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47 Cards in this Set

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How can an offer be accepted?

Unless otherwise unambiguously indicated by K or circumstances....by any reasonable manner.




*special rule when beginning of performance operates as acceptance.




**special rule for an offer to buy goods for prompt or current shipment.

Can beginning of performance operate as acceptance? If so, how?

Yes, but only if followed by notice to offeror within a reasonable time ....




otherwise, offeror may treat offer as having lapsed before acceptance

How can an offer for prompt or current shipment be accepted?

(1) prompt promise to ship; OR




(2) prompt or current shipment of conforming or nonconforming goods.




*BUT shipment of nonconforming goods NOT acceptance IF seller seasonably notifies buyer that shipment offered only as accomodation

What happens if the acceptance contains terms different from the offer?

May or may not be included--there is a split of authority:




(1) knock-out rule (majority): conflicting terms cancel out




(2) other courts treat same as additional terms

What is required to make a K if there are missing terms?

As long as there is a quantity term, missing terms do not prevent formation of K if it appears:




(1) parties intended to make a contract; AND




(2) there is a reasonably certain basis for giving a remedy.

Price Gap Filler

The price will be a reasonable price at the time of delivery if:




(1) Nothing is said as to price;




(2) The price is left to be agreed to by the parties and they fail to agree; OR




(3) The price is to be fixed by some external factor or third party and it is not so set.






EXCEPT if parties intended not to be bound unless price fixed or agreed, then no K if not so fixed or agreed.

What is required if the K says price is to be fixed by one party?

Must do so in good faith




otherwise, other party may (1) cancel K or (2) fix reasonable price himself

What is required with respect to the quantity term for K to be enforceable?

Must be stated in K and must be certain or cable of being made certain

Requirements and outputs Ks---two limitations re: quantity

(1) Must be the actual, good faith output or requirements of the party; AND.




(2) Must NOT be unreasonably disproportionate to:




(A) any stated estimate; OR




(B) if no stated estimate, any normal or otherwise comparable prior output or requirements.



Firm Offer Rule

A promise to keep an offer open is enforceable, even if no consideration has been paid to keep the offer open, IF:




(1) A merchant




(2) Offers to buy or sell goods in a signed writing; AND




(3) The writing gives assurance that it will be held open.

For how long is a merchant's firm offer irrevocable?

(1) During the time stated; OR




(2) For a reasonable time if no time stated.




***BUT duration no more than 3 months (unless consideration given)

What if the term of assurance (re: firm offer) is included on a form supplied by the offeree?

That specific term must be separately signed by the offeror.

How can an offer be accepted?

Any reasonable manner.

How can an order or offer for prompt or current shipment be accepted?

(1) by prompt promise to ship; OR




(2) by prompt or current shipment of conforming OR nonconforming goods

Does a seller automatically breach by shipping nonconforming goods in response to an offer for prompt or current shipment?

Yes, UNLESS seller seasonably notifies buyer that it is offered only as an accomodation

Does beginning of performance constitute acceptance?

If reasonable, yes.




BUT not effective until offeree gives notice of acceptance within a reasonable time.

If offeree responds to offer with form that purports to be an acceptance but also includes additional or different terms, is that an acceptance?

Yes, unless acceptance is expressly made conditional on assent to the original terms of the offer.

In a battle of the forms case, are the additional or different terms included in the K?

(1) If any party is a nonmerchant, the additional/different terms are considered mere proposals to modify and DO NOT become part of K unless other party expressly agrees.




(2) Between merchants:




(a) the additional terms are usually included;




(b) split of authority re: different terms, but majority says no (knock-out rule).





in battle of forms case, between merchants, when are additional terms not included in K?

(1) they materially alter the original terms;




(2) the offer expressly limits acceptance to the terms of the offer; OR




(3) the offeror has already objected to the particular terms, OR objects within a reasonable time after receiving notice of them.

If the parties behave as if there's a K, but their writings do not otherwise establish a K, (1) is there a K and (2) if so, how are the terms determined?

(1) Conduct by both parties which recognizes the existence of K = sufficient to establish K although writings do not otherwise.




(2) In such a case, terms of K = terms on which parties' writings agree, plus UCC gap fillers.

When does a K come within the SOF

If K = $500 or more

SOF Requirements---mnemonic

SQS

SOF Requirements---SQS?

S--Sufficient writing.




Q--Quantity provided




S--Signed by party to be charged

If K falls within SOF, what requirements must it meet to be enforceable?

(1) some writing sufficient to indicate that a contract for sale has been made between the parties;




(2) signed by the party against whom enforcement is sought or by his authorized agent or broke; AND




(3) A writing is not insufficient because it omits or incorrectly states a term agreed upon but the contract is not enforceable under this paragraph beyond the quantity of goods shown in such writing.

SOF---Exceptions Mnemonic

SWAP

SOF----SWAP (exceptions)

S--Specially manufactured goods




W---Written merchant's confirmation




A---Admissions in pleadings or court




P---Part Performance

SOF---Specially manufactured goods exception

(1) goods are to be specially manufactured for buyer




(2) and are not suitable for sale to others in ordinary course of seller's business; and




(3) seller, before notice of repudiation received and under circumstances which reasonably indicate goods are for buyer, has made either substantial beginning of their manufacture or commitments for their procurement.

What constitutes a "sufficient writing" for SOF purposes?

There must be some writing sufficient to evidence a contract.




***Need not contain all material terms and stated terms need not be precise.

SOF---Written merchant's confirmation exception

(1)Between merchants,




(2) a signed,




(3) written confirmation,




(4) sent within a reasonable time,




(5) is enforceable against the recipient




UNLESS written notice of objection to its contents is given within 10 days

SOF--Admission Exception

K enforceable IF:




(1) party to be charged




(2) admits in pleading, testimony, or otherwise in court that K was made.




BUT K not enforceable beyond quantity admitted

SOF---Part Performance Exception

K enforceable re: goods:




(1 )for which payment has been made and accepted OR




(2) which have been received and accepted.




BUT part performance only validates K for goods which have been accepted or paid for—i.e., only enforceable to that extent.

Unconscionability----Elements

(1) procedural and (2) substantive

Substantive unconscionability

grossly unfair and one-sided terms

Procedural unconscionability

problems that taint the bargaining process




*majority = adhesion K (take-it-or-leave it);




**minority = something more

Do courts require both procedural and substantive unconscionability?

some do...others focus mostly on substantive

How is unconscionability determined?

By the court, as a matter of law, and at the time of the contracting.

Gap Filler--Obligation of Good Faith

Every K or duty imposes an obligation of good faith in its enforcement and performance







When does obligation of good faith arise?

Not until there is an underlying K, so not to pre-K negotiations

good faith elements

(1) honesty in fact; AND




(2) commercial reasonableness



good faith---honesty in fact

subjective standard

good faith----commercial reasonableness

objective standard----fair dealing

What is required to modify a K?

no consideration needed, but must be in good faith

what is a breach of good faith in K modification?

extortion of modification without legitimate commercial reason is bad faith and not enforceable

do modified Ks have to meet the SOF?

Yes if within the SOF as modified

are no-modification clauses effective?

yes, but if any party is a nonmerchant, the clause must be separately signed

what if attempted modification fails (either because of SOF or no-modification clause)?

might can operate as a waiver




***UNLESS retracted

Can a waiver (failed modification) be retracted? If so, how?

Yes. By reasonable notification that strict compliance of waiver terms is required.




UNLESS it would be unjust b/c other party materially and detrimentally relied.