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71 Cards in this Set

  • Front
  • Back

The mirror image rule requires __________.

An absolute and unequivocal acceptance of each and every term of the offer
If a seller accepts a buyer’s offer to purchase goods without an exact price term included, the price will be ______.
a reasonable price at the time of delivery

incorrect to say: the fair market price at the time the contract was formed
Under Article 2, when a merchant responds to an offer to buy goods by simply shipping similar, but nonconforming, goods, that shipment is considered __________.
an acceptance and a breach of the contract
Generally, whether a communication is deemed an offer depends upon __________.
the objective or apparent intention of the offeror to make an offer
the necessary elements for a merchant’s firm offer?
• a merchant offers to sell goods,
• in a signed writing, and
• that writing gives assurances that the offer will be held open
A letter of revocation of an offer becomes effective at the moment it is __________.
received by the offeree
Traditional contract law insisted on an absolute and unequivocal acceptance of each and every term of the offer.
This concept is commonly referred to as:
the Mirror Image Rule
in a unilateral contract, when can an offeror properly revoke an offer?
anytime before offeree has begun performance
Article 2 has abandoned the __________, in favor of the __________.
Mirror Image Rule; Battle of the Forms Provision
To be valid, an offer for the sale of goods must include __________.
a quantity term
A valid offer for a real estate contract must include:
the identity of the land and a price
Under the Article 2 Battle of the Forms Provision, whether additional or different terms proposed by the offeree during acceptance ultimately become part of a contract depends on whether or not __________.
Both parties are merchants
A communication will not be considered to be definite and certain enough to be an offer if it is for the sale of goods and __________.
missing a QUANTITY term
When can an offeror properly revoke an offer for a unilateral contract?
anytime before the offeree has begun performance
a mutual mistake as to a basic assumption on which the contract is made will always render the contract ______.
When two merchants enter into an oral contract for the sale of goods and one party sends to the other party a signed, written confirmation of the agreement, it:
Binds both the sender and recipient, provided the recipient had reason to know of its contents and did not object in writing within 10 days of receipt
The confirmatory memo rule applies __________.
only if both parties are merchants
In a contract for a sale of goods priced at $500 or more, if the goods are _________ or __________, the contract will be enforced even if there is no writing.
Received and accepted; paid for
A contract entered into between an infant and an adult is __________.
voidable by the infant but binding on the adult
In an auction __________, the auctioneer may withdraw the goods at any time until he announces completion of the sale.
with reserve

*an auction w/out reserve, auctioned may not withdraw the goods at any time.
What is an option contract?
A contract in which the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer.

*general rule: offers can be revoked at will by the offeror, even if he has promised not to revoke for a certain period. An option contract is an exception to this general rule, which limits the offeror’s power to terminate the offer.
What is an offer to for a bilateral contract?
An offer where the offeree has the option to accept by a promise or by the start of performance.

*Under UCC and R2d of Contracts, all offers are deemed bilateral contracts unless clearly indicated otherwise.
merchant’s firm offer requires a __ assurance __ by the merchant-offeror.
written, signed

*only the offeror must be a merchant, not both parties.
Merchants Firm-Offer:

If no specific time frame is stated in the offer, a merchant’s firm offer will remain open for a reasonable time (but in no event may such period exceed __ __).
three months
At common law, a written communication revoking an offer is considered “received” by an offeree at the moment:
the revocation comes into the offeree's physical possession.

*NOT when dispatched, NOT when read
When an offeree gives consideration for a promise by the offeror not to revoke an outstanding offer, this is known as __________.
option contract
Under the Article 2 Battle of the Forms Provision, whether additional or different terms proposed by the offeree during acceptance ultimately become part of a contract depends on whether or not __________.
both parties are merchants
If it reasonably appears that the parties intended to make a valid contract, a court may apply the presumption that the parties’ intent was to include a reasonable term to rectify any __________ term.
To be valid, an offer for the sale of goods must include _____ term.
Full performance is necessary to properly accept an offer for a(n) __________ contract.
An offer is terminated by the death of the offeror unless:
offeree has paid consideration to keep the offer open
For a real estate contract, a ____ term is necessary; for a valid offer for a contract for the sale of goods, a ____ term is necessary.
price; quantity

*A valid offer for a real estate contract must include a property description identifying land with some particularity
In a SHIPMENT contract, when goods are destroyed en route from the Seller to the Buyer, the risk of loss is borne by:
the buyer

-b/c ROL passed to buyer when the goods were delivered to the carrier
Under Article 2, the warranty of merchantability can be specifically disclaimed or modified only by mentioning the word ___.

