Contracts

Question 1

Additional Terms - UCC

MBE

Answer 1

Under the UCC, a response t oan offer that adds additional terms but does not make these terms a condition of acceptance is treated as an acceptance, creating a contract.

However, the additional terms are not part of the contract if the additional terms are material, which is a question of fact that the court must determine.

Question 2

Detrimental Reliance

MBE

Answer 2

A gratuitous promise may be enforceable despite lack of consideration if the party making the promise has reason to expect the promise will induce reliance on the part of the promissee, where there has been reliance in fact, and where injustice may be avoided only by enforcement of the promise.

Question 3

llusory Promise

MBE

Answer 3

An illusory promise is a statement that appears to be promising something but does not actually commit the promisor to anything at all.

One common illusoryp romise occurs when a promisor reserves the right to change his mind, which does not bind the promisor and is illusory. However, if the promisor’s right to change his mind is limited by some objective standard, consideration is likely to be foud present and the contract upheld.

An illusory promise may become adequate consideration if the time during which the promisor could choose alternative performance has passed. The promise becomes consideration once the period for exercising the righhto terminate has passed.

Question 4

Condition Subsequent

MBE

Answer 4

A condition subsequent is an event that, if it happens, will defeat or modify an existing arrangement or discharge an existing duty.

In a contrac,t a conditions subsequent cvan often terminate the duty of one party to perform under the agreement.

Question 5

Divisible Contract

MBE

Answer 5

A contract is considered divisible if three elements are satisfied:
* the contract divides each party’s performance into at least two parts
* each party has the same number of parts they are obligated to perform
each party’s performance on each part is agreed to be the equiaalent of acorresponding part for hte other party

The UCC discourages treatment of contracts as being divisible.

Question 6

Installment Contracts

MBE

Answer 6

The UCC defines an installment contract as one that provides for the delivery of goods in seperate lots to be seperately accepted.

When an installment under an installment contract is non-confoming, the buyer must accept that installment if the seller gives adequate assurance of the defect’s cure, unless the non-conformity substantially impairs the value of the installment and cannot be cured.

Question 7

Mutual Mistake

MBE

Answer 7

A mutual mistake is when a contract is based upon a mistake made by both parties.

Requirements:
* mistake must concern basic assumption on which contrac was made
* mistake must have a material effect on the agreed exchange of performances AND
* adversely-affected party must not bear the risk of the mistake

Party wishing to avoid the contractm ust show that the resulting imbalance in the agreed exchange is so seere that he cannot fairly be required to carry it out..

Question 8

UCC Firm Offer Rule

Answer 8

An offer by a merchant in a signed writing that assures it will remain open to be considered irrevocable.

Common law requires consideration for an option.