Mac 703 - Business Law - Part 3

Front 1

__________ of the _______________ governs the sale of ______________. A sale consists of _______________ from _____________ for ______. Includes both a present sale of goods and a contract to sell goods at a future time. Goods are defined as __________________. ________________ is defined as _______ other than land. General contract law (___________) governs all contracts outside the ________. For example the _______ doesn't apply to employment contracts, insurance contracts, and contracts involving ______ ________ (land and buildings on it).

Back 1

Article 2; Uniform Commercial Code (UCC); personal property; transfer of title to good from seller to buyer for a price; tangible personal property; personal property; property; common law; UCC; Code; real property;

Front 2

A contract is a ___________________ that the ________. A promise may be binding or nonbinding. Therefore all _________ are _______, but not all __________ are _______.

The 4 basic requirements of a contract are:
1. _______________ - the parties must make obvious that they have agreed to enter a contract.
2. _______________ - each party must give up something
3. ________________ - must not be criminal
4. _______________ - must have ability to enter into contract.

There also be an absence of ___________________ (ie duress). All elements must be present.

Back 2

binding agreement; courts will enforce; contracts; promises; promises; contracts

1. Mutual asset
2. Consideration
3. Legality of object
4. Capacity

invalidating conduct

Front 3

Parties may indicate asset either in words or by conduct implying such willingness. A contract formed by conduct is known as a _______________ contract. Example?
In contrast, a contract where parties manifest assent in words is known as a ________ ___________.

When a contract is formed by the exchange of promises, a _________ __________ is formed (if you PROMISE to mow my lawn, I will pay you $10 - agreed). Each party is a _______ (a person making a promise) and a _________ (a person to whom the promise is made).

However, if only one party makes a promise (ie if you WILL mow my lawn, I will pay you $10), the this is a ___________ __________. A contract is formed when the lawn is mowed, not before. The mower is under no duty to actually mow the lawn.

In cases where it is not clear whether there is a __________ ______ or a _________ ________, the courts assume a ____________ _________.

Back 3

implied in fact contract;
Ex: A customer with an account at a drugstore motions to the clerk a purchase he / she is making.
express contract;

bilateral contract; promisor; promisee;

unilateral contract;

bilateral contract; unilateral contract; bilateral contract;

Front 4

A ____ contract is one that meets all of the requirements of a binding contract (enforceable).

A _____ contract is an agreement that doesn't meet the requirements of a binding contract. It is NO contract, a promise with no legal effect. (ie ____________)

A ________ contract is a one in which the law permits one or more parties to avoid the legal duties the contract creates. (ie. a case of ________, the contract is not ______, but becomes so at the election of the ________ party.)

An __________ _________ is a contract for which a breach would not allow the plaintiff to be remedied. (ie a statue of limitations limits the time a party can bring a lawsuit for breach of contract).

An ________ _______ is one that is fully agreed upon / signed, and there it is partially / entirely unperformed. An _______ ________ on the other hand is a contract that has been _________________. Strictly speaking it is ____________ because ________________.

Back 4

valid

void; a contract with an incompetent;

voidable; fraud; void; aggrieved

unenforceable

executory contract; executed contract; fully carried out; no longer a contract; all duties under it have been performed;

Front 5

Non contractual promises are generally unenforceable. However, in certain circumstances courts enforce these promises under the doctrine of ___________ __________ in order to avoid ______. It is enforceable when the ________ reasonably expects the _________, in reliance on the promise, to be induced to take substantial action, and the _______ actually does take the action. Example?

________ ________ or ________ ________________ is not a contract, but a obligation imposed by law in order to avoid _____. The 3 requirements to impose this obligation are:
1. _______________________
2. _______________________
3. _______________________
These are used often to provide a remedy to parties entering into __________, ________, or __________.
Example?

Back 5

promissory estoppel; injustice; promisor; promisee; promisee;

Ex: Ben tells John he won't foreclose on a land for 6 months. John spends the money on home renovations; Ben promise is legally binding.

Quasi contracts; contracts implied in law; injustice;
1. the plaintiff grants a benefit to the defendant.
2. the defendant knows about / appreciates the benefit;
3. the defendant's retention of the benefit is inequitable.
void; voidable; unenforceable contracts;

Ex: Will accidentally gives Roy $100. Roy refuses to pay it back, no contract. Will is permitted to recover his $$ back.

