BLL Ks Flashcards
K = _________
MA (O & A) + C - D
define offer
a communication that creates a reasonable expectation in the offeree that the offeror is willing to enter into a K
are advertisements offers?
no, they are mere invitations for offers
what must real estate offers contain?
ID of the land and price terms
what must offers for a sale of goods contain?
quantity being offered (if not requirements of output contract)
when is it not okay for a term to be decided at a later time?
if the term is a material term
when may the offeree terminate an offer?
- lapse of time w/o acceptance
-time stated in offer or a reasonable time
in what ways may an offer be rejected by the offeree?
- express rejection
- counteroffer as rejection
- conditional acceptance as rejection
- rejection of option
What is an express rejection?
statement by the offeree that they do not intend to accept the offer
what is a rejection by counteroffer?
offer made by the offeree to the offeror that contains the same subject matter as the original offer, but differs in its terms
COUNTEROFFERS KILL
What is acceptance by conditional rejection?
when an acceptance is made expressly conditional on the acceptance of new terms
CONDITIONAL ACCEPTANCES ARE KILLERS
When is a rejection effective?
When received by the offeror
does a rejection or counteroffer to an option to keep an offer open constitute termination of the original offer?
no unless offeror has detrimentally relied on the offeree’s rejection
when may an offer be revoked by the offeror?
direct revocation - communicating it to offeree
indirect revocation - if offeree receives (1) correct info, (2) from a reliable source, (3) of acts of the offeror that would indicate to a reasonable person that the offeror no longer wishes to make the offer
when is a revocation effective?
when received by offeree
what is an option to hold open?
offeree gives consideration for a promise by the offeror not to revoke an offer for a set amount fo time
what is the merchant’s firm offer rule?
- merchant
- offers to buy or sell goods in a signed writing &
- the writing gives assurances that it will be held open
=
offer not revocable during time stated or reasonable time (not to exceed 3 months) despite no consideration
when is an offer irrevocable bc of detrimental reliance?
when the offeror could reasonably expect that the offeree would rely to their detriment on the offer and offeree does detrimentally rely on the offer = will be held open as an option K for reasonable amount of time
when does an offer in a unilateral K become irrevocable?
Upon beginning performance
What will terminate an offer by operation of law?
- death or insanity of either party (unless irrevocable)
- destruction of K’s subject matter
- supervening illegality
how may a bilateral K be accepted?
a promise to perform or by beginning performance
how can one accept an offer to buy goods for current or prompt shipment?
by a promise to ship or by current or prompt shipment of the goods
what is the mirror image rule and when does it apply?
it applies only in common law Ks. the rule states that if an acceptance has any difference or additional terms, it is a rejection and counteroffer
when is a unilateral K accepted?
only when performance is completed
in a unilateral K, is an offeree bound to complete performance once beginning it?
No
What happens when a shipment of nonconforming goods is sent?
acceptance & breach unless seller notifies buyer of nonconforming goods being offered only as an accomodation
does a buyer have to accept nonconforming goods?
no, may reject
does the mirror image rule apply to Article 2 Ks?
No - a different acceptance is an acceptance unless the acceptance is made expressly conditional on agreement to the additional or diff. terms
What happens under battle of the forms in Art. 2 Ks when any party is a non-merchant?
diff or additional terms are proposals to modify and do not become part of K unless offeror expressly agrees to them
What happens with additional terms under battle of the forms in Art. 2 Ks when both parties are merchants?
additional terms included unless:
1. materially alter original terms of offer
2. offer expressly limits acceptance to original terms
3. offeror has already objected to new terms or rejects within a reasonable time
What happens with different terms under battle of the forms in Art. 2 Ks when both parties are merchants?
knockout rule = different terms are knocked out of K and UCC gap fillers are included instead
when is acceptance effective?
mailbox rule = effective upon dispatch
UNLESS:
1. offer stipulates not effective until received
2. option K is involved (only effective upon receipt)
3. offeree sends rejection first then sends acceptance (whichever arrives first is effective)
4. offeree sends acceptance first then rejection (effective unless rejection received first and offeror detrimentally relies on it)
what are the elements of consideration?
