contracts Flashcards
express contracts
make them using language or writing
ex. i orally promise to paint your kia soul and you agree to give me $100
bilateral contracts
This just means a “promise for a promise”
Ex. I promise to decorate your house with cat pictures, and you promise to pay me.
If there is any doubt as to what a contract is, just assume it is bilateral.
implied contracts
They are based at least in part on conduct.
Ex. if you pump gas, you are paying for that. It’s an implied contract with the gas station based on your actions.
unilateral contracts
Promises for acts.
This means that the offer expressly requires performance to accept it.
An offer to the public
Ex. if someone finds my cat, Mr. Meow will get you $500.
Prizes, contests, and rewards… these are all offers to the public for performance.
An offer to a specific person
“This offer can ONLY be accepted by performance”
promptly shipped goods
Under the UCC, an order or offer to buy goods that are to be promptly shipped may be treated as either a bilateral or unilateral offer.
It can be accepted in two ways:
1. A promise to ship; OR
2. Actual shipment
Remember PS2 → Promptly Shipped offer → 2 ways to accept: promise to ship or actual shipment.
void contracts
Void contracts are those without any legal effect in the beginning (such as a contract to commit a crime)
voidable contracts
Voidable contracts are ones that a party can choose to make void (such as contracts by minors or those with mental illness.
creation of an enforceable contract
- offer
- acceptance
- consideration
- no defenses to formation
creation of enforceable contract - mutual assent
We need an offer (a promise) and acceptance before termination of the offer;
meeting of the minds
creation of an enforceable contract - consideration
1) bargained for exchange of something of legal value OR
2) a substitute for consideration (such as detrimental reliance, promissory estoppel, or good faith modification under the UCC)
creation of an enforceable contract - no defenses to formation
- Including lack of capacity (making the contract voidable),
- mistake,
- illegality (void contract), or
- specific performance.
GOAT NOTE: on the MBE itself, the best defense against someone in a contract action is almost always that no contract was formed. After that, you can look at things like incapacity, mistake, duress, fraud, illegality, statute of frauds, etc.
what does ucc article 2 apply to?
used for contracts that are for current and future sale of goods
what does common law apply to?
services, employment, and real estate
what happens where both goods and services are being offered?
It’s all or nothing.
You just have to look at the whole deal and decide what is more important: the goods, or the services.
GOAT TIP: predominant purpose test - look at what the payment is tied to. Is the larger payment primarily to the delivery of the goods or the completion of the services? When is the payment due, when the goods are delivered or when the service is performed?
Ex. if Goat sells you some copy machines and then the contract says “goat will also service them once a year” the predominant purpose here is the copy machines, not me servicing them.
what do we need to look at to determine when we have an offer?
- the language used
- the prior relationship of the parties
- the surrounding circumstances
- the custom in the industry
determining if we have an offer - the language used
Must be sufficiently specific to make it clear that the offeror intended to create a power of acceptance in the offeree.
determining whether we have an offer - the language used - LAND
must have a price specified and the land itself identified
determining whether we have an offer - the language used - GOODS
we need a quantity that is certain or one that we can determine with a formula.
A UCC sale of goods contract is still valid if there is a missing price term (NOT THE CASE FOR COMMON LAW CONTRACT FOR SERVICES)
Reasonable terms will be supplied by the court if those terms are consistent with the parties intent.
determining whether we have an offer - the language used - EMPLOYMENT
we need a definite time for these or they will not be enforceable.
an employment contract that lasts “forever” will simply be construed as “we can fire you whenever” … you can’t enslave someone
determining whether we have an offer - the language used - disqualifying terms
Your contract cannot say stuff like: “fair,” “appropriate,” “reasonable.” appropriate to who? We can only use words like “all,” “solely,” or “only”
are general quotations offers?
No
For a price quotation to be an offer, they must be in response to a specific inquiry by someone.
Price tags and quotes are more like invitations to deal, unless they are given in response to a specific inquiry.
common law contract for services
There will be no offer without a price term.
The Karen v Plumber Dilemma
If a party performs services for someone … but no price is discussed in advance … the court will substitute in the reasonable price UNLESS Karen was aware of the price beforehand.
Reasonable price UNLESS the requesting party was aware of the quoted price beforehand.
no quantity required examples
1. requirement contract - “i promise to buy all the muffins i require”
2. output contract - “i promise to sell you all the muffins i produce”
Remember, the buyer can increase the requirements they need in these contracts so long as the increase is moderate.
I can’t require 10 muffins every day for the year then require 100,000 muffins… but i can usually bump it up by 10%
Offer must actually be COMMUNICATED to the offeree for them to accept it.
You can’t just gain indirect knowledge of an offer and be like “yeah… i think that is my offer now. I accept =)” … yeah right.
different types of NOT offers
1. inquiries
not offers
“would you consider selling me your bracelet”
would I consider? no. you are just being nosy and trying to pick pocket me.
2. price quotations
not offers unless in response to someone SPECIFICALLY asking
3. statement of intention
not an offer
“i intend to sell you my cartier bracelet”
4. opinions
“i believe your new car is worth $75”
5. advertisements
These are not offers unless they are specific to price and quantity and indicate who can accept it and WHEN.
1 muffin for $1 = no offer
1 muffin for $1 until supplies last = offer
1 muffin worth $5, first come first serve = no offer. Nope, price too speculative.
1 muffin for $5, first come, first serve = offer.