Acceptance of Offer

Question 1

Is start of performance acceptance of K offer?

Answer 1

Generally, starting to perform is acceptance, absent notice requirement or other req by offeror.

Question 2

In unilateral Ks, is start of performance acceptance of K?

Answer 2

No, must complete performance to accept unilateral K offer. Not obliged under unilateral K to finish the job.

Question 3

Mailbox rule for K acceptance? What if rejection mailed and not received before acceptance is mailed? Does mailbox rule apply to options?

Answer 3

Generally, acceptance is effective when mailed. If rejection is mailed before acceptance, then first one received wins. Not effective for meeting option deadlines – reqs receipt.

Question 4

Is it acceptance if seller of goods sends wrong goods to person offering to buy?

Answer 4

Yes. I order 100 red widgets; you send 100 blue = K with breach of K by you.

Question 5

Sending wrong goods with explanation = acceptance?

Answer 5

No. I order 100 red widgets, you send 100 blue w/ explanation “Out of red; take these instead” = no K and no breach.

Question 6

Are offers transferable? Are options?

Answer 6

Offers made to particular people are not transferable. Options are transferable unless otherwise stated.

Question 7

How to analyze consideration question

Answer 7

LOOK FOR BARGAINED-FOR LEGAL DETRIMENT.

1. ID the promise breaker
2. Ask whether they asked for something in return for her promise
3. look at person trying to enforce promise and ask what legal detriment they sustained

Question 8

Is it a legal detriment to promise to forego listening to music?

Answer 8

Yes. That counts.

Question 9

Can one promise be consideration for another? Exception?

Answer 9

Yes, a promise can be consideration, EXCEPT an ILLUSORY PROMISE, e.g., “I promise to buy unless I change my mind”

Question 10

Is adequacy of consideration an issue?

Answer 10

No, a peppercorn/acorn would do.

Question 11

Is past consideration going to count as consideration in the present contract? EXCEPTION?

Answer 11

Generally not. If Apu saves Lisa’s life and Homer the next day promises Apu $500, that’s unenforceable b/c no consideration. PROMISE MUST PRECEDE ACTION. The exception is where the action was EXPRESSLY requested by promisor and expectation of payment was there. E.g., same facts w/ freelance lifeguard rather than Apu.

Question 12

Is it consideration to perform your pre-existing legal or K duty? Under common law? EXCEPTION?

Answer 12

Generally not under common law. E.g., lil jon demands $5K at last minute to perform, you agree, he performs –> he only gets original amount b/c no new consideration from him. Exception if there’s addition or change to performance, e.g., Lil Jon changes locations or performs despite inoperative sound system. Third-party promises to pay (e.g., Conviser agrees to pay the extra $5K) are enforceable.

Question 13

Is it consideration to perform your pre-existing legal or K duty? Under UCC Art 2?

Answer 13

New consideration not required to modify sale of goods K. Good faith is the test.

Question 14

When is partial payment consideration for release from a K?

Answer 14

Where the debt is not yet due or is disputed. Where debt is due and undisputed, partial payment cannot relieve you from duty to make full payment.

Question 15

Consideration substitutes are:

Answer 15

1. A written promise to satisfy an obligation for which there is a legal defense (e.g., I agree to pay you 70 cents on dollar after collection of debt barred by statute of limitations)
2. Promissory estoppel (reasonable, foreseeable detrimental reliance; enforcement necessary to avoid injustice)

Question 16

Who lacks capacity to enter K?

Answer 16

1. Infant (under 18)
2. mental incompetents (inability to understand agreement)
3. intoxicated person if counterparty has reason to know of intoxication

Question 17

Consequences if one K party doesn’t have legal capacity?

Answer 17

1. Right to disaffirm K by person w/o capacity
2. Ratification of K if person retains K benefits after gaining capacity (buys car on credit at 17, keeps until 19)
3. Quasi-K says incapacity person must still pay for necessities they used at market rates (equitable remedy, not K law)

Question 18

Statute of frauds reqs

Answer 18

Claimant must have proof of performance or a writing to get in court, not just testimony that a K exists.

Question 19

Four Ks within the statue of frauds

Answer 19

1. Promises to pay debts of another (suretyship) – EXCEPT if the MAIN PURPOSE is to benefit the guarantor, then not even the guarantee is w/in the statute of frauds
2. Service contract not “capable” of being performed & completed within a year from the time of the contract.
3. Transfers of interest in real estate (with exception for leases of year or less).
4. Sale of goods for $500 or more

Question 20

How can statute of frauds be satisfied by performance? For R/E transfer? For services? For goods?

Answer 20

1. For R/E transfer, part performance reqs 2/3 of (i) improvements to land; (ii) payment; & (iii) possession.
2. For services, full performance satisfies statute of frauds, part performance doesn’t.
   3.