*However, unless the circumstances indicate otherwise, an implied warranty of merchantability can be disclaimed by expressions, such as “as is,” “with all faults,” or other expressions that call the buyer’s attention to the fact that there are no implied warranties.
A written, conspicuous disclaimer of the warranty of merchantability is necessary only if the sales contract is in __.
Which warranty will be implied in a contract for the sale of goods whenever any seller has reason to know the particular purpose for which the goods are to be used and that the buyer is relying on the seller’s skill and judgment to select suitable goods; and the buyer in fact relied on the seller’s skill and judgment?
implied warranty of fitness for a particular purpose

*NO req't that seller be a merchant or a merchant who deals in goods of that kind. Nor is it req'd that buyer be a non-merchant
Seller sells goods to Buyer on Friday. Buyer and Seller agree that Buyer will pick up the goods from Seller at 1 p.m. on Monday. The goods are ready for Buyer at 12:30 p.m. on Monday. At 2 p.m., before Buyer has arrived to retrieve the goods, the goods are destroyed.

The risk of loss is on __________.
buyer if seller is NOT a merchant
Under Article 2, if goods are so defective that the buyer has a right to reject them the __________.
risk of loss does not pass to the buyer until the defects are cured or the buyer accepts the goods despite the defects
The implied warranty of merchantability is Implied in every contract for the sale of goods by a merchant who:
deals in goods of the kind sold
General disclaimers of implied warranties may include:
•Examination of the goods,
•refusal to examine the goods, and •course of dealing
In a contract in which the seller is in Michigan and the buyer is in Texas, the following terms "F.O.B. the buyer's place of business" is creates a _____ contract.

F.O.B. the buyer’s place of business = Destination Contract
An F.O.B. buyer’s place of business is a destination contract, so the ___ has the risk of loss until the goods reach the buyer’s place of business.
All C.I.F. contracts are ___ contracts.
F.O.B. the seller’s location is a ____ contract, so the ___ bears the risk of loss while goods are in transit.
shipment; buyer
Any affirmation of fact or promise made by the seller to the buyer, any description of the goods, and any sample or model creates an _____ warranty if the statement, description, sample, or model is part of the basis of the bargain.

*but a statement of opinion relating to the value of the goods does NOT create an express warranty.
Is consideration necessary for a valid mutual rescission of a contract?
Consideration is necessary for a valid mutual rescission of a contract, and each party giving up her right to counterperformance from the other party serves as consideration for the agreement to rescind the contract.
-There is no need for additional valuable consideration beyond that for the rescission to be effective.
if the subject matter of the contract has become illegal due to a subsequently enacted law or other governmental act, performance will be ____.

*this is called a supervening illegality
A contractor is hired to remodel a restaurant. After the contractor completes 90% of the work, the restaurant is destroyed in an earthquake.

-The destruction of the restaurant will:
discharge the contractor’s duty to perform.

*as long as the destruction of the subject matter was NOT the FAULT of either party
in a contract to construct a building, destruction of the building in progress will not discharge the duty to perform because performance is NOT _____ (the building can still be built).

*date of performance will likely be extended
Where the nonoccurrence of the event was a basic assumption of the parties in making the contract and neither party has expressly or impliedly assumed the risk of the event occurring, contractual duties may be ____.
When is performance discharged by IMPRACTICABILITY?
when performance is possible, but can be accomplished only with extreme and unreasonable difficulty or expense.
Owner enters into a contract with Builder under which Builder agrees to renovate Owner’s 100-year-old mansion for $400,000. When the renovation is 80% complete, the mansion is washed away in a flood.

