Contracts I

Front 1

Ifa contract is solely for the sale of goods (i.e., tangible,movable items), what governs? What if parties are merchants?

Back 1

UCC Article 2 regardless of whether the parties are merchants

Front 2

Article 2 governs the sale of ordinary goods and ?

Back 2

custom-made goods

Front 3

Ifthe contract involves only non-goods (i.e., real estate, services, orintangibles), what governs?

Back 3

common law

Front 4

What if the contract involves both goods and non-goods?

Back 4

the primary purpose of the contract governs

Front 5

What do courts examine to determine the primary purpose of the transaction (4)?

Back 5

(1) The language of theparties' contract;

(2) The nature of thebusiness of the supplier of the goods and non-goods (e.g., service);

(3) The reason theparties entered into the contract (i.e., what each bargained to receive); and

(4) The respectiveamounts charged under the contract for goods and for non-goods

Front 6

A "deal" consists of what 3 parts?

Back 6

(1) An offer; (2) Which is “alive” atthe time of the attempted acceptance; and (3) A proper acceptance

Front 7

What are the 3 types of ks?

Back 7

(1) express ks; (2) ks implied in fact; and (3) ks implied in law

Front 8

How is mutual assent established for an express k?

Back 8

mutual assent established by the parties language?

Front 9

How is mutual assent established for k implied in fact?

Back 9

mutual assent established by the parties conduct (e.g. silently accepting benefits where it is reasonable to assume the other party expects compensation)

Front 10

How is mutual assent established for k implied in law?

Back 10

Theseare not contracts, so there is no mutual assent. A quasi-contract is simply a(restitution) remedy used to avoid unjust enrichment.

Front 11

What are the 3 components of a valid offer?

Back 11

(1) INTENTon the part of the offeror to enter into an immediate deal; (2) The CONTENT of the offermust be sufficiently definite; and (3) COMMUNICATION of theoffer to the offeree

Front 12

INTENT on the part of the offeror to enter into an immediate deal?

Back 12

Definition: a present manifestation by the offeror to beimmediately bound by the offer

Front 13

How is the offeror's intent measured?

Back 13

The offeror’s intent is measured objectively

Front 14

If two offers cross in the mail that have identical terms, does this create a contract?

Back 14

NO

Front 15

The CONTENT of the offer must be sufficiently definite

Back 15

Ideally,the offer should identify the parties, the subject matter, the price, and thetime of performance.

Front 16

What items are essential in the CONTENT of the k (3)?

Back 16

Certain terms are essential:

(1) For real estate contracts: there must be a price and an adequate description of the land;

(2) For UCC contracts: there must be a quantity term, except for requirements and outputs contracts;

(3) For employment contracts: there must be a duration (no duration results in an at-will contract)

Front 17

Are advertisements and catalogs are generally offers?

Back 17

NO

Front 18

2 Key points on COMMUNICATION of the offer to the offeree (who may accept offer)?

Back 18

(1) Onlypersons aware of the offer may accept; (2) Onlypersons to whom the offer was directed may accept (i.e., offers are notassignable, but option contracts are assignable)

Front 19

Are Option Contracts are assignable?

Back 19

YES

Front 20

What are the 3 ways an offer may die before acceptance?

Back 20

(1) By its own terms; (2) revocation by operation of law; (3) revocations by the offeror

Front 21

By it's own terms means?

Back 21

Theofferor is the “master” of the offer. As such, she may place a specific limit(e.g., one day or five minutes) on the time to accept. If no such limit isplaced on the offer, the offer is open for a reasonable time.

Front 22

Revocations by operation of law mean (3 areas)?

Back 22

An offer isautomatically revoked (regardless of the other party’s knowledge) by the:

(1) Deathor the adjudicated incapacity of the offeror or offeree;

(2) Interveningillegality or destruction of the subject matter;

(3) Non-adjudicatedinsanity of the offeror or offeree (but knowledge of the other party isnecessary for this type of revocation to be effective)

Front 23

Revocation by the offeror means? 2 ways this may occur?

Back 23

As a general rule, theofferor may revoke an offer anytime prior to acceptance. This may occur by:

(1) Anunambiguous verbal revocation communicated by the offeror to the offereeprior to acceptance;

(2) Unambiguousconduct by the offeror indicating revocation (e.g., item sold to another) communicatedby the offeror or a reliable third party to the offeree

Front 24

When is a revocationeffective?

Back 24

(1) A revocation iseffective upon receipt by the offeree;

(2) Revocations by theofferor must pre-date the acceptance.

Front 25

Mailbox Rule is what?

Back 25

Insome cases, acceptances are effective upon dispatch (e.g., mailing), butrevocations are always effective upon receipt by the offeree; thus, it ispossible that a revocation will be communicated to the offeree prior to thereceipt of the acceptance by the offeror (because it’s still in the mail) butsubsequent to the mailing of the acceptance; in such cases, the revocation isineffective.

Front 26

4 Exceptions to revocable offers (when is an offer non-revocable)?

Back 26

(1) Option contracts; (2) a merchant's firm offer (UCC rule only); (3) Detrimental reliance; (4) Unilateral contracts

Front 27

What are option contracts?

Back 27

optioncontracts that have independent consideration, even nominal consideration

Front 28

What is a merchant's firm offer? time frame for this exception?

