiguity as to whether offeror intended promise or performance. |
RSTM 31
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Followed approach of RSTM 31, slightly diff't emphasis (reflects UCC 2-206).
Provides that unless language or circumstance indicate otherwise, should be assumed offer may be accepted by EITHER promise of performance or actual performance. - Unless specifically stated otherwise, acceptance comes when goods are shipped OR acceptance is explicitly communicated |
RSTM 32
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Where one party makes a promissory offer in such a form that it can be accepted by the rendition of the performance that is requested in exchange, without any express return promise of notice of acceptance in words, the offeror is bound by a contract just as soon as the offeree has rendered a SUBSTANTIAL PART of that requested performance
Partial performance makes the offer irrevocable, and keeps the offeror from changing unilaterally the terms of the offer. In essence, creates an option contract Binds offer of unilateral K as soon as performance begun by offeree. |
RSTM 45
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A real contract, but one in which agreement is reached by the parties’ actions rather than by their words.
Conduct & surrounding circumstances. All elements of K (consideration, mutual ass.) required - all it lacks is EXPRESS promise. Treated same as "regular" K. |
Implied-in-Fact K
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Not technically a K, but legal means of avoiding UNJUST ENRICHMENT where one party bestows benefit on another under reasonable expectation of being compensated.
W/O reasonable expectation of payment, cannot be recovery. Physician rendering services to pedestrian example. |
Quasi-K (Implied-in-Law)
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Option K RSTM?
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RSTM 87
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Elements of an option K?
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(1) Seperate consideration for the option.
(2) Assurance that the offer would be held open for a certain time. (3) Signed writing by the offeror |
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Requirements under RSTM 87?
(Offer binding as an option K IF...) |
(1) Offer in writing and signed by offeror
(2) Recited purported consideration for the making of the offer (3) Proposes an exchange on fair terms within reasonable time - OR - (4) Made irrevocable by statute. |
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Option K under RSTM 87 is an offer which the offeror should reasonably ____?
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expect
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What is an option K that is not supported by consideration?
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A mere offer to sell that that can be revoked/withdrawn at any time prior to acceptance.
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Something that creates a power of acceptance.
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Offer under RSTM 24
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Two essential elements of a bargain under RSTM 24?
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(1) Intent to enter into a bargain
(2) Certainty and definitness of terms. |
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Factors to consider when determining a "Reasonable Time" to accept?
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(1) Trade Customs
(2) Nature and Subject Matter (3) Means/Mode of communication (4) Prior Dealings Between Parties (5) Language of Offer |
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Offers that are GENERALLY NOT valid? (6)
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(1) Offers made in jest
(2) Preliminary Negotiations (3) Statement of Future Intention (4) Price Quote (5) Invitation to Bid (6) Advertisements |
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What is the EXCEPTIONS to an Advertisement *generally* NOT being an offer?
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If an ad includes:
(1) Specific Terms to (a) Quantity, (b) Price, AND (c) is addressed to particular person/group (ex. 'first come first serve') ---than it MAY be an offer. GENERALLY TO BE AN OFFER: Must contain WORDS OF COMMITMENT: (ex. send three box tops plus $1.50, free shirt) |
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Factors to Determine if something is an offer or merely a Statement of Future Intention? [5]
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(1) Formality
(2) Specificity (3) Degree of reliance that the promisee would be reasonable in relying upon. (4) Benefit to be received by promisor. (5) Previous communications between parties. |
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Price Quotation only considered an offer if it ______?
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specifies a clear quantity
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Price Quotation unlikely to be considered an offer if ____?
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If it is not addressed to a specific person (aka a general price list sent out in large mailing)
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Invitation to Bid not offer unless ____?
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Unless it contains language indicating that it is an offer. (ex. language indicating commitment award to highest bidder)
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Something cannot be characterized as an offer if some further act is required by the ______.
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The Offeror
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RSTM 36(1)?
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Ways of Terminating the Power of Accepance (Offer)
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Ways to terminate an offer under RSTM 36(1)?
[6 ways] |
(1) Death or incapacity by offeree or offeror.
(2) Rejection by offeree. (3) Counteroffer (4) Qualified Acceptance (5) Lapse of Time (6) Revocation |
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If offeree rejects offer, her power of acceptance is terminated UNLESS (2)
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(1) offeror indicates offer still stands in spite of rejection -OR-
(2) Offeree states that although she does not now intend to accept the offer, she wishes to consider it further. |
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Qualified acceptanc will ordinarily be accepted as a _____.
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Counteroffer.
