Mbe - Contracts - Formation Of Contracts

Front 1

What is a contract?

Back 1

An agreement that is legally enforceable.

Front 2

What is an offer?

Back 2

A manifestation of the intent to enter into a contract.

Front 3

Must an offer contain all material items of the agreement?

Back 3

No.

Front 4

What must an offer include?

Back 4

Real estate - Price and description, Goods, no price requirement, but quantity

Front 5

vague or ambiguous offer ever an offer?

Back 5

No, vague o ambiguous material terms are never an offer under CL or UCC

Front 6

If B agrees to buy "all of its soap" from A, and in the third year of this production contract he buys %100 morethan the year before, this is likely an unreasonable

Back 6

increase in quantity.

Front 7

What sort of contract for the sale of goods does not require that a specific quantity be named?

Back 7

Production Contract

Front 8

What are the Four ways to terminate an offer?

Back 8

1. Lapse of time.

2. Revocation by Offeror

3. Rejection by Offerree

4. Death of a Party

Front 9

When can an offer be accepted after termination of an offer?

Back 9

Never

Front 10

For TIme Lapse Termination, what amount of time is typically considered "reasonable," for purposes of MBE?

Back 10

30 days.

Front 11

What is revocation

Back 11

Clear Statement, from offerror to offerree, of inability or unwillingness.

Front 12

If an offeree learns of offerors offer of the same to another, does his knowledge count as revocation?

Back 12

Yes.

Front 13

When does revocation by mail take effect.

Back 13

Once the revocation is received.

Front 14

Under what circumstances can an offer or revoke his offer?

Back 14

Freely, at any time?

Front 15

What sort of contract is not freely revocable.

Back 15

An option contract

Front 16

What is an option contract?

Back 16

Promise to keep offer open, supported by consideration.

Front 17

What 3 conditions must be met for a valid option contract?

Back 17

1. Sale of Goods.

2. Signed written promise to keep the offer open

3. The offering party is a merchant.

Front 18

For purposes of revocation, what is a merchant?

Back 18

A merchant is a person - who deals in a type of goods involved in a contract, or holds themselves out as having special knowledge about that type of goods.

Front 19

When does reliance upon an offer preclude that offers revocation

Back 19

When reliance upon that offer was reasonably foreseeable.

Front 20

What effect does the start of performance on a unilateral contract have on revocability of an offer?

Back 20

Offer is irrevocable for a reasonable time to allow for completion of performance.

Front 21

What is a Unilateral Contract?

Back 21

A contract wherein complete performance is the only possible method of acceptance.

Front 22

Can Offerror revoke once offerror has made preparations?

Back 22

Yes, mere preparations are not performance.

Front 23

Are advertisements or price quotations considered offers?

Back 23

No, they are invitations for others to make offers.

Front 24

When can an advertisement constitute an offer?

Back 24

When the ad specifies 1. Quantity to be delivered and 2. Who can accept it.

Front 25

Can "reasonable time" for termination be included in the terms of an offer?

Back 25

Yes

Front 26

Other than a "Reasonable time", how else can an offer include terms for termination?

Back 26

Expiration Date.

Front 27

When B learns of A's offer to sell to another, why does offer to another, why does this knowledge constitute revocation to first offeror?

Back 27

It constitutes unwillingness.

Front 28

What is longest an option can stay open?

Back 28

Three months.

Front 29

What is rejection

Back 29

Words or conduct of an oferree indicating his rejection of A's offer.

Front 30

Does bargaining count as a counter-offer?

Back 30

No.

Front 31

Describe an example of the difference between bargaining and a counter-offer.

Back 31

Ex: "Will you take $400" vs. "I'll give you $400."

Front 32

What are the four types of rejection?

Back 32

1. Counter Offer
2. Indirect Rejection
3.

Front 33

What effect does conditional acceptance of an offer have on the original offer?

Back 33

Terminates the original offer, creates a new offer.

Front 34

Indirect Rejection - Difference between common law and UCC

Back 34

Common Law: Mirror Image Rule.

UCC - Additional terms are still an acceptance so long as they are a "seasonable expression" of acceptance.

Front 35

What is the Mirror Image Rule

Back 35

Acceptance is not valid if it contains additional terms, must be a "Mirror image".

Front 36

What is seasonal expression of acceptance?

Back 36

DON'T KNOW YET

Front 37

Under UCC, when do additional terms become part of a contract?

