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J.Edits.Contract.Law > Contract Fundamentals > Flashcards

Contract Fundamentals Flashcards

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1
Q

What does the UCC govern?

A

The sale of goods.

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2
Q

What are examples of types of goods the UCC covers?

A

Any movable item:

  1. Growing crops: while crops are still growing & after harvest
  2. Uncut timber
  3. Unborn animals
  4. Computer software and other electronic information.
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3
Q

In hybrid cases, which involve both the sale of goods and a services contract, what law applies?

A

Law determined by the predominate purpose of the transaction, ask: is the transaction more about the good or more about the service?

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4
Q

What factors are weighed in determining the predominant purpose of a contract?

A
  1. The language of the contract
  2. Nature of the supplier’s business
  3. Relative values of goods v. service.
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5
Q

In the sale of goods the common law will apply unless?

A

The UCC provides contrary provisions.

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6
Q

How are implied-in-fact contractual obligations formed?

A

Conduct rather than words.

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7
Q

When does an implied-in-law contractual obligation arise?

A

One party bestows a benefit on another and it is unjust to retain the benefits without paying(e.g. emergency services).

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8
Q

What is Quantum Meruit?

A

The cause of action for an implied-in-fact contract to recover the reasonable value of the services provided.

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9
Q

In order to constitute an offer, a party’s communication must meet what two requirements?

A
  1. An outward manifestation (oral, written, or conduct)
  2. A signal that acceptance will conclude the deal(nothing left to do but say “yes” to conclude the deal).
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10
Q

What is the American advertising offer rule?

What is the exception?

A

Ads, catalogues, and price lists are not offers; they are all invitations for offers.

Exception

When language that identifies who gets the limited supply of goods in an excess of demand situation.

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11
Q

What are two types of reward offers?

A
  1. Self-limiting rewards
  2. Open-field rewards.
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12
Q

Define self-limiting awards.

A

Rewards that indicate the task to be rewarded can be performed only once.

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13
Q

Are offers for rewards offers?

A

Generally, reward offers are treated as offers because they offer money in exchange for the performance of a specified task.

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14
Q

Who is the offeror in an auction?

A

The auctioneer is inviting offers and the responsive bidders are the offerors.

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15
Q

What is the legal effect of an offer?

A

An offer creates the power of acceptance in the offeree.

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16
Q

List the four ways to terminate power of acceptance.

A
  1. Lapse
  2. Death or Incapacity
  3. Revocation by Offeror
  4. Rejection by Offeree.
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17
Q

When is the power of acceptance terminated due to lapse?

A
  1. An offer lapses after the time stated in the offer
  2. After a reasonable time

Or

  1. Face-to-Face conversation rule applies.
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18
Q

What is the face-to-face conversation rule?

A

An offer made in a face-to-face conversation generally lapses at the end of the conversation; unless, the offer states otherwise.

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19
Q

When is the power of acceptance terminated due to death or incapacity?

A

Death: the death of either party terminates the power of acceptance.

Incapacity: If either party becomes mentally incompetent, the power of acceptance is terminated.

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20
Q

When is a power of acceptance terminated due to offeror’s revocation?

A

Revoked before the offer is accepted+ Revocation communicated to the offeree.

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21
Q

When does direct revocation occur?

A

When the offeror directly communicates to the offeree an intent to withdraw the offer.

22
Q

When does indirect revocation occur?

A
  1. Offeror takes an action that is inconsistent with the intention to go through with the offer
  2. The offeree learns about such action from a reliable source.
23
Q

What is the functional equivalents rule?

A

The offeror revokes by communicating the revocation in a functionally equivalent manner to how the offer was made. The communication terminates the power of acceptance even if the offeree is unaware of the revocation.

24
Q

What are the ways to prevent offeror revocation?

A
  1. Option contract

Or

  1. Firm offer under the UCC.
25
Q

Elements of a common law option contract?

A
  1. An offer
  2. 2nd promise to keep the offer open for a time period
  3. Consideration for the 2nd promise
26
Q

The majority rule is where a general contractor uses a particular subcontractor’s bid to formulate his own, what type of contract has been formed?

A

Promissory estoppel applies to protect the general contractor from revocations of the subcontractors.

27
Q

What are the elements for a firm offer?

A
  1. The offer is made by a merchant
  2. Offer is made in a signed writing by the merchant
  3. Offer expressly states by its terms that it will be held open.

A firm offer that meets all of these requirements becomes irrevocable for:

The period of time stated

or

If not stated, a reasonable time.

