Ks & Sales

Front 1

What is the definition of a contract?

Back 1

A legally enforceable agreement.

Front 2

How is an express contract created?

Back 2

Through words

Front 3

How is an implied contract created?

Back 3

Through conduct

Front 4

What is a quasi contract?

Back 4

An equitable remedy that applies whenever contract rules yield an unfair result.

It is designed to protect against unjust enrichment.

Front 5

What are the elements of a quasi-contract?

Back 5

1. P has conferred a benefit on D, and
2. P reasonably expected to be paid, and
3. D will be unjustly enriched if P is not compensated.

Front 6

What is the Measure of Recovery for a quasi-contract?

Back 6

Reasonable value of benefit conferred.

Front 7

What is the definition of a bilateral contract?

Back 7

The offer can be accepted in any reasonable way (flexible).

Front 8

What is definition of a unilateral contract?

Back 8

The offer can be accepted only through performance. A promise is not good enough.

Front 9

All contracts are bilateral unless what?

Back 9

Unless the offer says it can be accepted ONLY by performing.

Front 10

FIRST STAGE OF THE AGREEMENT PROCESS: OFFER

Back 10

Subject card

Front 11

Definition of an offer?

Back 11

Manifestation of an intention to enter into a contract.

Front 12

From whose perspective do you turn to for determining the acts of the offeror?

Back 12

From the perspective of a reasonable person - how an offeree would view offeror's actions.

Reasoning: To protect a reasonable offeree against the offeror's secret intent.

Front 13

Is an advertisment an offer?

Back 13

Usually NOT.

Front 14

SECOND STAGE OF AGREEMENT PROCESS: TERMINATION OF OFFER

Back 14

Subject card

Front 15

What is the effect of the termination of an offer?

Back 15

An offer can't be accepted if it has been terminated - it is dead.

Front 16

When does an offer lapse then?

Back 16

After a stated term, after a reasonable time has passed, or when the offeror revokes the offer.

Front 17

How can an offeror revoke an offer?

Back 17

Either directly or indirectly.

Front 18

What is a direct revocation?

Back 18

The offeror unambiguously indicates directly to the offeree that he has changed his mind.

Front 19

What is an indirect revocation?

Back 19

The offeror engages in conduct that unambiguously indicates that he has changed his mind AND the offeree is aware of this conduct.

Front 20

When is revocation of an offer effective?

Back 20

Only on receipt.

Front 21

General rule: Offeror can revoke at any time before acceptance.

But there are 4 exceptions to this, what are they?

Back 21

1. Option: a promise to keep the offer open that is paid for (consideration).
2. Forseeable reliance: offeror can expect offeree to accept and then rely. This is rare, but could be a contractor relying on subcontractor bid.
3. Beginning performance of an offer to enter a unilateral contract.
4. Firm offer under Art 2: signed, written promise to keep an offer open made by a merchant (broad definition)

Front 22

An offer also terminates when the offeree rejects the offer.

What are 3 examples that operate as a rejection?

Back 22

1. A counteroffer operates as a rejection, but mere bargaining does not.
2. A conditional acceptance operates as a rejection
3. An acceptance containing an additional term is a rejection under common law, but not under Art 2.

Front 23

What is the mirror image rule?

Back 23

Under the common law, an acceptance must mirror the offer!

Front 24

Under Art 2, acceptance need not mirror the offer. Why?

Back 24

The policy is to facilitate K formation.

Front 25

What are the 2 elements under Art 2 under Art 2's "no Mirror Image rule"?

Back 25

1. Additional terms do not prevent acceptance if price and quantity are unchanged.
2. But additional terms do not automatically become part of the contract.

Front 26

Under Art 2, when do additional terms become part of the contract?

Back 26

1. Both parties are merchants.
2. The term is not a "material" change, AND
3. Offeror does not object within a reasonable time.

Front 27

What does the death of either party before acceptance act as?

Back 27

It terminates a revocable offer.

Front 28

THIRD STAGE OF AGREEMENT: ACCEPTANCE

Back 28

Subject card

Front 29

What are the 4 methods of acceptance?

Back 29

1. Start of performance - acceptance of an offer to enter into a bilateral contract, but not an offer to enter into a unilateral contract (only full performance will do).
2. A return promise: an acceptance of an offer to enter into a bilateral contract, but not oan offer to enter into a unilateral K (only full performance will do).

Front 30

4 methods of acceptance (continued).

Back 30

3. Improper performance: usually operates as acceptance
4. Offeree's silence: Generally not acceptance.

Front 31

Effective Acceptance.
What is the Mailbox Rule?

Back 31

Acceptance is effective when mailed!
Policy: to protect the offeree against revocation; offeree can rely on having reached an agreement.

Front 32

What are the exceptions to the Mailbox Rule?

Back 32

1. Offer provides otherwise
2. Irrevocable offer
3. Acceptance, then rejection: mailbox rule applies unless the rejection gets there first AND the offeror relies on the rejection
4. Rejection, then acceptance: whichever arrives first is effective.

Front 33

DEFENSES AGAINST FORMATION

Back 33

Subject card

Front 34

What are the 4 major defenses against contract formation?

Back 34

1. D's lack of capacity to contract at the time of agreement.
2. Ambiguity of term
3. Mistake of Existing Fact (usually material fact)
4. Lack of Consideration or Substitute for It

Front 35

What are examples of D's lack of capacity to contract?

Back 35

1. Categories: infant under 18, intoxicated, mental incompetence.
2. An incapacitate D has the right to disaffirm/avoid the K
3. An incapacitated party can impliedly confirm a K by retaining the benefit of the K without complaint after he gains capacity.
4. An incapacitated party is liable for necessaries (food, shelter, med care, clothing), but only on a quasi-K basis.

Front 36

Ambiguity of term: what if the Buyer knows or has reason to know of an ambiguity?

Back 36

Then the K will be on the Seller's terms. The innocent party's meaning governs the K.

Front 37

What are the examples of Mutual Mistake?

Back 37

1. Mutual mistake
2. Unilateral mistake

Front 38

What if the mistake is as to value?

Back 38

Mistake as to value is not considered material. (mutual mistake)

Front 39

Under unilateral mistake, is one party's mistake fatal to the K?

Back 39

No, unless the one party is aware that the other party holds a mistaken belief, etc.

Front 40

Lack of Consideration Defense.
What is the definition of consideration?

Back 40

A bargained for legal detriment, such as promise, performance, or forbearance.

Front 41

What is past consideration?

Back 41

NOT consideration at all. Can't bargain for something that has been done in the past.

Front 42

Adequacy of consideration.

Back 42

IRRELEVANT.

Front 43

Are "requirements contracts" permissible under Art 2?

Back 43

Yes, even if there's no specific quantity mentioned.
However, a quantity cannot become completely different than other years, to where it seems unreasonable.

Front 44

What is the pre-existing duty rule as it relates to contract modifications?

Back 44

1. Common law: Must have consideration to modify a K.
2. Art 2: Can modify a K without consideration, but must show good faith

Front 45

When would part payment be considered?

Back 45

When part payment is consideration for a promise to forgive the rest of a DISPUTED debt.

Front 46

Is a written promise to pay a debt enforceable?

Back 46

Yes, even without consideration and even if the debt is no longer collectable b/c of the statute of limitations.

Front 47

What can serve as a substitute for consideration?

Back 47

Promissory estoppel - a promise and forseeable detrimental reliance on the promise.