(A)(1) Overview and Mutual Assent Flashcards
When a transaction involves both the sale of goods and the rendering of services, the _________________ test applies to determine which law applies to the entire transaction.
predominant purpose
What is the exception to the predominant purpose test?
divisible contracts - when the payment for goods can be easily separated from the payment for services
How is a contract formed?
A contract is typically created through the process of mutual assent (i.e., offer and acceptance) and consideration, provided no valid defense exists.
What is mutual assent?
For a contract to be formed, there must be a manifestation of of mutual assent to the exchange, which occurs upon acceptance of a valid offer to contract.
How is intent determined in contract law?
Intent is determined by the “objective theory” of contracts and not by the subjective intent or belief of a party.
What is the purpose of the objective theory of contracts?
To determine whether an offer or acceptance is valid
How is a party’s intent to enter into a contract evaluated?
Whether a party intends to enter into a contract is judged by outward objective facts, as interpreted by a reasonable person.
What is the standard of review in determining the intent of a party?
The intent of a party is what a reasonable person in the position of the other party would believe as a result of that party’s objective manifestation of intent.
What is the reasonable person threshold?
When the other party knew or should have known that a party lacked intent to enter—a contract is not formed; Whereas the party’s mere subjective lack of intent is not sufficient to prevent the formation of a contract.
How does the UCC define a valid contract formation?
A contract may be formed “in any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract”
What is an express contract?
When words express the intent of the parties
What is an implied (implied in fact) contract?
when conduct indicates assent or agreement
