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Bar Contracts > 2) Formation > Flashcards

2) Formation Flashcards

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1
Q

formation of a valid k requires

A

1) offer (un-terminated)
2) acceptance
3) consideration

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2
Q

offer (elements)

A

1) outward manifestation

2) signal that acceptance will conclude the deal

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3
Q

outward manifestation can be

A

oral, written, conduct

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4
Q

outward manifestation EXCEPTION

A

reasonable person would consider much too good to be true –> not an offer

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5
Q

is a joke an offer?

A

yes, if seemingly serious

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6
Q

is an advertisement an offer?

A

no –> invitation for offer (responses could exceed supply)

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7
Q

is an ad an offer EXCEPTION

A

YES an offer if language identifies who gets goods if excess demand (first 10 customers, first come first served)

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8
Q

is a reward an offer?

A

yes

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9
Q

effect of terminating an offer

A

now can’t accept!

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10
Q

ways to terminate an offer:

A

1) lapse
2) death/incapacity
3) revocation by offeror
4) rejection by offeree

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11
Q

lapse (def)

A

too much time passes

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12
Q

how much time before a lapse? (terminates offer)

A

1) time stated in offer or
2) reasonable time
3) face-to-face conversation rule

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13
Q

reasonable time factors (for lapse)

A

1) subject matter / market conditions

2) degree of urgency / means of transmission

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14
Q

face to face conversation rule

A

offer in F2F conversation lapses at end of convo (unless stated otherwise)

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15
Q

death/incapacity (def) (re terminating offer)

A

death/incapacity of either party terminates power of acceptance

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16
Q

revocation (terminates offer): elements

A

1) must be revoked before acceptance AND
2) revocation must be communicated to offeree (indirect ok)
(and, not prevented)

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17
Q

indirect revocation: elements

A

1) offeror takes action inconsistent w intent to go through w the offer AND
2) offeree learns of the action from a reliable source

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18
Q

ways to PREVENT revocation:

A

1) option k (CL only)
2) firm offer (UCC only)
3) reliance/construction (kinda)
4) unilateral k: start performance

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19
Q

option k (as way to prevent revocation): elements

A
  • CL ONLY*
    1) separate promise to keep offer open AND
    2) consideration (or other valid enforcement mechanism)
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20
Q

can offeror revoke if gave specific time to accept?

A

at CL YES unless an option k with separate consideration

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21
Q

reliance/construction (as way to prevent revocation)

A

courts will hold offer open if offeree has detrimentally relied (GC relying on subcontractor’s bid)

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22
Q

firm offer under UCC (as way to prevent revocation): elements

A
  • UCC only*
    1) offer by merchant AND
    2) in writing signed by merchant AND
    3) expressly states will be held open (max 3 mo)
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23
Q

how to prevent revocation: CL vs UCC

A

CL needs option k w consideration,

UCC can have firm offer, w/o consideration

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24
Q

merchant (def)

A

in the business of buying or selling goods

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25
Q

does email/etc count as a signed writing?

A

yes

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26
Q

UCC firm offer – open for how long?

A

1) amount of time it says,
2) reasonable time if dn say
BUT MAX 3 MO no matter what it says

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27
Q

begin performance on unilateral k (as a way to prevent revocation)

A

beginning performance creates option k, now can’t revoke. Must BEGIN performance, not just PREPARATIONS

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28
Q

rejection (terminates offer): ways

A

1) outright rejection
2) counteroffer
3) nonconforming acceptance (CL only)

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29
Q

CL vs UCC: nonconforming acceptance

A

CL: it’s a rejection and counteroffer bc mirror image rule
UCC: it’s an acceptance! (battle of the forms re terms)

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30
Q

effect of a counteroffer

A

rejection of old offer (terminates it) + new offer

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31
Q

counteroffer: exception

A

mere inquiry (“would you consider…”) dn terminate offer

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32
Q

mirror image rule

A

CL only: acceptance must mirror the terms. ANY variation is a counteroffer

33
Q

mirror image rule: effect

A

since any variation is a counteroffer, any variation terminates the first offer

34
Q

unilateral k (def)

A

offer accepted by PERFORMANCE

35
Q

bilateral k (def)

A

offer accepted by PROMISE (exchange of promises)

36
Q

unilateral k: who is bound when?

A

offeree: never
offeror: only when performance by other party is complete

37
Q

bilateral k: who is bound when

A

after promises exchanged, both parties bound

38
Q

Acceptance (CL): elements

A

1) must mirror terms of offer AND

2) must be communicated to offeror (exceptions)

39
Q

acceptance (CL) must be communicated: exceptions

A

1) unilateral k: acceptance effective when performance complete (unless offer SAYS must notify)
2) mailbox rule

40
Q

mailbox rule (CL)

A

acceptance is effective UPON DISPATCH if properly posted

41
Q

mailbox rule: exceptions

A

1) not CL OR
2) the offer specifies otherwise
3) option k

42
Q

mailbox rule: what communications does it apply to?

A

acceptances ONLY. Everything else is effective when RECEIVED

43
Q

mailbox rule w an option k?

