Contracts Flashcards
Applicable Law - UCC
Applicable Law - Common Law
The UCC governs contracts that involve the sale of goods. –Here, the contract is covered by the UCC because the agreement involves a sale of goods, here X. The UCC special rules apply where both parties are merchants. –Here, because P and D are in the business of buying and selling X, the UCC special rules apply.
The common law governs contracts that involve the sale of land or a services contract. –Here, the contract is covered by the common law because the agreement involves X.
Formation
Quasi-contract
requires 1) offer, 2) no successful termination of an offer, 3) acceptance, 4) consideration, and 5) no valid defenses
requires the unjust enrichment of party at the expense of the other party. To avoid injustice, a court may require unjustly enriched party to pay restitution to an opposing party in the amount of the enrichment. There’s no actual contract in quasi-contract situation.
Offer requires
1) manifestation of present intent to contract, 2) definite and certain terms, and 3) communication to an offeree. Definite and certain terms requires: a) parties, b) subject matter, c) time for performance, d) price, and e) quantity
Requirements (“output”) contracts
require that the quantity must be stated in terms of the buyer’s requirements or the seller’s output. Requirements contracts cannot be delegated
Advertisements
are generally not offers, except if they are (1) specific as to quantity and (2) indicate who can accept.
Lapse of Offer
terminates an offer if (1) the offeree fails to accept the offer within a specified period of time frame, or (2) the offeree fails to accept within a reasonable time if no such time frame is indicated
Revocation
requires a statement by the offeror indicating unwillingness to contract or inconsistent actions with the willingness to maintain an offer. Revocation of a mailed offer is not effective until receipt. Accepted offers cannot be revoked. Irrevocable offers include option contracts, merchants firm offers, and offers upon which the offeree places detrimental reliance.
Option Contracts
require that 1) the offeror promise to keep the offer open and 2) that the promise be supported by consideration. Rejection of an offer under an option contract does not terminate the offer during the option period, unless the offeror detrimentally relid on the rejection.
Operation of Law
terminating an offer requires death, incapacity, destruction of the subject matter, or supervening illegality.
Merchant’s Firm Offer
requires 1) an offer for the sale of goods in 2) a signed writing that promises to hold the offer open 3) by a merchant. Firms offers are open for up to three months.
Unilateral Reliance
requires that an offer remain open if performance commenced pursuant to a unilateral contract. The offer is irrevocable for a reasonable time to ascertain if the performance is completed.
Detrimental Reliance
requires that an offer remain open if an offeree detrimentally relies on an offeror’s statement or conduct and such reliance is reasonably foreseeable. Detrimental reliance can overcome the merchant’s firm offer three-month deadline.
Rejection
requires that 1) offeree refuse to accept offeror’s proposal and 2) offeree communicates the refusal to the offeror. Rejections are effective when received. Rejection of an offer under an option contract does not terminate the offer during the option period, unless the offeror detrimentally relied on the rejection.
Counteroffers
occur when an offeree responds to an offer with a proposal that is different from the offeror’s original offer. Counteroffers reject the prior offer and propose a new offer.
Conditional Acceptance
requires an acceptance that occurs subject to the satisfaction of a condition
(e.g., “I accept if…”)
Mirror Image Rule
requires an acceptance ascent to all the terms of an offer without any variation. Under the common law, acceptances that vary the terms in any way are a counteroffer.
Modification (UCC)
requires 1) good faith request which, if met, 2) does not require consideration, and 3) must be in writing to satisfy the Statute of Frauds. Modification (common law) requires consideration.
Battle of the Forms
requires an additional term to become part of the contract if 1) both parties are merchants, 2) none of the following occur: (a) the offer is expressly limited to its terms, (b) the offeror objects within a reasonable time, and (c) the new term is a material alteration. If both parties are not merchants, then the additional term is a proposal that the non-merchant may accept or reject.
