Mbe K 2007

Front 1

Quasi K requires

Back 1

Quasi K is an equitable remedy. QK is NOT a K
1) Requires
(a) P has conferred benefit on D and
(b) P reasonably expected to be paid and
(c) D will realize unjust enrichment if P not compensated
2) Any time there’s inequitable unfair result, use QK
(a) I.e., suit for partial performance

Front 2

Bilateral K v Unilateral K

Back 2

1) Bilateral K results from an offer that is open as to method of acceptance
2) Unilateral K results from an offer that expressly requires performance as the only possible method of acceptance
(a) Reward, prize contest
(b) Offer expressly requires performance for acceptance
3) Almost all K are bilateral, and regardless, it doesn’t really matter.

Front 3

Overview
Armadillos from Texas Play Rap, Eating Tacos

Back 3

1) Applicable law
2) Formation
3) Terms
4) Performance
5) Remedies for breach
6) Excuse of nonperformance
7) Third Parties

Front 4

UCC Applies where?

Back 4

1) A sale
2) Of Goods—tangible personal prop.
3) For mixed svc/goods, what is the substance of the deal?
(a) Except: If K divides paymnt between svc & goods, apply UCC to goods & common law to services.

Front 5

Agreement requires

Back 5

Agreement requires offer & acceptance

Front 6

Offer defined:
Test for offer

Back 6

An offer requires
1) an expression of a promise, undertaking or commitment to enter into a K
2) certainty and reasonable definiteness of terms
3) communication to an identified offeree.

Front 7

Requirements/output K. Offer requires

Back 7

1) Offer for requirements or output K need not specify quantity
(a) Look for “all, only, exclusively, solely.” That’s a requirements/output K.
(b) Increase in requirements or output over life of K is permissible and enforceable, unless unreasonable or disproportionate. I.e. 1000lbs for 3 yrs, 4th yr orders 1020lbs. Enforceable requirements K.

Front 8

Methods of Termination
3 methods

Back 8

1) Lapse of time—time stated or reasonable time.
2) Words or conduct of offeror—i.e. revocation
3) Words or conduct of offeree—rejection

Front 9

Termination by revocation: 2 methods

Back 9

1) Express statement unambiguous by offeror to offeree of unwillingness, inability to K
2) Unambiguous conduct indicating unwillingness or impossibility. Offeree must be aware.
(a) Mere offer to another is not revocation. Not unambiguous.
3) Revocation effective upon receipt.

Front 10

What offers cannot be revoked
4

Back 10

1) Option if promise to keep offer open & consideration.
2) UCC Firm offer rule!
3) Reasonably foreseeable detrimental reliance. I.e. subcontractor revokes after contractor bases its winning bid on subK’s offer. irrevocable.
4) In Unilateral K start of performance makes offer irrevocable. “only by”
(a) Mere performance insufficient
(b) But is it detrimental reliance!?! Probably

Front 11

Termination by Rejection

Back 11

1) Offeree may reject by words or conduct
2) Indirect rejection 3 methods
(a) Counteroffer
(b) Conditional acceptance
(c) Additional terms

Front 12

Indirect rejection:
Counteroffer

Back 12

1) Counteroffer kills the offer--rejects and replaces it.
(a) But bargaining does not reject. “Will you take $$??” vs. “I’ll only pay $$” If response is a question, that’s bargaining!

Front 13

Indirect rejection: conditional acceptance

Back 13

1) Conditional acceptance is a counter offer.
(a) “I accept provided that...” That’s a rejection and counteroffer.
(b) What about conditional acceptance w new terms, and parties perform?

Front 14

Indirect rejection: additional terms in common law K

Back 14

1) Common Law K Mirror Image Rule
2) NOT UCC. Acceptance that adds new terms is a rejection and counteroffer.
3) If parties perform, there is a K, and new terms are included.

Front 15

UCC ADDITIONAL TERMS 2-207

Back 15

Look for offer to buy or sell goods, and response w additional terms.
1) 1st ask is there a K?
(a) Generally yes under UCC, if acceptance not conditioned on new terms
(b) Careful: setting out new terms vs. requiring new terms. I.e. “acceptance expressly conditioned on X.” if “conditional lang,” that’s a rejection & counteroffer.
2) 2d, are additional terms included?
(a) One not a merchant, then new term is out. But still a K!
(b) Both merchants? Additional terms included UNLESS
(c) Material additions or changes are out. But still K. EXAM tells you what’s material.
(d) If offeror objects to new terms in acceptance, then new terms are out.

Front 16

Termination of Offer by death or incapacity of either party.

Back 16

No deal where either party dies or is insane.

Front 17

Acceptance by whom?