Front 6

The way two parties involved in a contract usually show acceptance is by _________ and __________. To form a contract, the agreement must be indicated to the parties by spoken / written words, or by conduct. The law applies an __________ standard to the assent or agreement as it reasonably appears from the words or actions.
Example?

Back 6

offer; acceptance; objective;
Ex: Joanne seemingly offers Bruce her Chevy, but intended to offer him the Ford. Bruce accepts the offer, reasonably believing it was for the Chevy. Subjectively, the are not in agreement, but objectively, there is an binding agreement.

Front 7

An _______ is a definite undertaking or proposal by the ________ to the ________, indicating a willingness to _______________. In order for the _____ to take effect, it must be:
1. ______________
2. _______________
3. _______________
The _______ gives the ______ the power to form a contract upon ________.

Back 7

offer; offeror; offeree; enter into a contract; offer;
1. communicated to offeree
2. manifest an intent to enter a contract
3. be sufficiently definite and certain
offer; offeree; acceptance;

Front 8

Communication of the offer:

-An offeree must know about the offer.
-The offeror must communicate the offer ________________. Example?
- The communication to the offeree must ________________. Example?
- An offer need not be communicated by ___________.
- An offer may be made to ___________. No person can accept unless he knows it exists. Example?

Back 8

in an intended manner;
Ex: I write a letter to X, leave it on my desk, X comes in while I'm away and reads the letter and acccepts. No CONTRACT.

be made or authorized by the offeror;
Ex: Jones tells Black he will offer a piano to White. Black tells White about the intention. White cannot accept the offer then. Also, if he offered the piano to Black, White cannot accept that offer.

words; the general public;
Ex: Can't return a watch, then find out about the reward $, and be entitled to it. Had to know.

Front 9

Intent of the offer (part 1):

- Both parties must intend to enter a contract
- A person who ______________ when speaking words that could be _______________, does not make an offer. The ______ should not create a _____________ in the mind of the ________. *rare exceptions.
- A promise made __________________, is not an offer. (same reasons as above).
- Some language merely invites offers and lack intent to enter contracts; these include:
1. ________________ - if the communication creates in the mind of the offeree (reasonable) that his acceptance will ___________, then it is an offer. If not, then it is __________ __________.
Example?

Back 9

exercises a sense of humor; construed as an offer; joke; reasonable expectation; promisee

under emotional strain or obvious excitement;

1. preliminary negotiations; conclude a contract; preliminary negotiation.
Ex. "Will you buy this house for 400000?" "Yeah!" Not an offer, the contract is not concluded obviously.

Front 10

Intent of offer (part 2):

2. ________________ - as a general rule - these are not offers because ____________ and they leave unexpressed ___________________. However, a ________ is not free to __________ and then _____________. Although the ______ has made no offer, this is prohibited by the FTC / legislation. In certain circumstances, an ____________ can be an offer if it contains a definite promise.
Example?

3. ________________ - The persons _____________ make offers until a __________. The ___________ indicates a contract is formed. A _______ may _____________ at any time (this does not ______ any _________). An ________ may also __________, unless the ______ is __________ to be ___________.

Back 10

2. Advertisement; they don't contain promises; terms necessary to make a contract; seller; advertise one price; raise it to another; seller; advertisement
Ex: Minn Store offers fur coats for first 3 customers for only $1. Lefkowitz shows up first. Store says only applies to women, "House rule." this was a contract, b/c a definite promise was made.
3. Auction sales; attending an auction; bid is accepted; pound of a hammer; bidder; withdraw his bid; revive; previous bid; auctioneer; withdraw the goods; auction; advertised or announced; without reserve.

Front 11

Definiteness of the offer (part 1):

-The terms of the offer must be clear enough to provide the court with a reasonable basis for the ____________ and for giving ______________. Uncertainty as to incidental matters seldom prove fatal, as long as the parties ________ to form a contract. However, the more terms left open by the parties, __________________ ______________________.

With respect to the sale of goods, the ____ provides standards which allow courts to determine ______________. (ie. the contract fails to specify a price, payment terms, etc..) Also, an offer for the purchase / sale of good, may leave open ________________ to be specified by one of the parties. (must be made in __________ - honesty in fact in conduct - and within limits of ___________ _____________ - standard determined in terms of business judgment)

Back 11

determining the existence of a breach; an appropriate remedy; intend; the less likely that a contract actually exists.