Back 28

anoffer to buy or sell goods made by a merchant in a signed writing inwhich the merchant promises to hold the offer open for a stated time (ora reasonable time if no precise time is stated); such “firm offers” are irrevocablefor the stated time (or reasonable time), but in no event more than 90 days (note:if the offer provides for a longer period, the offer may still be acceptedafter 90 days if it has not been revoked; the 90 day period is simply themaximum period of irrevocability)

Front 29

Detrimental reliance is?

Back 29

theofferee has detrimentally relied on the offer (and, in most cases, on theofferor’s promise to hold the offer open) and that reliance was reasonablyforeseeable by the offeror (e.g., when a general contractor makes a bid to anowner, the general contractor relies on the bids of subcontractors)

Front 30

Unilateral ks are?

Back 30

ifthe contract is unilateral in nature (i.e., its language expressly limitsacceptance to complete performance), and the offeree has commenced performance(something more than mere preparation to perform), the offeree must be given areasonable time to complete performance (but note: the offeree is not bound to completeperformance unless it was a bilateral contract)

Front 31

What are "revocations" by the offeree?

Back 31

Theofferee may also “revoke” an offer. When an offeree revokes an offer, it iscalled a “rejection.”

Front 32

What are the 3 methods of rejections?

Back 32

(1) counteroffer; (2) express rejection; (3) conditional acceptance

Front 33

General Definition and 2 Caveats for counteroffer?

Back 33

General: a counteroffer by theofferee permanently revokes the offer and, in fact, constitutes a new offer

Caveats: (1) Mereinquiries alone (“Will you take $9,000?”) are not rejections; (2) Insome cases, the original offer may be revived after a counteroffer

Front 34

What is an express rejection? What is the effective date of rejection?

Back 34

“No thanks.”

Effective Date of Rejection: rejections (express orotherwise) are effective upon receipt by the offeror

Front 35

What is a conditional acceptance?

Back 35

A conditional acceptance(“I accept if [or but or provided that or on the condition that or so longas”] . . . is a rejection and permanently revokes the offer

Front 36

Mirror Image Rule at common law?

Back 36

ifthe offeree adds terms to the acceptance, this constitutes a counteroffer and arejection

Front 37

Mirror image rule for UCC? What 2 questions to ask?

Back 37

If an offeree adds aterm (“I accept and ....”) to the acceptance, ask two questions:

(1) Isthere a contract?;

(2) Doesthe deal include the additional term?

Front 38

Who may accept an offer?

Back 38

(1) Only those who know ofthe offer (beware of reward cases where the finder is unaware of the offer ofreward);

(2) Only those persons towhom the offer was made (offers may not be assigned nor accepted by bystandersto whom the offer was not directed)

Front 39

May Options contracts be assigned?

Back 39

YES

Front 40

How may an offer beaccepted?

Back 40

The offeror is themaster of the offer and may limit the form of acceptance (e.g., by fax only).

Front 41

In what 2 ways may an offeree accept bycommencing performance?

Back 41

(1) bilateral ks; (2) unilateral ks

Front 42

Bilateral k may be accepted in what 2 ways?

Back 42

May be accepted byeither:

(1) a promise to perform (communicated to offeror); or

(2) commencementof performance. In the latter case, the offeror must have reasonable “notice”that performance has started

Front 43

What is the presumption as to ks?

Back 43

Contracts are presumed to be bilateral

Front 44

Unilateral k's?

Back 44

mayNOT be accepted by commencing performance. An offeree is not bound by starting performance in a unilateralcontract, but commencement of performance prevents the offeror from revokingthe offer for a reasonable time.

Front 45

Unilateral ks are limited to what (2)?

Back 45

Unilateralcontracts are limited to (1) those that expressly require completion ofperformance as acceptance; and (2) offers to the public, such as rewards orprizes. Unilateral offers may be accepted only by full performance

Front 46

Mailbox Rule: can you accept by mail?

Back 46

If it is reasonable toaccept by mail (e.g., usually means the offer was mailed and did not limit themethod of acceptance), the acceptance is effective upon posting. The offer maynot be revoked by the offeror after such posting (because revocations areeffective upon receipt by the offeree).

Front 47

What iif an offeree rejects an offer by mail and then decides to accept the offer?

Back 47

His acceptance will be valid if it arrives before the rejection

Front 48

What if the offeree accepts by mail but then sends a rejection, is there a contract?

Back 48

Yes, unless the rejection arrives first and the offeror relies on the rejection to his detriment.

Front 49

For option contracts, what must happen for there to be a contract?

Back 49

The offeror must “receive” the acceptance (i.e., exercise) to have a contract.

Front 50

A UCC offer may be accepted by a prompt (3)...?

Back 50

(1) Promise to ship;

(2) Shipment of conforminggoods;

(3) Shipment ofnon-conforming goods

Front 51

What does shipment of non-conforming goods constitute?

Back 51

Acceptance and a breach ofcontract

Front 52

Accommodation is what?

Back 52

If the seller sends non-conforming goods as an “accommodation,” there is no acceptance and thus no breach of contract.

Front 53

When does an accommodation occur?

Back 53

When the seller notifies the buyer (before or with the shipment) that the goods are non-conforming but are being sent anyway.