(i) Builder’s duties under the contract will be discharged by:

(ii) Owner's duties under the contract will be discharged by:
(i) impossibility

(ii) impossibility OR frustration of purpose
i.e., the contract to renovate his mansion became valueless.
A remedy whereby a writing setting forth the agreement between the parties is changed by the court so that it conforms to the original intent of the parties is known as:
For a liquidated damages clause to be valid:
•damages for contractual breach must have been difficult to estimate or ascertain at the time the contract was formed, and
•the amount agreed on must have been a reasonable forecast of compensatory damages in the case of breach.

*if liquidated damages clause is valid--can get liquidated damages even though no actual money (or pecuniary) damages have been suffered.
“Benefit of the bargain” damages is another name for ___ damages.

-i.e., those damages sufficient for the plaintiff to buy a substitute performance.
____ damages put the plaintiff in the position she would have been in had the contract never been formed.
____ damages consist of losses resulting from the breach that any reasonable person would have foreseen would occur from a breach at the time of entry into the contract.
___ damages may be granted in an action for breach of contract for the sale of goods for expenses reasonably incurred by the buyer in inspection, receipt, transportation, care, and custody of goods rightfully rejected, and other expenses reasonably incident to the seller’s breach, and by the seller in storing, shipping, returning, and reselling the goods as a result of the buyer’s breach.

•In a sale of goods contract, only the buyer may recover consequential damages
To recover full damages when an employer breaches an employment contract, the employee:
Must make a reasonable effort to find a new position of the same kind in the same locale.

*a nonbreaching party cannot recover avoidable damages.
In a construction contract, if the property owner breaches the contract after construction has started but before it is completed, the builder is entitled to:
The profits he would have derived from the contract, plus any costs he has incurred.
-(aka, contract price minus cost of completion)
A buyer’s right to recover undelivered, identified goods from a seller under certain circumstances is called ____.
If an assignee for value discovers that the assignor had previously assigned the same contract rights to another party, the assignee may sue the assignor for breach of warranty. Why?
The assignor makes several implied warranties to the assignee, the breach of which gives rise to a cause of action. One of those warranties is the warranty that the assignor has the right to assign, which means he has made no prior assignment of that right.
Does the Mail Box Rule Apply?

K states that the offer expires on July 1, if acceptance is not received by the offeror on or before that date?

The offer specifically says acceptance not effective until received. Thus the offeror opted out of the mailbox rule.

•the defense of "Unilateral Mistake" will allow the mistaken party to avoid the contract if:
the nonmistaken party knew or should have known of the mistake.

-(the K is voidable)

note: the parties could reform the contract so long as the reform is put in WRITING. Which would remove the voidable issue.

*The general rule is that Unilateral Mistakes will not allow the mistaken party to avoid the contract.
Where one party is a merchant and the other is a nonmerchant and the acceptance contains additional terms, the contract will only include the terms of the offer. Any additional terms will be ___ unless specifically accepted.

*UCC Battle of the Forms rule says the acceptance is VALID even if it contains additional terms.
Does the Mail Box Rule Apply?

Offeree paid consideration to off error to hold the offer open for 30 days?

*mailbox rule does NOT apply to "option contracts."
-under an option contract, acceptance is only upon RECEIPT.
• to be an intended third-party beneficiary, the third party must be an intended beneficiary at the TIME the contract was MADE.

•an Assignment on the other hand is a contract that does NOT contemplate performance to a third party at the time the contract was made.
•Intended 3PB = designated at time contract is made.

•Assignee = created after the original contract was made.
in a performance contract with a condition precedent to payment under the contract, the obligor is relieved of his duty to perform if the condition is not met.
obligor is excused of performance if condition precedent not met.

*equity rules may apply however
What kind of contract is this?

-customer walks into a barbershop and sits down into a barbers chair and receives a haircut from the barber w/out saying award.
Implied-in-fact Contract

*circumstances imply the customer will pay.
a court will NOT grant specific performance if the subject matter of the contract has been transferred to:
a bona fide purchaser for value
What is an "executory contract"?
• a K where all or part of the performance has yet fully performed--not yet fully "executed."

-even if one party has fully performed, but not the other party is classified as executory contract.