UCC; omitted terms of the contract; particulars of performance; good faith; commercial reasonableness;

Front 12

Definiteness of an offer (part 2):


An _________ is an agreement of a buyer to _______ a seller's entire ________ for a stated period. A ___________ is an agreement of a __________________________ with all his requirements for certain goods. Even though the quantity ___________, and the _____ has control over ______ and the _________ has control over _________, the agreements are enforced based on _________ of both parties. Example?

Back 12

output contract; purchase; output; requirements contract; seller to supply a buyer; is not specified; seller; output; buyer; requirements; good faith;
Ex: Seller can't, post-contract, run a factory 24 hrs a day and insist a buyer purchase all inventory; buyer can't abnormally expand business and expect seller to provide all inventory.

Front 13

Duration of offers:

An offer confers upon the offeree, the power of acceptance, until the offer terminates; The ways an offer can be terminated is by:
1. ______________
2. ______________
3. ______________
4. ______________
5. ______________
6. ______________
7. ______________

Back 13

1. lapse of time
2. revocation
3. rejection
4. counteroffer
5. death or incompetency of offeror / offeree
6. destruction of the subject matter to which the subject matter relates
7. subsequent illegality of the type of contract.

Front 14

Duration of offers:

Lapse of time:

The offer only remains opens for the _________. Any purported acceptance of an expired offer, ____________________. If the offer does not _________, the offer will _________________.

Revocation:

The __________ may ______ an offer __________________. If an offer was originally open for 30 days, but the offeror wishes to cancel it after 5 days, he may do so upon __________________ notice of the termination. An offer to the public is revoked by ________________ equivalent __________. Notice of revocation can also be communicated _____________ or by the offeree learning indirectly of ______________________.
Example?

Back 14

specified time; will only serve as a new offer; state an expiration date; terminate after a reasonable time;

offeror; revoke; at any time prior to its acceptance; the offeree receiving; giving the revocation publicity; to the offer itself; indirectly through a third party; the offeror's unwilingness or inability to perform the promise;
Ex: Aaron offers Ted a TV. Before expiration, Ted observes the TV at Celia's house, and informed that he sold it to her. Can't accept offer after this.

Front 15

Duration of offers

Revocation (part 2):

Certain limitations restrict the offeror's power to revoke the offer at any time. These include:
1. _________________ - an _______ is a contract in which the offeror is bound ___________ for a specified time. Offers in this instance are _________. Example?
2. _________________ - a ______ is bound to keep an offer to ___________ open for a stated period (no more than _______) if the ______ gives assurance in ________. This is known as a __________ (article ______)
3. _________________ - certain offers, such as _______ for the __________ are made _______ by ________.
4. _________________ - ______ may occur from __________ because a _______ isn’t ______ until the ______ has _______ the act. Example? The _______ state that where _____ of the act requires the _____ to _____________, the ______ is obligated _______ the offer for a ___________.
5. _________________ - Example?

Back 15

1. option contract; option; to hold open an offer; irrevocable;
Ex: Ellen pays Barry $500 to hold open a offer for 30 days to buy a house worth $100,000.
2. Firm Offers (UCC); merchant; buy or sell goods; 3 months; merchant; signed writing; firm offer; (2 - 205)
3. Statutory Irrevocably; bids made to the government; construction of buildings; irrevocable; statue;
4. Irrevocable Unilateral Offers; injustice; unilateral contracts; contract; formed; offeree; completed;
Ex: "If you put some coffee in my hand, I'll pay you $100.” He almost puts it in my hand “I revoke!”
Restatements; performance; offeree; expend time and effort; offeror; not to revoke; reasonable time.
5. Promissory Estoppel; Plumbing Co submits written offer to Contracting Co, as part of general bid. Plumbing Co cannot revoke offer until after the Contracting Co hears back about the bid.

Front 16

Duration of offers:

Rejection:

An offeree may reject an offer ________ or ________ by waiting until the offer ______. The effective moment of rejection is _______________. A communicated rejection ______________________.

Counteroffer:

A counteroffer, generally operates as a __________, by indicating ______________ to the terms of the offer. However exceptions can occur if there is indicated a willingness to accept the original offer. Example? ______________ is similar where the offeree accepts the original offer, contingent on additional terms. (essentially a rejection)

Termination by operation of the law:

1. ________ or _________ - if this happens to the offeror or offeree, the offer is terminated (Except in the case of an __________).
2. ___________ of ________.
3. ________________.

