Contracts

Question 1

Common Law vs. UCC

Answer 1

Common law: services
UCC: sales of goods

Mixed contracts:
–Divide the goods and services portions and apply UCC or common law to corresponding portion or
–Predominant purpose of the k to determine common law or UCC

Question 2

Valid contract exists when there is

Answer 2

1. Mutual assent (valid offer + acceptance)
2. Consideration, and
3. No defenses to formation that would invalidate an otherwise valid k

Question 3

Ads

Answer 3

Usually only an invitation to deal and not an offer. But if ad is very specific and leaves nothing open to negation, it may be an offer

Question 4

Terms Required in the Offer

Answer 4

Common Law:

1. Parties
2. Subject
3. Quantity
4. Price

UCC:
Main difference is price is NOT required. UCC gap fillers allowed.
1. Parties
2. Subect
3. Quantity
–Requirement and output ks are valid
–Requirement: seller agrees to provide as much as buyer requires
–Output: seller agrees to sell entire inventory of product to buyer

Question 5

Terminating the Offer

Answer 5

Valid offer will be invalidated if it’s terminated any time before acceptance. It can’t be accepted or revived UNLESS a new offer is made.

An offer is terminated when any of the following is done before acceptance:
1. Offeror revokes through express communication to offeree (unless irrevocable offer)

2. Offeree learns that offeror has taken an action that clearly indicates offeror can no longer go through with k (ex. if offeree finds out offeror already sold the item)
3. Offeree rejects the offer
4. Offeree counteroffers (not necessarily the case under the UCC)
5. Offeror dies or otherwise becomes incapacitated (only terminates an offer, not a valid k)
6. A reasonable amount of time passes (usually requires weeks, not days) OR
7. The subject matter of the offer becomes illegal or is destroyed

Question 6

Irrevocable Offers

Answer 6

1. Option ks: consideration is given to keep offer open
   –Ex. Offeree pays $5. (remember: mere peppercorn is valid consideration)
2. Firm Offers: Under the UCC, a merchant can make a firm offer to buy or sell goods and the firm offer will either last as long as stated in the offer or a reasonable time not to exceed 90 days. Firm offer must:
   a. Be in writing
   b. Contain explicit promise not to revoke, AND
   c. Be signed by the merchant
3. Unilateral offer where offeree has started performance
   –Unilateral k: accepted by performance
   –Bilateral k: accepted with return promise
4. Detrimental Reliance: Offer can’t be revoked if offeree reasonably and detrimentally relies on the offer in a foreseeable manner

Question 7

Acceptance

Answer 7

Offeror is master of offer so offeree MUSt accept offer according to rules of the offer

Silence doesn’t manifest acceptance unless past history between parties shows it’s acceptable

Bilateral ks: start of performance manifests acceptance
Unilateral ks: start of performance makes offer irrevocable but the offer is only accepted upon completion