Contract Law

Front 1

Contract Formation
What Law Applies?

Back 1

The Common Law applies to the sales of real property, services or intellectual property.

Front 2

Does the U.C.C. apply?

Back 2

The U.C.C. applies to all contracts for the sale of goods.

Front 3

GOODS

Back 3

Goods are moveable, tangible property, identifiable at the time contracting.

Front 4

MERCHANTS?

Back 4

A merchant is a person who regularly deals in goods of this kind or who, by his occupation, has some special skill or knowledge as to these goods.

Front 5

VALID CONTRACT

Back 5

A valid, enforceable contract consists of an offer, acceptance, consideration and lack of formation defenses.

Front 6

OFFER

Back 6

An offer is the manifestation of present contractual intent, communicated to an identified offeree, containing definite and certain terms.

Front 7

REVOCATION OF OFFER

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A revocation occurs when the offeror communicates to the offeree that the offeror no longer wishes to be bound to the terms of the offer.

Front 8

INDIRECT REVOCATION

Back 8

An indirect revocation occurs if the offeree receives correct information from a reliable source that the offeror no longer wants to be bound to the offer.

Front 9

REJECTION

Back 9

A rejection occurs when the offeree communicates to the offeror that the offeree is rejecting the offer.

Front 10

IRREVOCABLE OFFERS

Back 10

Option Contract,
Merchant's Firm Offer,
Unilateral Contract,
Detrimental Reliance,

Front 11

OPTION CONTRACT

Back 11

An option contract is irrevocable if supported by consideration

Front 12

MERCHANT'S FIRM OFFER

Back 12

A merchant's firm offer occurs when there is a writing signed by a merchant that gives assurance that the offer will be held open. It is irrevocable for the time stated but never to exceed 3 months.

Front 13

UNILATERAL CONTRACT

Back 13

A unilateral contract is irrevocable for a reasonable time once performance has begun.

Front 14

ACCEPTANCE WITH ADDITIONAL (DIFFERENT) TERMS (U.C.C. 2-207)

Back 14

Under the U.C.C., an acceptance that adds new terms to the offer is a valid acceptance.
U.C.C provides that a sales contract can be formed in any manner sufficient to show an agreement.
Between merchants, the additional terms become part of the contract unless they materially alter the contract, unless the offeror objects or unless the offer is limited to its terms.
Non-merchants, then the additional terms become mere proposals for new terms and must be expressly accepted.

Front 15

MATERIAL TERM

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Material term is any term that substantially affects the economic risks or benefits, or in any way limits the usual remedies for breach or works a hardship or surprise.

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MAILBOX RULE

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An acceptance is effective on dispatch. An offer or rejection is effective on receipt.

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In a POST-ACCEPTANCE REJECTION

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If the rejection is received first the mailbox rule applies and there is a contract unless the offeror changes his position based on the rejection, then there is no contract.

Front 18

In a POST-REJECTION ACCEPTANCE

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The mailbox rule does not apply. Whichever the offeror gets first applies.