Back 17

1) Acceptance by anyone who knows about the offer. I.e. to collect reward offeree must know of the reward
2) Offers can only be accepted by the person(s) to whom it was made
3) Offers not assignable
(a) Options are assignable

Front 18

Methods of acceptance
5

Back 18

1) Full performance is acceptance. (without communicating in response to offer)
2) Start of performance is acceptance. If offeree starts performance he is obligated to continue performance under the K.
3) Promise to perform is acceptance.
4) Mailbox rule: Or distance contracting.
5) Wrong gds sent is acceptance and breach! Accommodation exception where explanation offered—out of red, blue ok? No acceptance, counteroffer.

Front 19

CONSIDERATION DEFINED

Back 19

1) Bargained-for legal detriment.
2) Person specific & Promise Specific. Not is there consideration. But did this party receive bargained-for consideration
3) One promise can be consideration for another promise.

Front 20

Consideration 3 specific instances:
Past Consideration

Back 20

1) Past consideration: No consideration for prior conduct. Not bargained-for.
(a) Except where conduct expressly requested and there’s expectation of payment.

Front 21

Consideration 3 specific instances:
Legal duty

Back 21

1) At common law, a preexisting contractual or statutory duty generally is not consideration.
Under the UCC parties may modify K w/out consideration so long as modification is in good faith.

Front 22

Consideration 3 specific instances:
Lack of capacity

Back 22

Who lacks capacity
1) Mental incompetence—can’t understand agreement
2) Intoxicated if other has reason to know.
3) Infant under 18
4) If incapacity, K voidable, NOT VOID. For K law, capacity of plaintiff is irrelevant.
5) Affirmation implied if benefits retained after gaining capacity. I.e. over 18
4) Where incapacity, still liable for K for necessaries. Under quasi K theory. NOT CONTRACT LIABILITY.

Front 23

STATUTE OF FRAUDS
IMPORTANT

Back 23

1) Statute of frauds requires special proof that K exists.
2) Ask:
(a) Is K within the statute of frauds?
1. 6 types of K w/in SOF
(b) Is the statute of frauds satisfied?
(c) Is there a statute of frauds defense?

Front 24

K w/in statute of frauds
6

Back 24

1) Long term K—more than a year. If performance can’t be completed w/in a year of time of agreement, K is w/in SOF. Possibility of early termination is irrelevant.
(a) SOF doesn’t apply to lifetime deals.
2) Real Estate Transfer K. Except lease ≤ 1 year. Lease for 1 year NOT w/in SOF. All fee simple, easements, leases.
3) 6) Sales of goods ≥ $500. Careful services K for 2 years @ $400. But all other UCC applies. Just not 2-207 SOF
4) Promise in consideration of marriage. I.e. pre-nups.
5) Promises by estate administrator to pay decedent’s debts personally
6) Promises to creditors to answer for another person’s debts. Answer for=not just promise to pay debts but to pay if someone else does not.
Main Purpose Exception. Promise to pay if another does not, but purpose of debt was for promissors benefit. If we can show that alleged guaranteeor was the beneficiary, that supports the existence of the promise.

Front 25

Offer for real estate requires

Back 25

Offer for Real Estate requires term of price and reasonable description of property

Front 26

Offer:
Vague material terms

Back 26

At common law and under UCC, vague or ambiguous material terms void the offer

Front 27

Irrevocable Offer:
Firm Offer Rule

Back 27

2) UCC Firm offer rule!
(a) signed offer for gds by merchant. No payment required! Need not state time period. Court will set. Requires written promise not to revoke. Offer open for 3 months max.

Front 28

Methods of acceptance: Start of performance

Back 28

Start of performance is acceptance. If offeree starts performance he is obligated to continue performance under the K.
(a) If Unilateral K, requiring performance for acceptance, than performance means completion of performance. Full performance required for acceptance.
(b) But compare revocation of unilateral K vs. acceptance. One partial performance, offer irrevocable. But partial performance by offeree does not obligate completion under K. Paint house for $$. Once performance begins, offer irrevocable. But, not obligation to finish on the part of offeree.

Front 29

Methods of acceptance: start of performance

Back 29

Mailbox rule: Or distance contracting. Acceptance effective when sent if made by manner & means invited.
(a) If rejection and then acceptance, 1st received applies.

Front 30

Consideration: Preexisting legal duty
Common Law Exceptions

Back 30

At common law, despite preexisting duty, consideration is sufficient where:
1) addition to or change in performance
2) unforeseen difficulty so severe as to excuse performance
3) promise to perform made to 3d party

Front 31

Consideration: Past Debts

Back 31

1) Part payment. If debt is due & undisputed, then part payment is not consideration for promise to release. If not due or amnt disputed, part payment is consideration for promise to release.
2) Written promise to pay a debt that is barred by some defense like SOL—consideration substitute and enforceable K. the writing is the substitute.

Front 32

Consideration: detrimental reliance

Back 32

1) detrimental reliance (Promissory estoppel) is a consideration substitute. Requires:
(a) promise
(b) that is reasonable, detrimental and foreseeable
(c) enforcement necessary to avoid injustice
(d) i.e., no consideration because not bargained for, but may be promissory estoppel.
Not big on EXAM cuz requires judgment calls.