Contracts Flashcards
Governing Law
UCC governs the sales of goods. Goods are movable, tangible items at the time of contract formation (includes livestock). A sale is the passing of title for a price. Common law applies to all other transactions, including services or real property.
Merchants
A merchant regularly deals in the good of the kind in the transaction, or is an expert in the field.
Hybrid Contract
Hybrid contract includes both sales of goods and services. Predominant purpose test (majority) determines whether the goods or services were the main reason for the transaction, and applies either UCC or common law to the entire transaction. Factors: language, nature of bsns, relative value of goods vs svcs. Gravamen test (minority) applies both UCC and common law to each portion accordingly. (Comp software = majority is UCC.)
Contract
A contract is a set of promises enforceable by law (the performance of which the law deems a duty, and the breach of which it provides a remedy). It includes offer, acceptance, consideration, and no defenses to the formation. Three things you can do to a contract: perform, breach, modify (rescind considered modification).
Modification
Includes mutual assent, consideration for common law, and good faith in UCC.
Unilateral Contract
One promise for performance; acceptance can only be by performance, which creates and completes the contract.
Bilateral Contract
Exchange of mutual promises.
Offer
An offer is a unequivocal manifestation of present intent to enter into a bargain containing certain, definite terms communicated to an offeree. An offer is also a promise to do something conditional on the other party doing something. Preliminary negotiations usually do not contain an offer.
Offer creates power of acceptance for offeree, and receipt of acceptance will create mutual assent and conclude the bargain. Advertisements and form letters generally are not offers, but invitations to make an offer, unless reward offer, or specifically directed at person or group (offeree identified), or use language of commitment. Preliminary negotiations are not offers if further manifestation of assent is required. Quotes are not offers.
Once an offer is made, you can do four things: accept, reject, revoke, or let lapse; death/incapacity of either party terminates offer.
Certain Definite Terms
Certain definite terms include the subject matter, quantity, price, identification of the parties, and time of delivery. Purchase orders are offers. In a reward offer, performance acts as identification of party happens and acceptance.
Gap Fillers
UCC will insert gap fillers for missing terms, such as price, for which it will insert the market price at the time and place of delivery. In real estate, price cannot be missing. In sales of goods, quantity cannot be missing. There are no gap-fillers for choice of law, forum selection and arbitration, and regular civil procedure rules would apply. Place of delivery – seller’s place of business; time for shipment – reasonable; time for payment – when buyer receives; assortment – at buyer’s option.
Multiple Offerees
Commercial Advertisements, Reward Offers, Auctions
Commercial Advertisements
Commercial advertisements - catalogs, price lists, circulars; ads to multiple recipients are generally treated as invitations to make an offer, and not an offer bc responses may exceed available supply.
Reward Offers
Reward offers - name a price for service but not specify offeree (lost dog) - treated as offers bc considered communication that promise bounty in exch for pfmc for specified task. Two types: 1) self-limiting rewards - offer that indicate task to be rewarded can only be performed once (lost dog). 2) open-field rewards - offers that indicate task to be performed can potentially be performed by multiple parties; unless otherwise specified in offer, open-field rewards can be accepted by any person renders requested performance in accordance with terms of reward.
Lapse of Time
a
Auctions
Auctions - items sold to highest bidder - auctioneer inviting offers, and responsive bids are offers. Exception - if auction without reserve, then auctioneer making offer to sell to highest bidder.