Back 16

formally; implicitly; expire; receipt of the rejection by the offeror; terminates the power of acceptance

rejection; unwillingness to agree;
Ex: Will tells Jo he will sell the TV for $300. Jo says she will pay $250. This terminates original offer; However, if Jo says, she will consider the $300 offer, but is willing to pay $250 now. This indicates a willingness to agree to original terms and does not terminate original offer.
conditional acceptance;

1. Death or incompetency; option contracts
2. Destruction of Subject Matter
3. Subsequent Illegality

Front 17

Acceptance:

For a _____ contract, acceptance is some overact act that manifests _____, such as communicating to an offeror.

For a _____ contract, acceptance is ______ of requested act with intention of accepting. Notice of ______ is usually ______. However, if the _____ has reason to know that the ______ will not know of the __________, then the _____ must, with ______, notify the offeror.

Although _____ does not indicate _____, sometimes an offeree's _________ may operate as __________. (This happens when ______'s previous dealings with the _______ have given him reason to understand the _____ will ______ all ______, unless the ____ sends _______________. (ie. example - a ______ club - you need to send a _____ card, otherwise you ______ the goods.) Furthermore if an _____ sends ________ merchandise to a person, stating that goods _______ at a _______, and that the offer will be deemed _____ unless ___________, the offer is known as an _____. The gov't has enacted statues to fight against this.

Back 17

bilateral; assent;

unilateral; perfomance; acceptance; not required; offeree; offeror; offeree's performance; offeree; reasonable promptness;

silence; acceptance; silence; acceptance; offeror; offeree; offeree; accept; offers; offeree; notice to the contrary; mail-order; rejection; accept; merchant; unsolicited; may be purchased; specified price; accepted; the goods are returned; inverted unilateral contract;

Front 18

Effective Moment:

Offers, revocations, rejections, and counteroffers are effective ______. An acceptance is effective ________. This is true unless:
1. ____________ - if the offer specifies the ______ for acceptance, it must conform. If the offer provides that ______ must be ______ by ______, then ______ is not _______ when _________. (ie. an offer says it must be received by 7/15, then the moment of acceptance is when ______).

2. ________ - Historically (important), the __________ was stipulated in the offer, or if none, then the _____ that the ______ used to ______. (ie. if offeror uses the mail, then, the offeree can use the mail. It is ______ if the letter is ______ and not ______ by the ____.)
Generally (NOW) though, an _______ is usually any _______ of communication. If _______ are used, then _______ is ______ when and if ________ (provided offer not expired) (Restatements - if these conditions met, ________ is ______ upon _____)

3. _______ - the _____ the offeror ____ is _____. All else = ____.

Back 18

when they are received; upon dispatch;
1. Stipulated provisions in the offer; means of communication; acceptance; received; offeror; acceptance; effective; dispatched; the acceptance is received;

2. Authorized means; authorized means; means; offeror; communicate the offer; irrelevant; lost; received; offeror; authorized means; reasonable means; unauthorized means; acceptance; effective; offeror receives it; effective time of acceptance; moment; dispatch;

3. Acceptance following a rejection; first communication; receives; effective; new offers;

Front 19

_______ acceptance - one that contains different / additional terms;

1. Under ________ = an acceptance must be a _______ _______ of the offer, anything less is a _________.

2. Under _______ = The _____ attempts to alleviate the ___________ _______ (explain?). There is _______ acceptance with ________ terms if the
1. ______________
2. ______________
3. ______________
However, during ______ of terms, because the _____ did not accept the new terms, the courts are generally _______ towards them. 3 ways Article 2-207 handled:
1. Offeror's terms control - ________ have this
2. _________ Rule - court makes new rules acc. to UCC
3. Apply additional terms provision.

Back 19

variant;

1. common law; mirror image; counteroffer

2. UCC; Code; battle of the forms (a buying firm will fax over a purchasing order with favorable provisions to the buyer, a seller sends acceptance form with favorable provisions to the seller - the Code attempts to regulate the realities of modern business - in theory, not contract is formed if offeror does not send acceptance of new terms, not under Code there is a contract)
unconditional; additional
1. contract is between merchants;
2. the new terms don't materially alter the contract;
3. the offeror doesn't object to the new terms;
conflict; offeror; favorable; majority of states; Knock out;