Back 37

When both parties are merchants, the terms do not materially alter the contract, and the offerror has not objected to the terms.

Front 38

Must a merchant own a store?

Back 38

No?

Front 39

How are additional terms handled when one or both parties are not merchants?

Back 39

Treated as a proposal, to be separately accepted or rejected.

Front 40

When does death of a party before acceptance NOT terminate an offer?

Back 40

1. When the offer is about an option.

2. Part performance.

Front 41

Who can accept an offer

Back 41

a person who knows about the offer, to whom the offer was made.

Front 42

Can B assign to C his ability to accept A's offer?

Back 42

No, unless its an option.

Front 43

Three ways to accept a contract

Back 43

1. Start performance, promise to perform, sends acceptance in the mail.

Front 44

Under what type of contract does the start of performance constitute acceptance?

Back 44

Bi-Lateral.

Front 45

Can a promise constitute acceptance of an offer to pay someone if they find a lost dog?

Back 45

No, that offers requires full performance for acceptance, and is an offer for a unilateral contract, so promising to find the dog does not constitute acceptance and there is no contract.

Front 46

When does acceptance by mail create a contract?

Back 46

When acceptance by mail is invited.

Front 47

What are the three exceptions to the mailbox rule (rule that acceptance by mail takes effect upon postage?

Back 47

1. When offerree includes additional requirements for acceptance.

2. When rejection by mail arrives before acceptance by mail, even if acceptance was posted first.

3. Option deadlines supercede mailbox rule: acceptance must be received by that date.

Front 48

When does acceptance by mail take effect?

Back 48

Once posted.

Front 49

Can silence be acceptance

Back 49

If B accepts that his silence is acceptance.

Front 50

Can B say to A "IF you don;t hear from me by Friday, I accept?"

Back 50

Yes, silence is acceptance when B agrees.

Front 51

What if seller sends wrong goods?

Back 51

Amounts to acceptance and breach.

Front 52

What if the seller sends the wrong goods with accommodation?

Back 52

Amounts to counter-offer.

Front 53

What are the steps to determine if there is an agreement is formed?

Back 53

1. An offer?

2. Was offer still outstanding when acceptance was attempted?

3. Was the acceptance defective?

Front 54

Where do courts lean in terms of formation law?

Back 54

Towards formation of contract.

Front 55

What are the elements of an offer?

Back 55

1. Intent to form a present contract.

2. Content - essential terms of the proposal.

3. Communication of that intention and those terms to the person intended as the offerree.

Front 56

How does state of mind bear on the "intention" element of an offer?

Back 56

Reasonable person in the place of the offerree must have concluded that the offerree intended an offer.

Front 57

What do you call the type of talk that might precede a contract but not constitute a K?

Back 57

Preliminary negotiations.

Front 58

What are the essential terms of a contract offer?

Back 58

1. Parties,

2. Subject Matter

3. Time

4. Price

Front 59

What of total silence by the parties with respect to 1 of the terms, how does the court handle this silence?

Back 59

As objective manifestation of intent to trade on a reasonable term.

Front 60

What is a "reasonable term" in the case of silence.

Back 60

Deduced from prior history between parties (course of performance), or else from customs and mores of the marketplace.

Front 61

What if, rather than silence on an essential term, there is ambiguity? WIll courts imply a reasonable term?

Back 61

No, this would be to create a bargain where there is none.

Front 62

How does the UCC expand and liberate the "essential terms requirement with respect to price?"

Back 62

1. Allows for merchants to use machinery or index to determine the value of an essential term at some point in the future. ex. price in trade journal.

2. Allows parties to agree upon the price at some date in the future.

Front 63

If the offerror makes no specification as to the lifespan of his offer, does the offer ever expire?

Back 63

Yes, after a "reasonable time,", which depends on the facts in question.

Front 64

What effect does death, legal incapacity, insanity of the offeror or destruction of the subject matter have on the life of an offer?

Back 64

Revokes the offer.

Front 65

Example of Supervening Illegality of the proposed Subject Matter?

Back 65

Gov't intervenes and declares the proposed bargain illegal.

Front 66

What are the four ways an offer can be resolved?

Back 66

Acceptance, Rejection, Termination, Revocation.

Front 67

What are the exceptions to the CL rule that offers are freely revocable?

