Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

48 Cards in this Set

  • Front
  • Back
What is a quasi-contract?

What are the elements of quasi-contract?
It is an equitable remedy, available when contract law does not satisfy the plaintiff.

(1) P has conferred a benefit on D, AND
(2) P reasonably expected to be paid, AND
(3) D will realize unjust enrichment if P is not compensated.
What type of contract law do you apply to
(1) sale of goods?
(2) services
(3) distribution of goods?
(4) Sale of an individual's car?
(1) UCC
(2) Common Law
(3) Common Law
(4) UCC (doesn't matter that it is an individual)
When you have a deal involving sale of goods and contracting for services, do you apply the common law or the UCC?

Can you ever apply common law AND the UCC to a single deal?
You must apply ONE OR the OTHER (never both). Just decide depending on the more important part of the contract.

ONLY when the contract itself divides payment into two distinct pieces, one for goods and one for services.
What is the basic test for whether an offer has taken place?
Whether a reasonable person in the position of the offeree would believe, based on the offeror's words or behavior, that his agreement would create a contract.
Must an offer contain all material terms of a contract?

Which terms must a offer for sale of real estate contain?

Exception: A contract for sale of real estate must contain a description of the land and price.
Does a general sales offer have to contain price?

If a sales offer DOES contain price, are there any requirements for it?
No. Under Art. 2, even without price, a general sales offer is an offer if the parties so intend.

However, if an offer does contain price, the price cannot be vauge or ambiguous (appropriate, fair, reasonable). If so, it is NOT an offer.
Is it OK for a buyer/seller to state the quantity of goods to be delivered in terms of buyer's requirements? Seller's output? Exclusivity?

When a contract is stated this way, can the buyer increase requirements?
Yes. It need not be a fixed amount, just a definite amount.

Yes, so long as the increase is IN LINE WITH PRIOR DEMANDS.
When can an advertisement be an offer?
Generally, advertisements are NOT offers.

However, they can be offers if
(1) It is in the nature of an award;
(2) It is specific as to the quantity and expressly indicates who can accept.
How many ways may one TERMINATE an offer?

What are they?

(1) Lapse of time: time stated or reasonable time;
(2) Revocation: Words or conduct of an OFFEROR;
(3) Rejection: Words or conduct of the OFFEREE;
(4) Death of a party prior to acceptance
What is the general time within which one must accept an offer before it lapses?
Unless the offer says otherwise, you have a window of about a month.
How may an offeror revoke an offer?
(1) Unambiguous STATEMENT by the offeror to the offeree of unwillingness or inability to contract;
(2) Unambiguous CONDUCT by offeror indicating an unwillingness or inability to contact, which offeree is AWARE OF
Imagine that on January 15, I offer to sell George Clooney my Cadillac for $400. The next day, I sell my Cadillac to Conviser. Can Mr. Clooney still accept the January 15 offer?

What if Mr. Clooney knew that I sold the car to Conviser?
YES! Even though he cannot get the actual car, he has contract law rights.

As soon as he knew of the sale, the offer is DEAD and he cannot accept.
What if I offer to sell my Cadillac to George Clooney for $400, and he learns that the next day I offer to sell it to Conviser for $400; does the second offer revoke the first?

No! The second offer does not revoke the first because the behavior is ambiguous. MULTIPLE OFFERS ARE NOT REVOCATIONS. Mr. Clooney could still accept my offer of the Cadillac.
If you send a revocation through the mail, when is it effective?
If a revocation is sent through the mail, it is not effective until it is RECEIVED.
Can you revoke an offer once it has been accepted?
No. Once an offer has been accepted, the offeror can no longer revoke.
How many situations are there in which an offer cannot be revoked?

