Considewation and Fowmation

Question 1

Questions to ask for considewation?

Answer 1

1) Who is the promisee who wants to enforce a promise?
2) What is the promise they want to enforce?
3) Did the promisee give something?
4) If so, was it a “bargained-for exchange? That is, did the promisee give them something in exchange for the promise they want to enforce and did the promisor agree to take that something in exchange for that promise?

Question 2

What is the pre-existing duty rule?

Answer 2

where a party does what is already legally obligated to do, there is no consideration as there is no detriment.

Question 3

When is a contract illusory?

Answer 3

A contract is illusory when a party retains the ultimate power to unilaterally change the terms of a contract. (Flemma v. Halliburton Energy Services)

Question 4

When is there no consideration in a contract?

Answer 4

1) When there is a pre-existing legal duty to do what a party is promising to do in a contract.
2) When the contract is illusory.
3) When the party’s performance is not contemplated by the other party as a part of the deal.

Question 5

What is mutual inducement?

Answer 5

The contract was initiated by the interest of both parties interest in getting the performance or item from the other party.

Question 6

What is the universal reasonable person test?

Answer 6

Considering the Relevant Evidence: Just the words being interpreted

Question 7

What is the socially situated reasonable person test?

Answer 7

Considering the relevant evidence: plus the circumstances surrounding the communication.
Example: the embry case.

Question 8

What is the socially Identifying reasonable person test?

Answer 8

Consider the relevant evidence; Words surrounding the circumstances plus the social identity of the person hearing the words.
Example: Steelworkers case

Question 9

What are the elements of a misunderstanding?

Answer 9

1) Parties attach materially different meanings
2) Each understanding is reasonable; and
3) Neither party knows or has reason to know the other’s meaning or both parties know or have reason to know meaning.

Question 10

What is the definition of an offer?

Answer 10

the definition of an offer is the willingness to enter a bargain, so made to justify [a reasonable person in the position of the other party ] in understanding that their assent to that bargain is invited and will include it.

Question 11

What is the reasonable person test under the offer requirement?

Answer 11

When a court takes in the surrounding circumstances to see if a reasonable person would believe there is an offer present given the context. (J.W. Southworth v. Joseph C. Oliver)
Factors include: Was the offer made to a specific person or indefinite group? What words were used in the communications? Were there detailed terms? Were there past conversations regarding this transaction?

Question 12

What is an acceptance?

Answer 12

Acceptance is the offeree’s manifestation of willingness to enter into the exchange that the offeror offered. There can be no acceptance unless there is first an offer.

Question 13

What is the mirror image rule?

Answer 13

the idea that the offeree has to agree to the exact same terms proposed in the offer; that is what it means to “agree” or to accept an offer.

Question 14

What is the purpose of the mirror image rule?

Answer 14

The purpose of the mirror image rule is to prevent an offeree from enforcing a contract that the offeror never intended to make.

Question 15

What is a bilateral contract?

Answer 15

A contract that is made up of promises from both parties.

Question 16

What are the three variations of objective tests?

Answer 16

1) Positioned reasonable person: Relevant Evidence: the words plus all circumstances surrounding communication.
2) Universal reasonable position: the words and circumstances
3) Socially situated reasonable person: relevant evidence: words, surrounding circumstances, plus the social identity of the person hearing the words.

Question 17

What is the subjective test versus the objective test?

Answer 17

Subjective Test: taking into account the transaction at hand.

Objective Test: taking into account what the reasonable person would do amongst other factors depending upon the variation.

Question 18

Danpig placed an ad advertising her textbook to be sold on a first come first serve basis tomorrow at 10 am? Is this an offer?

Answer 18

This is an offer because it is a first come first serve and is a unilateral contract.

Question 19

Jeanie says to Lindsay, I’m thinking of selling _______. Do you think that $________ is fair? Is this an offer?

Answer 19

No this is not an offer. It is uncertain if there is intention by Jeanie to presently sell the item.

Question 20

Kaylee, a lawyer says to Prof. Hill, a customer: “That casebook you are holding is yours if you promise to me $40 for it?” Is this an offer?

Answer 20

Yes, this is because we know who the item is being sold to and the terms stated show that Kaylee would make the transaction if there was performance.

Question 21

What test did the court use in J.W. Southworth v. Joseph C. Oliver and Arlene G. Oliver?

Answer 21

1) Positioned reasonable person: Relevant Evidence: the words plus all circumstances surrounding communication.

Question 22

what are the elements for an offer?

Answer 22

1) manifestation of present intent to enter bargain;
2) certain and definite terms;
3) communicated to an identified party to; and
4) The offeree reasonably understands the contract results from the acceptance

Question 23

These are typically not offers!

Answer 23

Advertisements to the general public, except those offering rewards
Price quotes
Catalogs
Price lists
Price tags

Question 24

These are offers:

Answer 24

offer of reward
Prove me wrong offers
Prize for skill and luck

Question 25

What does the UCC apply to?

Answer 25

Only goods; not services or property

Question 26

Lindsay and Jeanie are friends and co-workers. Lindsay tells Jeanie “I’ll scratch your back if you scratch mine.” Lindsay agrees and tries to start scratching Jeanie’s back. Jeanie refuses to perform. Lindsay sues for breach of contract but Jeanie argues Lindsay was mistaken - the agreement was about helping with work. Did Jeanie make an offer?

Answer 26

Probably not an offer. For an offer to be accepted, it must be understood what is being offered.

Question 27

Danping tells Kaylee that she is transferring out of Professor Hill’s class and selling her contract book for $5. Kaylee says that she accepts that offer and gives Danpig $5. Is this an offer?

Answer 27

This is an offer. It is also UCC because there is a good (book).

Question 28

What variation of the objective test did they use in Embry?

Answer 28

Positioned reasonable person.