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Rules of Revocation? (4)
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- Must be communicated.
- Merely signing K with another party does NOT constitute revocation. - Notification can be from a third party as long as they're reliable. - Revoation upon Receipt!! |
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Irrevocable Offers? [2]
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(1) Option Ks
(2) Firm Offers |
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CISG Article 16(2) - Two irrevocable offers?
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(1) It indicates, whether by stating a fixed time for acceptance or otherwise that it's irrevocable
OR (2) That it was REASONABLE for offeree to RELY on offer as being irrevocable; and offeree acted in reliance upon offer. |
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RSTM 90?
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Promissory Estoppel
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Where is use of Promissory Estoppel limited?
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In Commerial Transactions
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Five general limitations to use of promissory estoppel in SubK/General K Relationship?
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(1) If D's bid expressly state/clearly implies it's revocable at any time before acceptance.
(2) No Bid Shopping (3) No Bid Chopping (can't re-open/re-negotiate after acceptance) (4) If P had reason to believe D was in error [therefore didn't justifiably rely - RSTM 90!] (5) If D did not make a Firm Bid [can't justifiably rely on firm bid; not a promise] |
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An offer which offeror should reasonably expect to induce an action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.
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RSTM 87(2)
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Using promissory estoppel, _____ makes an offer irrevocable.
(Operates similar to option K but isn't an option) |
Reliance
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In promissory estoppel cases, when an offeree acts in reliance upon an offer - what kind of damages can they (and cannot) recover?
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Offeree can recover RELIANCE damages; but not EXPECTAION damages.
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RSTM: the power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.
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RSTM 42
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Definition of Acceptance according to RSTM?
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RSTM 50: Offeree's manifestation of assent to terms of offer, mande in manner invited or required by the offer.
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"Acceptance must be made in same mode of communication as the offer"
* Classical or Modern? |
Classical
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Modern View: Allows acceptance in whatever mode is ______.
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Reasonable
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MB Rule protects the reliance interest of the _____.
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Offeree.
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RSTM Approach to Partial Performance (of a unilateral K)?
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RSTM 45: Can be accepted only by full performance, BUT if offeree begins to perform - most courts treat offer has havig become TEMPORARILY IRREVOCABLE
SO -- Offeree receives an OPTION K. |
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RSTM 45 creates a ______?
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Option K through part performance.
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Exceptions to rule that generally, acception cannot be made by silence?
[3] RSTM___? |
RSTM 69:
(1) Prior Course of Dealings (2) Reason to understand silence is consent (3) Silenty Receive Benefit of Services |
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An offeree who silently accepts the benefit from services (NOT GOODS) will be held to have accepted a K if _____ and _____?
[2] |
If
(1) He had a reasonable opportunity to reject them -and- (2) He knew or should have known that the provider of the services expected to be compensated. [RSTM69(1)(a)] |
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Giving piano lessons hypothetical is an exaple of...?
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Acceptance by Silence
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Acceptance by Silence is distinguished from Quasi-Contractual Right of Recovery (of one who does services w/o a K) in what way?
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Quasi-K Recovery can ONLY receive recovery to REASONABLE VALUE of service!
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Common Law Rules for Acceptance Varying from the Offer? (2)
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Mirror Image Rule
Last Shot Rule |
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________ is an effort to move away from the common law Mirror Image Rule and Last Shot Rule.
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UCC 2-207
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UCC 2-207 Definition
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a definite and seasonable expression of acceptance…operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
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UCC 2-207 Applies to (3)?
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(1) Purchase Orders
(2) Performance (3) Acknowledgment Forms |
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In typical ________ disputes, parties typicaly have negotiated terms deemed necessary to settle by agreement and left open conflicts between diff't terms on respective forms.
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Battle of the Forms dispute
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Under UCC 2-207, written communications in process of forming K are often, but not always on _______ forms with ____ terms and "______" (to protect interests of that party)
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Often on PRE-PRINTED FORMS with STANDARD TERMS and "BOILERPLATE"
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2-207 Applies to K that arises in what ways?
(Refer to subsections) |
(a) An oral agreement followed by written confirmation [1]
(b) An exchange of forms [1] (c) Conduct which recognizes the existence of a K [3] |
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Sub.Sect. [3] of 2-207 only invoked where ____?
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where a K fails to come into existence from an exchange of forms.
- only invoked if there is no written assent -- SO CONDUCT can recognize an existing K! |
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Additional and/or Different terms apply to:
2-207(1)? 2-207(2)? |
2-207(1) Additional OR different terms.