28
Q

How long can a “firm offer” remain open?

A

3 months, if > 3 months, you need consideration.

29
Q

How can an offeree reject an offer?

A
  1. Outright rejection
  2. Counteroffer
  3. Non-conforming acceptance
30
Q

What is the mirror image rule and when does it apply?

A

In common law contracts, acceptance must mirror the offer and any variation results in a counter offer.

31
Q

What are bilateral contracts and who is bound by them?

A

Contracts that exchange promises. Once promises are exchanged: both parties are bound.

32
Q

What are unilateral contracts and who is bound by them?

A

A promise is made for performance in exchange. The offeror is bound only when offeree’s performance is completed and the offeree is never bound.

33
Q

When can an offeror revoke a unilateral contract?

A

Once the offeree begins performance, an option contract is created and the Offeror may not revoke.

Acceptance of the offer is still effective only upon the completion of performance.

34
Q

When does acceptance under the common law occur?

A
  1. The acceptance mirrors the terms of the offer

And

  1. The acceptance is communicated to the offeror.
35
Q

If the offer stipulates a particular means of communicating acceptance then, what is required?

A

The means stipulated in the offer.

36
Q

If the offer is silent as to the means of communication for acceptance, the offeree can accept by?

A
  1. Means used by the offeror
  2. Means customarily used in similar transactions

Or

  1. A means of communication that equivalent in speed in reliability to the means used by the offeror.
37
Q

When does acceptance by silence occur in common law contracts?

A
  1. Where the offeree takes the benefit of the offeror’s services with:

Reasonable opportunity to reject them; and,

Reason to know that compensation was expected.

  1. Where the offeror gives to the offeree reason to understand that acceptance may be communicated by silence;

the offeree’s silence will be effective if the offeree intends to accept

  1. Where because of previous dealings it is reasonable that the offeree should notify the offeror when he does not intend to accept.
38
Q

In a unilateral contract, how is acceptance effectuated?

A

Only by completing performance.

39
Q

What does the mailbox rule not apply to?

A
  1. Offers
  2. Rejections
  3. Revocations
  4. Option contracts.
40
Q

What does the mailbox rule apply to?

A

Acceptance by mail is effective upon dispatch; so long as properly posted.

It does not matter if the acceptance is lost in the mail.

41
Q

When a rejection, offer, or revocation is put in the mail, when is it communicated?

A

Upon receipt (≠ upon being read).

42
Q

What carrier services does the mailbox rule apply to?

A

Mailbox applies to any means of transmission that involves a foreseeable delay between dispatch and receipt.

43
Q

In a situation where the parties simultaneously dispatch identical offers, what is the effect?

A

Offers are only effective upon receipt; therefore, dispatch of simultaneous offers is not legally relevant.

44
Q

What happens when an offeree dispatches two responses to an offer, the first purporting to reject the offer and the second purporting to accept it?

A
  1. If the acceptance reaches the offeror first: there is a contract by virtue of the communicated acceptance.
  2. If the rejection reaches the offeror first: there is no contract.
45
Q

How can seller accept a buyer’s offer under the UCC?

A
  1. A promise to ship goods in conformance with the offer
  2. Prompt or current shipment of the goods in conformance with the offer
  3. Shipping non-conforming goods unless sent as an accommodation.
46
Q

What is the effect of a UCC seller’s shipment of nonconforming goods?

A
  1. Accepts the offer forming the binding contract
  2. Puts the seller in breach of the contract.
47
Q

UCC will allow for a binding contract to be formed with a non-mirror acceptance when?

A
  1. Both parties are merchants
  2. Terms address a new topic not addressed by the offer not expressly limited to nor objected to and does not materially alter the contract; or, terms that change an existing term in the offer.
48
Q

Under the UCC what is a term that materially alters a contract?

A

Terms that would result in surprise or hardship if incorporated without the express consent of the other party:

  1. Warranty Disclaimers
  2. Clauses that materially shorten the deadline for raising complaints
  3. Clauses that change industry standard or past courses of dealing.
49
Q

Under the UCC, what must the parties be for non-mirror acceptance to be binding?

A

Both merchants. If one is a consumer, then the acceptance is a proposal.

50
Q

What are the terms of a UCC contract formed by conduct?

A
  1. Terms upon which the writings of the parties agree

And

  1. The default terms provided by the UCC.
51
Q

What is the legal effect of agreements that consumers find once they open the boxes or packaging containing their goods?

A

In consumer transactions, they are mere proposals that the consumer can accept or reject.

J.Edits.Contract.Law (8 decks)

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