Contracts Flashcards
Common Law vs UCC
A contract for services is governed by common law and a contract for goods is governed by the UCC. A contract concerning both goods and services will be determined by the more dominant aspect of the contract as guided by its language, the nature of the supplier business, and the relative values of goods vs services.
Contract Formation
A valid contract requires an offer, acceptance, and consideration. Consideration exists when there is a bargained-for exchange between two parties. Under UCC a contract for the sale of goods may be made in any manner sufficient to show agreement.
Expectation Damages
are intended to put the injured party in the same position as he would have been had the contract been performed , however if the damages are too speculative, a non-breaching party is entitled to reliance damages
The Offer and Terminating the Offer
An offer is an outward manifestation and a signal that acceptance will conclude the deal. Ads are not offers unless they advise a limited quantity available.
An offer can be revoked by the offeror at any time prior to acceptance, even if there was a promise to keep it open unless there was a consideration in exchange for that option or a firm offer requiring two merchants to confirm the offer be held open in signed writing. Additionally, an offeror can revoke an offer expressly or indirectly by their conduct, or by a reasonable time lapse.
Acceptance
“An offeree’s acceptance of an offer must be unambiguous and exhibit unequivocal words, conduct, or agreement indicating acceptance.
Contract Modification
“Under the common law, an agreement modifying an existing contract generally must be supported by new consideration. A pre-existing duty to perform under a contract is not adequate new consideration.”
“Under the UCC, an agreement modifying an existing contract does not need new consideration to be enforceable. As long as the modification is made in good faith, it is valid even without additional consideration.”
Mirror Image Rule & UCC 2-207
under the UCC, the acceptance does not have to mirror the offer and can include different or additional terms. UCC-207 determines whether the purported acceptance containing new terms will operate as an acceptance or as a counteroffer. It states (1)a definite expression of acceptance or written confirmation (2)sent within a reasonable amount of time (3)operates as an acceptance even though it states additional/different terms than those agreed upon (4)unless acceptance is expressly made conditional upon assent to the additional terms
Anticipatory Repudiation
Anticipatory repudiation occurs when there has been an unequivocal refusal of the buyer or seller to perform, or when a party creating reasonable grounds for insecurity fails to provide, in writing, adequate assurances within 30 days of demand for such assurances. The rights of an aggrieved party upon repudiation include canceling the contract, suing for damages or specific performance, or ignoring the repudiation and continuing the contract.