- bargained for exchange
- legal value
when is an act or forbearance sufficient consideration?
when it benefits the promisor (person making the promise)
is past consideraton sufficient?
no
what is the preexisting legal duty rule?
performing or a promise to perform a preexisting legal duty is not sufficient consideration UNLESS:
1. new or diff consideration
2. ratify a voidable K
3. preexisting duty owed to 3d not promisor
4. honest dispute as to duty
is new consideration required for a modification to an Art 2 K?
no - only good faith
is new consideration required for a modification to a CL K?
yes
what is an illusory K?
a K where only one party is bound to perform - not enforceable
what is the concept of promissory estoppel?
makes a K enforceable without consideration if
1. the promisor should reasonably expect to induce action or forbearance AND
2. such action or forbearance is induced
what are reliance damages?
whatever the promisee spent in reliance on the promise
what is a quasi-K?
not a K at all, treated as such by a court to prevent unjust enrichment
what are restitution damages?
awarded to prevent unjust enrichment (usually when there is no K)
what is the measure for restitution damages?
value of the benefit conferred
what is a K condition?
provides that a party does not have to perform unless some condition is fulfilled
what is a condition precedent?
one that must occur before an absolute duty of immediate performance arises
what is a condition subsequent?
one that when it occurs cuts off an already existing duty to perform
what is anticipatory repudiation?
a promisor prior to the time set for performance unequivocally indicates that they won’t perform when the time comes
what are the nonrepudiation party’s options when the other party anticipatorily repudiates?
- treat as total repudiation and sue immediately
- suspend performance and wait to sue until performance date
- treat as offer to rescind and treat K as discharged
- ignore and urge promisor to perform
what are the reqs for a K to be divisible?
- performance of each party is divided into two or more parts
- number of parts due from each party is the same
- performance of each part by one party is agreed on as equivalent of the corresponding part
may a condition be excused by substantial performance?
yes, if it was an implied condition and only if the breach was MINOR in a CL K
what is rescission?
mutual cancellation of K
will a modification discharge an entire K?
no, only the parts subject to mod
will an act such as the destruction of a written K constitute discharge?
no, unless parties manifest their assent that the act is to do so
what is a substitute K?
new K entered into by same parties that immediately revokes prior K
what is accord and satisfaction?
accord - agreement where one party agrees to accept other, different future performance than what is promised to them in the original K
satisfaction - performance of the accord agreement
must have both for discharge of K
what is a release?
party agrees to release other party to K from performance, K is discharged
what is a novation?
occurs when a new K substitutes a new party (just 1!) to receive the benefits and assume the duties that the original party had under the terms of original K
what are the reqs for a valid novation?
- previous valid K
- agreement among all parties to new K
- immediate extinguishment of K duties between original K parties
- valid and enforceable new K
what is impossibility?
nonoccurrence of the event was a basic assumption of the parties in making the K, something arises that causes the K impossible to be fully performed
is a contractor’s duty to perform discharged if the work in progress is destructed?
no
what is the test for impracticability?
- extreme and unreasonable difficulty/expense &
- its nonoccurrence was a basic assumption of the parties
what are the req’d elements for a K to be discharged because of frustration of purpose?
supervening act
at time of entering K, parties did not reasonably foresee act or event occurring
purpose of K completely destroyed
purpose of K realized by both parties at time of making K
what is the effect of a minor breach?
aggrieved party must still perform under K
what is a minor breach?
when an obligor gains the substantial benefit of their bargain despite the obligor’s defective performance
what is a material breach?
obligor does not receive the substantial benefit of the bargain
what is the effect of a material breach?
aggrieved party is relieved of duty to perform
what is the perfect tender rule and what Ks does it apply to?
only applies to Art 2 Ks
goods and delivery must conform to the contract 100%
if not - buyer may:
-reject all
-accept all
-accept any commercial units and reject the rest
what is a seller’s right to cure?
if not in conformance with perfect tender rule, seller has chance to cure by giving buyer reasonable notice and making tender of conforming goods within original K time frame
what is the obligation of good faith under UCC Ks?
honesty in fact and observance of reasonable commercial standards in performance and enforcement of K
what is the obligation of good faith and fair dealing under CL Ks?
involves exercising discretion in a way that does not deprive the other party of the fruits of the K
what is an express warranty in a sale of goods K?
any affirmation of fact or promise made by the seller to the buyer if it is part of the basis of the bargain
what are implied warranties in Ks for the sale of goods?
must be a K for sale of goods by a merchant who deals in goods of the kind sold
implied warranty of merchantability that goods are fit for the ordinary purpose for which such goods are used
what is the implied warranty of fitness for a particular purpose in Art 2 Ks?
- buyer w/ special purpose
- seller knows of specific purpose
- seller picks out goods for special purpose
- buyer relies on seller’s skill or judgment in picking out goods
who carries the risk of loss in a noncarrier case?
if seller merchant - RoL passes to buyer upon receiving physical possession of goods
if seller non-merchant - RoL passes to buyer upon tender of delivery
who carries the risk of loss in a carrier case?
-shipment K - RoL passes to B upon delivery to the carrier
-destination K - RoL passes to B when goods are tendered to B at destination
when does the Risk of loss pass to buyer in a FOB K?
at named location
(ex FOB Houston)
when does RoL pass to buyer in FAS K?
once goods are delivered to dock
usually only used in Ks where goods are shipped via boat
how to determine if a K is a shipment or destination K?
FOB term
FOB (seller city) = shipment
FOB (anywhere but seller city) = destination