What are they?
(1) If offeror has PROMISED to keep offer open AND there is CONSIDERATION for the promise;
(2) Cannot be revoked for up to 3 mo. if an offer to buy/sell GOODS, AND there's a signed, written promise to keep the offer open, AND the party is a merchant
(3) Detrimental RELIANCE bt the offeree that is REASONABLY FORESEEABLE
(4) START of performance pursuant to an offer to enter into a UNILATERAL K makes offer irrevocable for a reasonable time to complete performance.
What is the "firm offer rule?"
The "firm offer rule" states that an offer CANNOT be revoked for UP TO 3 MONTHS if
(1) The offer is for the sale/purchase of GOODS
(2) There is a signed, written promise to KEEP THE OFFER OPEN
(3) The offeror is a MERCHANT, meaning someone generally in BUSINESS
Under the firm offer rule, what if all conditions are met and the agreement states that the offer will be held open for
(1) 2 months
(2) 6 months
(3) No time stated!
It is held open for
(1) 2 months
(2) 3 months only!
(3) A period of time fixed by te court, not longer than 3 months.
Does the "firm offer rule" apply to
(1) Real estate?
(2) Service?
NO to both of them! Therefore, the promise can be revoked unless it is irrevokable for some other reason.
On the Bar, when you see the phrase "submits a bid," what should it translate as?
Submits a bid = MAKES AN OFFER
If 2 parties have a unilateral contract, and the offeree begins performance, may the offeror revoke?
NO. The start of performance prohibits revocation for a reasonable time to complete performance.

However, the party must actually BEGIN PERFORMANCE - mere preparation does not count.
How can an offeree REJECT an offer?
(1) By saying so directly
(2) Through a counteroffer
(3) Through conditional acceptance
(4) Through adding terms to a COMMON LAW contract
What are the effects of a counter offer versus bargaining?

How do you tell the difference between the two?
A counter offer REJECTS the original offer, and it, in turn, becomes an offer. Bargaining does not reject the original offer.

Counter offers usually end with a period, while bargaining usually involves a question mark.
What is the effect of a conditional acceptance on an offer?

What words tip you off to a conditional acceptance?
It terminates the offer and becomes a new offer.

"If," "provided," "so long as," "but," "on condition that."
What is the "mirror image rule"?
It states that under COMMON LAW, an "acceptance" that adds new terms is treated as a counteroffer rather than an acceptance.

Does NOT apply to sale/purchase of goods.

How are they generally treated?
It is an acceptance of an offer to buy or sell GOODS that adds new terms.

How it is treated depends on whether there is a valid K and whether both parties are merchants.
When you think you might have a "seasonable expression of acceptance," what two questions do you ask yourself?
(1) Is there a valid contract?

(2) Is the additional term party of the contract?
If at least one party is NOT a merchant, the additional term is merely a proposal that can be accepted or rejected.
If both parties are merchants, the GENERAL RULE is that the additional terms is part of the agreement. There are two exceptions - it materially changes the offer OR the merchant rejects it.
When you have an offer from one merchant to the other, and the second accepts but adds a new term to the offer, is there a contract?

Is the new term a part of the contract?
Generally yes. That is called a seasonable expression of acceptance.

The new term is considered part of the contract if BOTH parties are merchants. There are two exceptions to this rule
(1) The additional term is NOT part of the K if it materially changes the offer, or
(2) The additional term is NOT part of the K if the offeror objects to the change.
Death of either party prior to acceptance generally terminates an offer. Are there any exceptions?
Yes, two.
(1) Option - upon death of offeree, stays open for heirs
(2) Part performance of offer to enter into unilateral contract.
Who can accept an offer?

Can an offer be assigned?
Can an option be assigned?
Generally, an offer can be accepted only by
(1) the person to whom it was made
(2) and the person knows about the offer.

An offer generally cannot be assigned, though an option generally can be unless it otherwise provides.
What are the five ways in which an offeree can accept an offer?
(1) By performing and making sure the offeror knows of it
(2) If a bilateral contract, by starting performance (only complete performance suffices for unilateral Ks)
(3) By promising to perform
(4) Sending an acceptance, if made "in a manner and by means invited" and offeree has not sent a rejection
(5) Seller sends goods, but accidentally sends the wrong ones
B faxes an order for tea to S, requesting immediate shipment. (1) Can S accept the offer by sending a fax PROMISING to ship the tea?
(2) What if S does not immediately ship the tea?
(3) What if B's offer stated that it could be accpted ONLY by shipment?
(1) Yes
(2) That is BREACH
(3) Then the promise has NO LEGAL EFFECT, so lack of shipment is not breach.
What happens if the offeror and offeree are in different places and they have conflicting communications about acceptance?
Generally, communications are effective when RECEIVED.