A

no! acceptance must arrive by end of option period

44
Q

mailbox rule: what if offeree first rejects, then accepts

A

whichever arrives first is effective – letters race to the offeror (so, no automatic acceptance per the usual mailbox rule)

45
Q

Acceptance (UCC): elements

A

IF buyer offers to purchase goods for prompt or current shipment, then seller can accept by:

1) promise OR CONFIRMATION (nonconforming dx ok)
2) ship conforming goods
3) ship nonconforming goods

46
Q

acceptance by promise (UCC): exception

A

conditional acceptance

47
Q

conditional acceptance (UCC) (def)

A

offeree’s “acceptance” specifically conditioned on offeror first agreeing to additional terms in acceptance. Result: NOT a k, a counteroffer

48
Q

conditional acceptance (UCC) result

A

no k is formed, it’s a counteroffer

49
Q

conditional acceptance (UCC) –> so there’s no k, but what if they ship goods anyway?

A

contract by conduct

50
Q

contract by conduct (UCC) (def)

A

parties’ conduct recognizing the existence of k is sufficient to establish k (even when writings don’t)

51
Q

contract by conduct (UCC): what are the terms?

A

1) terms where parties’ writings agree AND

2) default terms from UCC

52
Q

shipping nonconforming goods (UCC): result

A

yes is acceptance, so yes there’s a k, but in breach

53
Q

shipping nonconforming goods (UCC): exception

A

if seller sends NOTICE OF ACCOMMODATION w the goods, then it’s a counteroffer, not an acceptance/ contract

54
Q

battle of the forms (UCC) (scenario)

A

buyer and seller each had their own boilerplate. But nonconforming acceptance OR CONFIRMATION still = acceptance, still a k. So now, whose terms control?

55
Q

battle of forms (UCC): whose terms control? ADDITIONAL terms

A

if merchants: additional terms become part of the k (exceptions)

if consumer: additional term does not apply unless expressly accepted

56
Q

battle of forms (UCC) ADDITIONAL terms / merchants: exceptions

A

1) offer expressly limits acceptance to its own terms
2) offeror objects to additional terms w/in reasonable time
3) terms would materially alter the k

57
Q

battle of forms (UCC) ADDITIONAL terms: when does a term materially alter the k?

A

1) warranty disclaimer
2) clause that materially shortens dl for raising complaints
3) arbitration clause
4) clauses that change industry practice or past course of dealing

58
Q

battle of forms (UCC): whose terms control? DIFFERENT terms

A

different terms on the same topic knock each other out

59
Q

consideration: general concept

A

no enforceable k unless promise is supported by consideration

60
Q

consideration: majority rule

A

bargain theory

61
Q

bargain theory (def)

A

consideration = bargained-for exchange (promise made to obtain something else of value)

62
Q

consideration: minority rule

A

benefit/detriment test

63
Q

benefit/detriment test (def)

A

need a benefit to promisor and/or detriment to promisee

64
Q

legal detriment (def)

A

promisee is:

1) doing something he had a legal right NOT to do, OR
2) forgoing activity he had a legal right TO DO

65
Q

does the amount of the consideration matter?

A

no! courts don’t police

66
Q

kinds of NOT consideration

A

1) illusory promises
2) gratuitous promises
3) past/moral consideration (usually)

67
Q

illusory promise (def)

A

promise of performance leaves performance to unlimited discretion of promisor (NOT consideration) (“if I feel like it”)

68
Q

gratuitous promise (def)

A

promise to make a gift (NOT consideration)

69
Q

gratuitous promise exception

A

gratuitous transfer: once you’ve already MADE the gift, it’s legally binding

70
Q

past / moral consideration (def)

A

promise in exchange for something already given or done –> NO consideration (dn do it in order to get)

71
Q

no consideration –> how to enforce it anyway?

A

1) past/moral consideration exceptions

2) promissory estoppel

72
Q

past/moral consideration exceptions

A

1) written promise to pay a debt barred by SOL or bankruptcy (only to extent promised ex. 1/2)
2) material benefit test

(both YES enforceable)

73
Q

past/moral consideration exceptions: result

A

these ARE enforceable

74
Q

material benefit test (Def)

A

(minority rule): yes yes enforceable if:

1) promisee conferred a past MATERIAL benefit
2) directly on YOU the promisor

exception to normal rule that past “consideration” is not consideration and not enforceable

75
Q

promissory estoppel (elements)

A

yes enforceable if:

1) promise
2) foreseeable reliance
3) actual reliance
4) injustice w/o enforcement

76
Q

promissory estoppel elements: promise (def)

A

firm commitment (specific enough)

77
Q

promissory estoppel elements: actual reliance

A

the reliance must have been induced by the promise (not something you were going to do anyway)

78
Q

promissory estoppel elements: injustice w/o enforcement: factors

A

1) strength of proof of other 3 reqs
2) blameworthiness or willfulness of breach
3) relative position/equities of parties
4) extent to which reliance detrimental
5) availability of alternatives short of enforcing the promise

Bar Contracts (9 decks)

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