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47 Cards in this Set

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§24.
An offer is the manifestation of willingness to enter into a bargain, so made as to justify
another person in understanding that his assent to that bargain is invited and will conclude it.
OFFER DEFINED
§26.
A manifestation of willingness to enter into a bargain is not an offer if the person to whom
it is addressed knows or has reason to know that the person making it does not intend to conclude
a bargain until he has made a further manifestation of assent.
PRELIMINARY NEGOTIATIONS
§33.
Even though a manifestation of intention is intended to be understood as an offer, it
cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain.
CERTAINTY
§ 2-204.
Even if one or more terms are left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
Formation in General.
§42.
An offeree's power of acceptance is terminated when the offeree receives from the offeror
a manifestation of an intention not to enter into the proposed contract.
REVOCATION BY COMMUNICATION FROM OFFEROR RECEIVED BY
OFFEREE
§43.
An offeree's 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.
INDIRECT COMMUNICATION OF REVOCATION
§45.
Where an offer invites an offeree to accept by rendering a performance and does not invite
a promissory acceptance, an option contract is created when the offeree tenders or begins the invited
performance
OPTION CONTRACT CREATED BY PART PERFORMANCE
§25
a promise which meets the requirements for the formation of a K and limits the promisor’s power to revoke an offer
Option Contract
UCC 2-205
an offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated (not to exceed 3 months)
Firm Offers
§59.
A reply to an offer which purports to accept it but is conditional on the offeror's assent to
terms additional to or different from those offered is not an acceptance but is a counter-offer.
PURPORTED ACCEPTANCE WHICH ADDS QUALIFICATIONS
§ 61
An acceptance which requests a change or addition to the terms of the offer is not thereby invalidated unless the acceptance is made to depend on an assent to the changed or added terms
Acceptance Which Requests Change Of Terms
UCC 2-207(1)
An acceptance which includes additional terms still qualifies as an acceptance so as to form a K unless that acceptance is conditional on the offeror’s acceptance of the additional terms (proviso clause).
Battle of the Forms
§ 63
an acceptance is valid upon dispatch by the offeree except in the case of an options contract, in which acceptance is valid upon receipt by the offeror
Mailbox Rule
§ 66
an acceptance sent by mail or otherwise from a distance is not operative when dispatched unless it is properly addressed and other precautions are taken to insure its safe transmission
Mailbox Rule cont.
§ 50
A unilateral K may be created by performance
Acceptance by performance
§ 54
Notification of acceptance is not required in a unilateral contract UNLESS the offer requests such notification. Also, if the offeree who accepts by performance has reason to know that the offeror had no means of learning of the performance with reasonable promptness and certainty, the contractual duty of the offeror is discharged.
ACCEPTANCE BY PERFORMANCE; NECESSITY OF NOTIFICATION TO
OFFEROR
§ 69
Acceptance by silence occurs:
1) When the offeree benefits from the goods/services after having time to reject them and has reason to know that the offeror expected compensation
2) When the offeror informs offeree that silence will mean acceptance
3) Prior dealings
ACCEPTANCE BY SILENCE
Ambiguous terms
those that can have more than one meaning
Vague terms
those whose meaning can be broadened or narrowed
§ 201
if one party knew what the other party meant even though a different term was put down, the term that’s used is the one of the clueless party; however, if neither party had any idea that the other party meant something different, the K fails for lack of mutual assent.
WHOSE MEANING PREVAILS
UCC 2-305
the parties if they so intend can conclude a contract for sale even though the price is not settled. In such a case the price is a reasonable price at time of delivery. When a price left to be fixed otherwise than by agreement fails to be fixed through the fault of one party, the other may treat the contract as cancelled or fix a reasonable price.