Back 67

1. Option for consideration. Its own K, seperate consideration.

2. By Estoppel - detrimental change of position in foreseeable reliance on that promise, courts would preclude revocation.

3. UCC Firm Offer - If goods are the subject matter, an offer IN SIGNED WRITING by a merchant trader is irrevocable for up to 90 days.

Front 68

What is acceptance?

Back 68

Present, unconditional, unequivocal assent to every term in the offer?

Front 69

What i the mailbox rule

Back 69

K is formed effect with the dispatch of the acceptance, if communicated in any commercially reasonable manner.

One at least as fast and reliable as the one utilized by the offeror.

All risk of delay or misdelivery is born by the offeror, under mailbox rule.

Front 70

What if the acceptance is sent by a non-commercially reasonable form of communication?

Back 70

Effective upon receipt.

Front 71

Under CL Mirror image rule, can B accept the original terms after attempting to accept with alternate terms?

Back 71

No, the offer was killed by the non-mirror-image acceptance, which was instead a counter offer.

Front 72

Is there a way to preserve the OG offer while also proposing additional terms?

Back 72

Yes, explicitly state that you intend that you consider the OG offer but ask about other terms.

Front 73

What if, under CL mirror image rule, your acceptance makes explicit some terms that were implicit in the K?

Back 73

Not a mirror image per se, but acceptance, not a counter offer.

Front 74

IF goods are the subject matter, and both parties are merchants, how are offerree's additional terms be treated?

Back 74

A K is created with the offerror's terms, and the additional terms may or may not be included in that K.

Front 75

Under UCC, how is it determined whether the offeree's additional terms become part of the K?

Back 75

If they are consistent, they are included in the K, unless the offerror promptly rejects those consistent additional terms.

If the new terms are inconsistent, they are not included in the K, unless the offerror speaks up and assents to them.

Front 76

Under UCC, when are additional terms "consistent?"

Back 76

If the new terms "materially shift" the economic advantage of the transaciton, they are not consistent.

If the new terms materially reallocate risk from the allocation in the offer, they are inconsistent.

If any additional term attempts to make some remedy for breach unavailable that would otherwise have been available, it is inconsistent.

Front 77

What is patent ambiguity?

Back 77

When a term is obviously ambiguous, and no party clarifies, there is no K.

But, if the term should obviously be ambiguous to only one party and that party fails to clarify, K under ignorant party's understanding.

Front 78

When is a mistake of fact material?

Back 78

If the mistake goes to the "Very heart", or "the essence", courts grants complete relief.

Front 79

What happens if the mistake of fact is discovered after full performance?

Back 79

Much less likely to give relief than if the mistake were discovered when K was in "executory" stage, meaning not yet performed.

Front 80

When might unilateral mistake of fact provide grounds for cancellation?

Back 80

Mechanical miscalculation: mathematical miscalculation, or other mistake of assumption (bargain made not the bargain intended.)

Front 81

Under what circumstances is mechanical miscalculation a defense to a contract?

Back 81

If the other party subjectively did not know, and objectively a reasonable person should have had no grounds to suspect, then bound.

If the other party did know, or if a reasonable person should have known, he can invoke cancellation.

Front 82

What time of unilateral mistake is never grounds for cancellation?

Back 82

Errors in business judgment.

Front 83

What is the mechanical miscalcuation is due to the error of a 3rd party intermediary?

Back 83

You might have a cause of action against them, even if no defense against the contract.

Front 84

What method for deciding whether parol evidence rule need be applied:

Back 84

1. Is there an integrated writing? (both parties intended the written instrument as full and final expression of agreement?)

2. Parol Evidence? Evidence of any terms formed prior or contemporaneous to the integrated writing?

3. Impact of that parole evidence on the integrated writing? If it contradicts, vary, or adds to the integrated writing, inadmissible, subject to exceptions.

4. 3 EXCEPTIONS - parole evidence of fraud, or under a theory of theory of partial integration, or under a theory of collateral agreement.

Front 85

Four Corners Rule

Back 85

Only if writing looks incomplete on its face, then parole evidence gets in as evidence of partial integration.

Front 86

Liberal Parole Evidence RUle

Back 86

If offering party can show plausible evidence that the writing was only partially integrated

Front 87

Collateral Agreements

Back 87

Only gets in if as far lesser importance, and if no term contradict the integrated writing, and there must be RATIONAL daylight suggesting that they consider it a second agreement.