Contracts

Question 1

Goods

Answer 1

All things movable at the time they are identified as the items to be sold under contract (tangible things – cars, horses; not services or intangibles (like a patent))

Question 2

Merchant

Answer 2

One who regularly deals in goods of the kind sold or who otherwise by their profession holds themselves out as having special knowledge or skills as to the practices or goods involved

Question 3

Offer

Answer 3

1) An expression of a promise, undertaking, or commitment to enter into a K 2) through a communication to the offeree with 3) certain and definite terms

Question 4

Offer Requirements for Specific Contracts

Answer 4

Real Estate Transactions: Must identify land and price terms (most courts do not supply a missing price term for realty)

employment and other services: if no duration, it is assumed to be at-will employment. for other services, the nature of the work to be performed must be included in the offer.

Sale of goods: the quantity being offered must be certain or capable of being made certain

note for requirement (output) contracts: it is assumed that parties will act in good faith (provide and request all of the goods produced) so there can’t be a tender or demand for a quantity unreasonably disproportionate from any state estimate or normal comparable prior output

Question 5

Missing Terms (From offer)

Answer 5

Missing terms do not prevent formation; majority and Article 2 hold that courts can supply reasonable terms to those that are missing

Price: except for Ks for real property, failure to include a price does not prevent formation; for sale of goods, price will be a reasonable price at the time of delivery

time: if no time, it is implied to be a reasonable time

vague terms: can’t replace vague terms –> have to deal with ambiguity, prior practice can go a lot of the way (flagging parole evidence, too)

terms to be agreed on later: if the term is material to the K, this will prevent formation for lack of certainty

Question 6

Termination of Offer

Answer 6

An offer can’t be accepted after it has been terminated. An offer can terminate by: Lapse of Time, Rejection (Express or by Counteroffer), or Revocation

Distinguish mere inquiry from rejection (but note: conditional acceptance is a rejection)

Rejection is effective when received by the offeror

Rejection of an option or a counteroffer to an option does not terminate the offer –> offeree can still accept the original offer within the option period unless offeror has detrimentally relied on the rejection

Question 7

Revocation of Offer

Answer 7

The retraction of an offer by the offeror. Can revoke by directly communicating the revocation, by publication, or indirectly (so long as the offeree receives 1) correct information, 2) from a reliable source, 3) of acts of acts offeror that would indicate to a reasonable person that the offeror no longer wishes to make the offer)

Revocation is effective when received by the offeree; for publication, it is effective when published

offerors can revoke at will except for 1) options; 2) merchant’s firm offer under article 202; 3) detrimental reliance; 4) beginning performance in response to true unilateral contract offer; 5) beginning performance for an offer indifferent as to the manner of acceptance

termination by operation of law: death or insanity of either party; destruction of subject property; and supervening illegality

Question 8

Merchants firm offer

Answer 8

1) if a merchant, 2) offers to buy or sell goods in a signed writing, and 3) the writing gives assurances that it will be held open, then the offer is not revocable during the time stated (or if no time, then reasonable time not exceeding 3 months)