Contracts Flashcards
Three principal questions
has an enforceable contract been formed
has the contract been performed
what are the remedies for breach
what is a contract
legally enforceable agreement
Two universes of contract law
Common Law: real estate or services
UCC: deals with goods
what is the deal with mixed contracts
All or nothing rule: must fall under either UCC or CL
exception: divisible contracts
Predominant Purpose rule: does a good or service play a bigger role
Topics regarding the formation of a Contract
Agreement (offer and acceptance)
consideration
defenses to formation
statute of frauds
what must there be for a contract to be formed
offer and acceptance
definition of an offer
a manifestation of a willingness to enter into an agreement that creates a power of acceptance
what standard governs offer and acceptance
the objective test: the outward appearance of words and actions matter
not secret intentions
serious intent to be bound
Who must the offer be directed at
the specific offeree, cant accept an offer unless it is directed at you
exception: contest/reward offers
How specific do the terms have to be
CL: all essential terms, parties, subject, price, and quantity
UCC: only essential term: quantity
price doesnt need to be stated
UCC fills the gaps based on reasonableness
Requirements and Output contracts
exceptions to the quantity requirement
Requirement K: buyer agrees to buy all that buyer will require of a product from the other party
if it is substantially more- that is nonconforming tender
Output K: seller agrees to sell all that the seller manufactures of a product to the buyer
invitations to deal
not an offer
preliminary communication that reserves a final right of approval with the speaker
not an acceptance
EX.: advertisement
exceptions: reward advertisements and very specific advertisements that leve nothin open to negotiation
Ways to terminate an offer
1)revocation: express communication to the offeree
sent by mail: has to be received
2)constructive revocation: offeree learns that offeror has taken action that is absolutely inconsistent with a continuing ability to contract
3)rejection
4)counteroffer
5)death: death has to happen before K is accepted
exception: option Ks do not terminate
6)reasonable amount of time passes
Irrevocable offer situations
1)Option: independent promise for additional consideration to keep the offer open for a period of time
Firm Offer: 1) a merchant 2)in writing and signed by offeror 3) explicit promise not to revoke
time period: 1) stated in offer, or 2) reasonable time not to exceed 90 days
signed required: official letterhead and initialed is fine
Unilateral contract: offeree has started performance
Detrimental reliance: offeree reasonably and detrimentally relies on the offeror’s promise prior to acceptance, liable to the extent necessary to avoid injustice
Unilateral v. Bilateral contracts
Unilateral: arises from a promise that requests acceptance by an action of the promissee
Bilateral: request for a return promise
if ambiguity: acceptance can be by either performance or a return promise
Notice of Acceptance for Unilateral Ks
offeree not required to give notice after completing performance unless:
1)offeror wouldnt learn of performance with reasonable certainty/promptness
2)offer requires notice
If notice is required but not provided, offeror’s duty is discharged, unless:
1)offeree exercises reasonable diligence to give notice
2)offeror learns of performance within a reasonable time, or
3) offer indicates notice of acceptance is not required
Notice of acceptance for Bilateral contracts
offeree must give notice of acceptance
mailbox rule
UCC: if acceptance is made by beginning performance, notice is required within a reasonable time, failure to give notice results in lapse of offer
Revival
a terminated offer may be revived by the offeror and accepted by offeree
Promises binding without consideration
1)pay a debt barred by SOL
2)perform voidable duty: new promise to perform prior voidable contract
3)material benefit rule
4)promissory estoppel
Material benefit rule
when a party performs an unrequested service for another party, modern trend permits the performing party to enforce the promise of payment for material benefits received to extent necessary to prevent injustice
acceptance
a manifestations of a willingness to enter into the agreement by the offeree
Other acceptance rules
must be specifically directed to the person trying to accept it
must know about the offer in order to accept it
must communicated acceptance to other party
mailbox rule: acceptance sent by mail is effective when letter is sent
when does mailbox rule not apply
if the offeree sends something else back first
other types of communications
option contracts
other media unclear
means of acceptance
offeror is master of the offer and can dictate the manner and means by which an offer may be accepted
if nothing state: any reasonable manner