Contracts Flashcards
Contracts:
Allgemeines Prüfungsschema Contracts
- Applicable Law
- Formation
- Defenses to formation
- Statute of frauds
- Performance/breach
- Excuses for nonperformance
- Third-party beneficiaries (siehe separat)
- Remedies (siehe dort)
Contracts: 1. Applicable law
Analyse
a) UCC: when sale of goods is involved
b) CL: if K does not deal with sale of goods
c) hybrid: determine predominant purpose of transaction
Contracts: 1. Applicable law
Definition merchant für UCC
someone who regularly does business with knowledge and experience in particular goods
if selling/buying high volume: assume merchant
if unknown: assue non-merchant
Contracts: 2. Formation
Definition formation
mutual assent:
1. offer
2. termination of offer?
3. acceptance
4. consideration
Contracts: 2. Formation
Bilaterial vs. Unilateral Ks
Bilateral:
a) exchange sougth: promise for promise
b) once promise is given: both parties bound
c) offerors revocation: OK before offerees acceptance
Unilateral:
a) exchange sougth: promise for complete performance
b) once promise is given: offeror bound only when performance completed, offeree never bound to finish
c) offerors revocation: Once offeree begins performing, offeror may not revoke (option K is created), but: Mere preparation does not trigger irrevocability
Contracts: 2. Formation
- Offer (Def. + Vorauss.)
Def.: An offer must create a reasonable expectation in the offeree that the offeror is willing to enter a contract with the offered terms
Vorauss.
1. Promise: present commitment rather than mere invitation to begin negotiations
2. Definite terms: identity offeree & definite subject matter, Rest kann von Gericht ergänzt werden
a) LSK: land and price (! bei land sale wichtig)
b) service K: nature of work
c) UCC: quantity
3. Communication to the offeree: must have knowledge (not preliminary negotiations or mere invitation)
Contracts: 2. Formation
Invitatio ad offerendum Fälle
a) public offers: nur invitations, EXCEPT promises to specific offerees (“first come, first serverd, “only one can win”)
b) puffery: does not create reasonable expectation in offeree (Pepsi Points case)
c) reward offers: offer to enter into unilateral K, EXCEPT limit to how many can accept
d) Auctions: auctioneer is inviting offers, bids are offers, EXCEPT “without reserver”
Contracts: 2. Formation
- Termination of offer
1. Revocation: effective when received by offeree or by publication through comparable means, EXCEPT Fallgruppe irrevocable offer
2. Rejection: Bsp. durch counteroffer oder nonconforing acceptance (mirror image rule)
3. Lapse of time: specified oder reasonable time starting from when offer is received or would have been received if delay and offeree knows or should have known
4. Death/incapacity
5. Destruction of subject matter
6. Unconscionability
7. Invalid party: minor, insane, etc.
Contracts: 2. Formation
Fallgruppen irrevocable offers
- UCC firm offer: Offer by merchant in signed writing to keep offer open during time stated (or, if not stated, reas. time up to 3 months). No payment required
- Option (promise to keep offer open for a time for consideration (Zahlung um offer offen zu halten)
- Detrimental reliance
- Part performance
Contracts: 2. Formation
- Acceptance (Def., ZP, P: unilateral contract)
Def.: offeree must have knowledge of offer and objectively manifest assents to terms and communicate it in any reasonable manner, expressly or by conduct
ZP: Grds. Willenserklärungen müssen zugegangen sein (Bsp. offer, revocation)
aber: mailbox rule: acceptance is effective when dispatched, EXCEPT when exercising option K, dann wieder effective when received
P: unilateral contract: only complete performance constitutes acceptance of offer, completed act forms the K
Contracts: 2. Formation
P: Change of terms/battle of forms
Grds. CL: Each and every term of offer must be accepted unequivocally (mirror image rule). Any additional/different terms in the acceptance makes the response a rejection and counteroffer
Aber: UCC § 2-207 (battle of the forms): A contract can be formed between merchants even though terms of acceptance do not match terms of offer. Additional/different terms are effective as an
acceptance, unless acceptance is expressly made conditional on acceptance of proposed terms
Welche Klauseln gelten dann?
a) Both merchants + additional terms? Additional terms become part of K, UNLESS…
(1) Acceptance is made conditional on offeror’s assent to additional or different terms
(2) Original offer expressly limits acceptance to offer terms
(3) New terms materially alter original terms, e.g., arbitration clause, disclaimer,
materially shorten deadline, change usage of trade or past method of dealing
(4) Offeror objects to the change within reasonable time
b) Both merchants + different terms? Knockout rule (majority): Conflicting terms are omitted from K; gaps left are filled by UCC default terms
Minority rule: Alternatively, analyze as if additional terms (see (b) above)
c) No acceptance but parties perform anyway? Use knockout rule
Contracts: 2. Formation
- Consideration (Def.)
Def.: There must be a bargained-for exchange between the parties. Each side must give up something they wouldn’t have but for the promise. That which is bargained for must be of legal value
Legal value: a mere peppercorn will suffice
auch: peace of mind, personal satisfaction, surrendering a claim, selbst wenn (!) selbst wenn er invalid ist, wenn surrendering party (regardless of other party) believes that the claim is well founded
aber: bei geringen Dingen immer an unconscionability defense denken!
nicht:
bei illusory promise, wenn nur eine party boudn to perform ist (dann keine consideration und beide sind nicht bound)
bei gratuitous promise bzw. gifts, ABER A properly executed gift is completely binding and irrevocable even in the complete absence of consideration
bei past/moral considerations: promise in exchange for something already given or performed, ABER wiederum consideration wenn neues promise
Contracts: 2. Formation
- Fallgruppen ohne Consideration bzw. to enforce a promise in the absence of consideration
1. Promissory estoppel: allows a plaintiff to recover damages, despite no actual contract, when the defendant made a promise that the plaintiff detrimentally relied upon, and the plaintiff’s reliance on that promise was reasonable and injustice without enforcement (willfulness of breach, relative pt positions, detriment, alternatives)
2. Quasi-K = restitution, quantum meruit, implied-in-law K: plaintiff may be entitled to recover the value of the benefit conferred
3. Implied best efforts: party darf exclusive distributor sein und verspricht dafür als consideration ihre implied best efforts, CL & UCC