2-207(2) ONLY additional terms. |
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Why do some consider (2) as actually being classified as covering Additional OR different terms?
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Treat the omission as inadvertant - so both fall within (2)
Some support with Comment 3 [but apparently talking about confirmations rather than acceptance] |
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Why do others consider (2) as ONLY covering Additional terms?
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Because "different" isn't included in (2) - must be disregarded.
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UCC's "Knock Out Rule" Rationale?
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Trying to take boilerplate less seriously - so doesn't make sense to take one over another!
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"Knock Out Rule" fills in contradicting terms through ____?
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Gap Filler Provisions
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Relevant Gap Filler Provisions?
(4) |
2-314
2-308 2-309(1) 2-715(2) |
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Gap Filler Provision 2-314?
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Implied Warranty
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Gap Filler Provision 2-308?
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Absence of Specified Place of Delivery
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Gap Filler Provision 2-309(1)?
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Absence of time for shipment or delivery = Reasonable Time!
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Gap Filler Provisions 2-715(2)?
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Consequential Damages
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What injustice of Last Shot Rule does 2-207(3) seek to avoid?
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Last Shot Rule treated offeror's performance as an acceptance by conduct of counteroffer.
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First Question of UCC 2-207?
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Is there a K?
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What must you ask to determine if a K has been formed under 2-207?
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Did the party make it a CONDITIONAL ACCEPTANCE b/c of new term?
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If a party DOES make acceptance conditional upon new terms - then....?
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Then it is a rejection and counteroffer.
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If a party DOES NOT make acceptance conditional upon new terms - then...?
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Then you must determine which terms govern. (make sure that terms added/changed weren't material)
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If there IS a K under 2-207; then what is the second question to ask?
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What are the terms?
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To determine "What are the terms" under 2-207 - what questions must you ask? (4)
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(1) Are both merchants?
(2) Did they make acceptance conditional? (3) Object within reasonable time? (4) Did new terms materially alter offer? |
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To determine if the new terms materially altered the offer; what ANALYSIS should you use?
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Surprise and Hardship Analysis
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MATERIAL TERMS? [2-207]
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(1) Quantity
(2) Delivery and (3) Good(s) **NOT PRICE** |
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____, _____ and _____ can be considered with the Material terms of 2-207.
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(1) Industry Custom
(2) Course of Dealings (3) Trade Usage |
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Unlike Battle of Forms cases, _______ cases - parties appear to have completed their bargaining, or at least to have reached an agreement.
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Postponed Bargaining (Agreement to Agree)
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What kinds of terms are NOT in Agreement to Agree?
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Conflicting Terms
Different Terms Additional Terms NOT in agreement to agree. |
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UCC 2.305?
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UCC 2.305: Open Price Term (Agreement to Agree)
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UCC 2.305 doesn't prevent enforcement if parties did intend to agree, even if ____ term left out!
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Price Term
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Open Price Term Agreements outside the UCC?
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RSTM 22
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RSTM 22 enforces what notion?
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Notion that UCC 2.305 can be applied to Ks other than sale of goods.
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Applying UCC 2-305, First Question is...?
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Did the parties INTEND to make a K?
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To determine if parties intended to make a K under "agreements to agree" (UCC 2-305); what do you consider?
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RSTM 27 Comments
and Quake Factors |
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Quake Factors?
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(a) Whether type of agreement involved is one USUALLY put in writing;
(b) Whether the agreement contains MANY or FEW details; (c) Whether agreement involves LARGE or SMALL amounts of $; (d) Whether agreement required FORMAL writing for full expression of legally binding agreement; and (e) Whether the negotitations INDICATED that a FORMAL written document was intended at completion. |
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RSTM 27 additions to Quake Factors?
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(f) Whether is is a common or unusual K
(g) Whether either party takes any action in prepartation for performance during negotiatons. |
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Three kinds of terms in "electronic consulting"?
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(1) Shrinkwrap Terms
(2) Clickwrap (clickthrough) Terms (3) Browsewrap Terms |
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2-207 can OR cannot apply to cases with only one form?
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2-207 CAN apply to cases with only one form!
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While courts are split, Hill v. Gateway shows trend when Court determined that the (BUYER/SELLER) is the OFFEROR?
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The SELLER is the OFFEROR.
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A pre-existing duty; bargain or condition to a gift; an illusory promise are all NOT ______.
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Consideration.
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Essential Elements of Promissory Estoppel?
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(1) Promise
-- coupled with (2) Detrimetal Reliance |