EXCEPT acceptances are effective when SENT, given that
(1) They are made in a manner and by a means provided, and
(2) The offeree has not already sent a rejection
Offer made on day 1.
Acceptance sent on day 2.
Revocation of offer received on day 3.

Is there a contract?
Yes! It was made on day 2. Why? A revocation does not take effect until it arrives.
What happens when a party accepts a contract by sending the wrong goods? By promising to send the right goods and then sending the wrong ones?
(1) A contract was formed, giving the offeror legal rights.
(2) By sending the wrong goods, the offeree breached his duties under the contract.
What is accommodation or explanation?
This occurs when an offeree cannot accommodate an offer, and instead of sending the requested goods, sends something else with the explanation "I don't have X, could you use Y?"

This is not a contract, and so there is no breach of K.
If two parties enter into a contract, and one party makes a mistake about some fact relating to the agreement, is the contract void?
No. If it is a UNILATERAL mistake, meaning only one party is mistaken, the mistake will not prevent formation of a contract unless the nonmistaken party is or had reason to be aware of the mistake. If so, the contract would be voidable.
Can a minor enter into a contract?

What if a minor enters into a contract and then breaches?
Generally, minors lack capacity to enter into a contract binding on themselves.

Minors can plead lack of capacity and disaffirm most contracts, which discharges the minor's liability. Refusal to make payments is a disaffirmance.

A minor is only bound to pay the reasonable value of necessities.
Does one have to have consideration to modify a contract?
Usually, yes.

However, one needs no consideration when the modification is to correct an error.
What is the doctrine of promissory estoppel under section 90 of the Restatement of Contracts?
It provides that a promise that the promisor SHOULD reasonably expect to induce ACTION or FORBEARANCE on the part of the promisee, and which DOES induce such action or forbearance, is binding IF injustice can be avoided ONLY by enforcement of the promise.
What does it mean when a contract term prohibits assignment of "the contract?"
That term bars ONLY the delegation of DUTY, not the assignment of the assignor's right to payment.
When a contract authorizes or requires the seller to ship goods by carrier, but does not explicitly require him to deliver them to a particular location, who bears the RISK OF LOSS?

Are there any exceptions?
In that situation, the risk of loss passes to the buyer when the goods are duly DELIVERED TO THE CARRIER.

Exception: if the goods are so defective that the buyer has a right to reject them, the risk of loss does not pass until the defects are CURED or the buyer ACCEPTS the goods.
Some agreements are not contracts.

What are the legal reasons for not enforcing an agreement?
(1) Lack of consideration or a consideration substitute
(2) Lack of capacity of the person who made the promise
(3) Statute of frauds
(4) Existing laws that prohibit the performance of the agreement
(5) Misrepresentations
(6) Duress
(7) Unconscionability
(8) Ambiguity in words of agreement
(9) Mistakes at time of agreement as to material facts affecting agreement
What is consideration?

What are the forms of consideration?
(1) Performance
(2) Forbearance
(3) Promise to perform
(4) Promise to forbear
** Beware of the "illusory promise" exception!
** Beware of the "past consideration" exception!
Do you ever consider whether the consideration is adequate to support the contract?
No! You just ask whether there WAS consideration, not whether it was adequate.
What is the exception to the general ban on past consideration?
Past consideration is valid when the act is EXPRESSLY requested and there is a known expectation of payment.
What is the "pre-existing legal duty" rule?
It applies to NON-GOODS only, in the COMMON LAW context.

It states that doing what you are already legally obligated to do is not consideration.
Are there any exceptions to the pre-existing legal duty rule?
Yes! Three.
(1) Addition or change in performance = a new legal detriment that can constitute consideration
(2) Unforeseen difficulty so severe as to excuse performance
(3) Third party promise to pay