Contracts

Question 1

Offer

Answer 1

Requirements of validity; present intent, definite terms, communication

Question 2

Option

Answer 2

offers part of a contract for time; Paid-for offer, consideration IS required, irrevocable

Question 3

Merchant Firm Offer

Answer 3

In writing, signed by a merchant, 3 months or less, NO consideration required

Question 4

Consideration

Answer 4

Doing what you are free not to do OR not doing what you are free to do; The amount is irrelevant but it must be paid; Bargained for exchange

Question 5

Merchant Confirmation Memo

Answer 5

Writing, between 2 merchants only, underlying oral agreement, 10 day max to object; Gas transaction confirmations at work e.g.

Question 6

Formation of a Contract

Answer 6

• Offer
• Acceptance
• Consideration
• No defenses

Question 7

UCC - Uniform Commercial Code

Answer 7

A form of codified commercial law that was developed by lawyers, busines people, and legal experts to create a system of conisitent contract principles across state lines; CODIFIED in statutory form; APPLIES to the sale of goods

Question 8

Common Law

Answer 8

Developed in judicial decisions on contracts; requires more details and precision than UCC; APPLIES to service and real estate contracts

Question 9

Parol Evidence Rule

Answer 9

When no more external evidence can be used to contradict the terms of a contract; a “cut-off” point set by the courts, “get what you want in writing”, applies when you have a complete contract with no ambiguities in final written form

Question 10

Defenses to formation

Answer 10

• Minor (Age < 18)
• Insanity (declared or “run of the mill”)
• Drunk
• Mistake
• Misrepresentation
• Fraud (potential punitive damages)
• Undue Influence
• Duress
• Illegality

Question 11

When does a contract have to be in writing?

Answer 11

UCC - Sale of goods > $500.00

Common Law - Anything that is going to take over a year to complete…from the date of the ORAL agreement e.g.

Question 12

Termination Possibilities

Answer 12

• Fail to meet conditions
• Parties agree to it
• Statute of limitations (generally 4 years)
• Breach
• Novation (Requires the consent of ALL three parties)

Question 13

Acceptance Timing

Answer 13

Timing - if authorized, is effective when the offeree delivers the ____ to the medium even if it is never received by the offeror; IF unauthorized means, then is only effective when received by the offeror

Question 14

Acceptance

Answer 14

Unilateral offer - upon completion of the required act
Bilateral offer - MUST be absolute, unequivocal, unconditional, and communicated to the offeror (Common law - mirror image rule; UCC - depends on merchants or nonmerchants)