Contracts Flashcards
Seven general issues in contract law: Armadillos from Texas play rap, eating tacos.
Applicable law Formation of K Terms of K Performance Remedies for unexcused non-performance Excuse of non-performance Third-party problems
What is a contract?
An agreement that is legally enforceable.
What are the do kinds of contract offers?
1) Unilateral K offers: expressly requires performance as the only possible method of acceptance.
2) Bilateral K: all other offers. Usually silent to method of acceptance. This is the default.
Presume there’s a bilateral K unless…
1) reward, prize, contest
2) offer expressly requires performance for acceptance
What is quasi-contract?
Equitable remedy for when there is a K but it’s not fair to be bound by K rules. Resort here when K gives bad result.
What are the two kinds of law applicable in K?
CL: for real estate, services K, everything not subject to Art. 2
Art. 2: sale of goods (all things movable at the time they are sold).
What law applies when there is a mixed sale of goods and non-goods?
Apply the law that applies to the more important part of the contract to the entire K. EXCEPT if K divides payment apply UCC to goods part and CL to remainder.
What are the three possible problem areas in creating an agreement?
1) Initial communication (offer)
2) What happens after the initial communication (termination of offer)
3) Who responds and how they respond (acceptance)
Difference between void, voidable, and unenforceable
Void: w/o any legal effect from beginning. Can’t be enforced.
Voidable: one or both parties may elect to avoid.
Unenforceable: otherwise valid, but not enforceable due to defense extraneous to formation, like SOL or SOF.
What is the general test for whether an initial communication is an offer?
Manifestation of commitment by one person: Look for words or conduct showing commitment that would make a reasonable person in position of the offeree believe that his or her assent creates a K.
What must be contained in a offer for sale of goods and real estate?
Goods: quantity.
Real estate: price and description.
What is the effect of vague or ambiguous terms on whether an offer has been made under both CL and UCC?
If vague or ambiguous language relates to a material term, NO OFFER. Such terms include: appropriate, fair, or reasonable.
In determining whether communication creates a reasonable expectation of willingness to enter into K, consider these 3 factors:
1) Expression of promise, undertaking, or commitment to enter K
2) Certainty and definiteness of essential terms
3) Communication of 1 and 2 to offeree
What is the inquiry for whether terms were definite and certain enough to form basis of K?
Were enough essential terms provided so that K is capable of enforcement.
Are requirements/output Ks sufficiently descriptive in content to form agreements?
Yes if states the quantity of goods to be delivered under K in terms of buyer’s requirements or seller’s output. Look for language like all, only, exclusively, and solely to make K not vague or ambiguous.
If there is a requirements K, may requirements be increased?
Buyer can increase so long as increase is in line w/ prior demands. Limit: no unreasonably disproportionate increases.
What do we do w/ missing terms?
If appears parties intended to K and reasonably certain basis for giving remedy, enforce.
For Art. 2, if no price, price is reasonable price at time of delivery and performance is w/in a reasonable time.
What if a missing term is too vague to be enforced?
No enforcement unless there has been part performance that clarifies the vague term or acceptance by full performance.
Is an ad or quote an offer?
No. It’s an invitation for offers. EXCEPTIONS:
1) If ad is in nature of reward, offer.
2) If ad specifies quantity and indicates who can accept.
3) Price quote sent in response to inquiry = offer.
What are the ways an offer may be terminated?
1) Lapse of time (either stated or reasonable but more than a month = lapse)
2) Death of a party prior to acceptance (unless offer is irrevocable)
3) Words or conduct of offeror i.e. revocation
4) Rejection by offeree
How may an offer be revoked?
Later unambiguous statement or conduct by offeror to offeree, or that offeree is aware of in the case of conduct, of unwillingness or inability to K. Revocation is effective when received by the offeree.
How may a published offer be revoked?
By similar publication.
What are the limits on offeror’s ability to revoke an offer?
1) Option: offeree gives consideration of a promise by offeror not to revoke an outstanding offer.
2) Art. 2 Merchant’s Firm Offer Rule
3) Detrimental reliance
4) Beginning performance in response to true unilateral K offer
5) Beginning performance in response to offer indifferent as to manner of acceptance.
What is the firm offer rule?
If 1) a merchant (person in business) 2) offers to buy or sell goods in a signed writing and 3) the writing assures the offer will be held open for a period not to exceed 3 mos., offer can’t be revoked. ONLY APPLIES TO ART. 2 SALES!!!!