Open price term
UCC 2-308
unless otherwise agreed, the place for delivery of goods is the seller’s place of business or if he has none his residence
Absence of specified place for delivery
illusory promise
leaves complete discretion to perform or not in the hands of the purported promisor
UCC 2-306(2)
the parties are bound to use reasonable diligence as well as good faith in their performance of the K
Exclusive dealings Ks
UCC 2-306(1)
A term which measures the quantity by the output of the seller or the requirements of the buyer means such actual output or requirements as may occur in good faith
Requirements contracts
Last Shot Rule
CL rule that states that, whomever sent the last form will be able to control the terms of the contract
UCC 2-207(2) K based on writings b/w non-merchants
additional terms are mere proposals
Battle of the Forms
UCC 2-207(3) K based on conduct
1) Knock out the terms on which the parties disagree
2) Fill in the gaps with supplementary terms provided by UCC.
(the minority rule is to treat different terms the same as additional terms.)
Battle of the Forms
UCC 2-207(2) K based on writings b/w merchants
the additional terms are binding unless:
1) The offeror has reimposed the Mirror Image Rule
2) Notice of objection has already been given or is given within a reasonable time after notification, or
3) The terms materially alter the K (they would cause hardship or surprise)
Battle of the Forms
UCC 2-601
A rejection after an opportunity to inspect may be effective unless the buyer manifests acceptance in the manner invited by the offeror The majority view is that additional terms are part of the contract - based on public policy and market welfare. The scholarly view is that 2-207 should apply.
Later Arriving Terms
§209
Integrated agreement: intended to be a final writing of agreement, and at least one of the terms is agreed to
Integrated agreement
§210: Partially integrated
that which isn’t a completely integrated writing.
§210: Completely integrated
a writing that purports to include all the terms of the agreement.
Consistent additional terms
those that in the circumstances might naturally be omitted from the writing. Test under the UCC: Is this term such a big deal that, would it had been agreed on, it certainly would have been included in the writing
Parole Evidence allowed:
a. Partial: some terms – but not all – have been put down
i. Consistent additional terms: in (inconsistent: out)
ii. Contradictory terms: out
iii. Course of performance, course of dealing, usage of trade: in
b. Complete: a complete and exhaustive list of what has been agreed to
i. Consistent additional terms: out
ii. Contradictory terms: out
iii. Course of performance, course of dealing, usage of trade: out (in for UCC)
§ 110
contracts that must be put in writing to be valid:
a. Sale of goods for $500 or more
b. Land
c. Contracts that, on their face, cannot be completed in one year
the Statute of Frauds
Statute of Frauds: 3. Requirements of the writing itself
a. Restatement
i. The document must be in writing and must evidence the fact that a K was entered into
ii. The document must be signed by the party against whom enforcement is sought
iii. All essential terms must be listed
b. UCC – Same except only the quantity term must be present
Consideration:
an act, forbearance, or the promise thereof done or given by one party in return for the act or promise of another
§ 71
i. Bargain Theory of Consideration: to constitute consideration, a performance or a return promise must be bargained for (there must be mutual inducement)
§89.
A promise modifying a duty under a contract not fully performed is binding
1) if the modification is fair in view of circumstances not anticipated when the contract was made; or
2) to the extent that justice requires enforcement in view of material change of
position in reliance on the promise.
MODIFICATION OF EXECUTORY CONTRACT
UCC 2-209
K modifications need no consideration to be binding but must comply with 2-201
K modifications
§ 79
courts generally do not inquire into the adequacy of the consideration because consideration “value” is a subjective judgment
Adequacy of Consideration
§ 79 comment d
Disparity in value indicates nominal consideration, which only supports option Ks.
Nominal Consideration
§ 86
A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent it is necessary to prevent injustice(check §71 first).
2. A promise is not binding under subsection (1)
a) if the promisee conferred the benefit as a gift
b) if the promisor has not been unjustly enriched; or
c) if its value is disproportionate to the benefit
Material Benefit Rule/Promissory Restitution
§139
A promise which the promisor should reasonably expect to induce action or forbearance
on the part of the promisee or a third person and which does induce the action or forbearance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement
of the promise. The remedy granted for breach is to be limited as justice requires.
ENFORCEMENT BY VIRTUE OF ACTION IN RELIANCE
§90
(1)A promise which (2) the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and (3) which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires.
Promissory Estoppel
Promissory Estoppel
1. PE as a substitute for consideration
a. Expectancy damages
2. PE as a separate recourse
a. Reliance expenses