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39 Cards in this Set
- Front
- Back
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Meeting of the Mind |
A situation in which the parties understood each other and intended to reach an agreement. |
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Offer |
An act or statement that proposes definite terms and permits the other party to create a contract by accepting these terms. |
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Offeror |
The person who makes an offer. |
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Offeree |
The person whom an offer is made. |
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Which two questions determine whether a statement is an offer? |
Did the offeror intend to make a bargain? Are the terms of the offer definite? |
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Is a price quote generally regarded as an offer? |
No. A price quote is simply an invitation to make an offer. |
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Letter of intent |
A letter that summarizes the negotiation process. May not be considered an offer. |
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Consumer Protection Statute |
Statutes established by various states with the purpose of outlawing false advertisement. Generally these statutes applies to advertisements designed to deceive and entice customers, acting on bad faith in misrepresenting factual information. |
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Can an auctioneer withdraw an item once an offer has been made, if it is an auction with reserve? |
Yes |
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Can an auctioneer withdraw an item once an offer has been made, if it is an auction without reserve? |
No |
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Your uncle offers you a job for the holiday season from Nov 1st thorough January 15th at his store as a checkout clerk, for 40 hours a week, at a fair wage. If you accept, is there an enforceable contract? |
No. "A fair wage" is not a definite offer and is unenforceable in a court of law. |
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Two parties to a commercial contract creates a contract without establishing a set price of their good. However, both parties still exhibits an objective intention to create a contract. Do the parties have a contract? |
Yes, under the UCC, even if one or more terms of a contract for sale is left open, it does not fail for indefiniteness if the parties intended to make a contract and there is a reasonable basis for giving an appropriate remedy. |
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Output Contract |
An output contract obligates the seller to sell all of his output to the buyer, who agrees to accept it. |
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Requirements contract |
A requirements contract obligates a buyer to obtain all of his needed goods from the seller. |
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According to the UCC and without specification, where is the place of delivery for the sale of goods? |
The seller/buyer's business |
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According to the UCC and without specification, what is the time for shipping goods? |
A reasonable time, based on the normal trade practice. |
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According to the UCC and without specification, when is the payment for goods due? |
When and where the buyer receives the goods. |
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Implied warranty of merchantability |
A warranty that goods must be at least average, passable quality in the trade. |
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Implied warranty of fitness for a particular purpose |
A warranty requiring that if the seller knows that the buyer plans to use the goods for a particular purpose, the seller generally is held to warrant that the goods are in fact fit for that purpose. |
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What are four ways an offer can be terminated? |
Revocation, Rejection, Expiration, or Operation of law. |
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Firm Offer |
An offer that by its own terms will be held open for a given period. |
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Can a firm offer be revoked before the term date under the common law? |
Yes, as long as the revocation is received before the acceptance of the offer. |
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Can a firm offer be revoked before the term date during an option period? |
No. If the offeree has paid the offeror to keep the contract open, the offeror must keep the contract open until the end of the option date. |
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Can a firm offer be revoked under the UCC for merchant activities? |
No. The UCC requires that for sale of goods, the firm offer may not be revoked until the end of the firm offer period. |
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Once an offer is rejected, can the offeree later change their mind and accept the original offer? |
No, the original offer is no longer valid and cannot be accepted. A new offer must be made. |
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Jack offers Jill 50,000 for her Mercedes. Jill replies and says she'll do for 50,000 it but Jack has to do 50 jumping Jacks before he gets her car. Jill later changes her mind and decides she'll sell it without the 50 jumping Jacks. Do they have a contract? |
No. Jill's counteroffer rejected Jack's original offer and she may no longer accept it without another offer. |
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What is a bilateral contract? |
A contract that includes one party's promise to do something in exchange for another party's promise to do something. |
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What is an unilateral contract? |
A contract where one party promises to do something without requiring the promise of the other party. An unilateral contract is fulfilled when the second party accepts through performance. |
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What indicates acceptance to an offer in a bilateral offer? |
A promise. |
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What indicates acceptance to an offer in an unilateral contract? |
Performance. |
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Mirror Image Rule |
A principle in contract law that requires an acceptance be on precisely the same terms as the offer. |
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Mailbox Rule |
An acceptance is generally effective upon dispatch, meaning the moment it is out of the offeree's control. |
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Silence |
The offeree must say or do something to accept. Silence is not acceptance. |
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Clickwraps |
Clickwrap and Shrinkwrap agreements are generally enforceable. |
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The town of Sanford, Maine, decided to auction off a lot it owned. The town advertised that it would accept bids through the mail, up to a specified date. Arthur and Arline Chevalier mailed in a bid that turned out to be the highest. When the town refused to sell them the lot, they sued. What is the best answer? |
If the auction was with reserve, then the couple loses. It was without reserve, the couple wins. |
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Arturo hires Kate to work in his newsporting goods store. “Look,” heexplains, “I can only pay you $9.00 an hour. But if business is good a year from now, and you’re still here, I’m sureI can pay you a healthy bonus.” Fourmonths later Arturo terminates Kate. Shesues. (a) Katewill win her job back, plus the year’s pay and the bonus. (b) Katewill win the year’s pay and the bonus. (c) Katewill win only the bonus. (d) Katewill win only her job back. (e) Katewill win nothing. |
E. Kate will win nothing. The only thing Arturo obligated himself to dowas to pay $9.00 an hour while Kate worked. He did not promise her a year's employment. The statement about the bonus was tooindefinite to be enforceable: there isno way to measure whether “business is good” or what a “healthy” bonus is.b-co0 |
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Northrop is a huge defensefirm, and Litronic manufactures electronic components such as printed wireboards. Northrop requested Litronic to submit an offer on certain printedboards. Litronic sent its offer form, stating a price and including itspre-printed warranty clause, which limited its liability to 90 days. Northroporally accepted the offer, then sent its own purchase order form, whichcontained a warranty clause holding the seller liable with no time limit. Sixmonths after the goods were delivered Northrop discovered they were defective.Northrop sued, but Litronic claimed it had no liability. Was there a contract?If not, why not? If there was a contract, what were its warranty terms?/body>0 |
The case is governed by UCC §2‑207. Litronic offered to sell at aparticular price, with a specified warranty. Northrop accepted, but provided awarranty with a different time limit. Yes, there is a contract. Pursuant to §2‑207,Northrop intended to accept and create a contract, and the fact that it proposed a different warranty period does not preventformation of a contract. The question then becomes, what is the warrantyperiod? The conflicting warranty terms cancel each other out and will bereplaced by the appropriate Code provision. In this case, the Code provides a“reasonable time” (UCC §2‑309). The court found that six months was within thereasonable time, and Northrop won. NorthropCorp. v. Litronic Industries, 29 F.3d 1173, 1994 U.S. App. LEXIS 17736 (7th Cir.1994). |
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Consolidated Edison Co. ofNew York (Con Ed) sought bids from General Electric Co. (GE) and others tosupply it with two huge transformers. Con Ed required that the bids be heldopen for 90 days. GE submitted a written bid and included a clause holding thebid open for 90 days. During that period, Con Ed accepted GE’s bid, but GErefused to honor it. Is there a contract? |
Yes.GE made a “firm offer,” governed by UCC §2‑205. When a merchant signs a writtenfirm offer, the offer may not be revoked within that period or three months,whichever is less. Here the offer was for three months, so it is irrevocable. Consolidated Edison Co. v. General Electric,555 N.Y.S.2d 355, 1990 N.Y. App. LEXIS 5774 (N.Y. App. Div. 1990). |
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Rebecca, in Honolulu, faxes a job offer to Spike, in Pittsburgh, saying, “We can pay you $55,000 per year, starting June 1.” Spike faxes a reply, saying, “Thank you! I accept your generous offer, though I will also need $3,000 in relocation money. See you June 1. Can’t wait!” On June 1 Spike arrives, to find that his position is filled by Gus. He sues Rebecca. (a) Spike wins $55,000. (b) Spike wins $58,000. (c) Spike wins $3,000. (d) Spike wins restitution. (e) Spike wins nothing. |
(e). Spike wins nothing. Although he used the phrase, “I accept,” he included a counteroffer, which is a rejection of Rebecca's offer. She has no obligation to him.
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