Contracts _ Formation Flashcards
Contract Formation (3)
OFFER
1) Offer
2) Acceptance
3) Consideration
(and obviously no defenses apply, but you know that)
Offer
OFFER
There is an offer when there is a manifestation of present intent to enter into a bargain stated in certain and definite terms communicated to an identifiable person that the offeree can reasonably understand that a contract would result if accepted.
Ads
OFFER
- Not an Offer
- “Invitation to an Offer”
Termination of an Offer (5)
OFFER
- Death
- Lapse of time
- Rejection
- Counteroffer
- Revocation
Direct Revocation:
OFFER
- Retraction of an Offer by the offeror
Indirect Revocation:
OFFER
- Person receiving Offer LEARNS another deal was made
Revocable:
OFFER
- Offers are REVOCABLE
- Only three instances when an Offer is not revocable
- Option K; UCC Firm Offer; Unilateral K
Irrevocable Offer
Option Contract:
OFFER
1) Promise to keep Offer open
2) Additional Consideration
Irrevocable Offer
UCC Firm Offer + Time Limit
OFFER
1) Merchants
2) Signed writing by Merchant
3) Can only stay open for a MAXIMUM of 3 months
Irrevocable Offer
Unilateral K v Bilateral K
OFFER
Unilateral K = Promise for an act
vs.
Bilateral K = Promise for a promise
Common Law Mirror Image Rule
ACCEPTANCE
- Acceptance must mirror the Offer
How to Accept an Offer (3 - 🤫 / 🏃 / ✉️ )
ACCEPTANCE
- Silence
- Performance
Common Law Mailbox Rule:
ACCEPTANCE
-
Acceptance is effective when SENT
Example:
o If you mail Jon an acceptance on April 5, the acceptance is effective on April 5
Mailbox Rule Exception:
ACCEPTANCE
- If a Rejection is sent first, then an Acceptance is sent, whichever arrives first wins
UCC Acceptance:
ACCEPTANCE
- Acceptance is construed liberally
(substantial performance)
UCC Acceptance Exceptions
(kinda like battle of forms?)
ACCEPTANCE
- Material change the terms of contract
- Objection to the change of a term in a **reasonable amount of time **
- Offer limits the Acceptance
Consideration:
CONSIDERATION
Bargained-for Exchange
AdaptiTip
You will never have insufficient consideration because of . . . (finish the sentence; hint peeeeepercorn)
CONSIDERATION
You will never have insufficient consideration because of the amount, even a peppercorn is enough
Illusory Promise:
CONSIDERATION
- Party making the Offer retains control
Valid Consideration or Not
Gifts
CONSIDERATION
- Promise to give a gift is NOT valid Consideration
- Already given gift IS valid Consideration
Valid Consideration or Not
Past or Moral Consideration:
CONSIDERATION
- Past or Moral Consideration Is NOT valid Consideration
Valid Consideration or Not
Promise to pay debt barred by Statute of Limitations
CONSIDERATION
- Promise to pay debt barred by Statute of Limitations Is valid Consideration
Valid Consideration or Not
Promise to pay debt discharged by bankruptcy:
CONSIDERATION
Promise to pay debt discharged by bankruptcy Is valid Consideration
Valid Consideration or Not
Forbearance to sue:
CONSIDERATION
-
Promise not to sue
* Is valid Consideration
Promissory Estoppel:
CONSIDERATION
- Detrimental Reliance
Define Accord & Satisfaction
ACCORD & SATISFACTION
- accord and satisfaction (the parties agree to new or different
consideration)
From OneSheets b/c AB worksheets no tiene
When would a writing be construed against the drafter?
“Contra Proferentem” aka Canon of Construction
canon of construction known as contra proferentem-that a writing will be construed against the drafter-applies only as a last resort to address ambiguous language.
Pre-Existing Duty
A promise to perform (or the actual performance of) an existing legal duty has no value and is not consideration.
Exception to Pre-Existing Duty Rule - Additional Benefit
A promise not supported by consideration is enforceable when the promisee provides something in addition to what is already owed or varies their existing duty in some way.
Exception to Pre-Existing Duty Rule - Voidable Contract
A promise not supported by consideration is enforceable when the promisee promises to perform a voidable obligation.
Exception to Pre-Existing Duty Rule - Promise to a Third Party.
A promise not supported by consideration is enforceable when the promisee promises a third-party to periorm a pre-existing duty originally owed to a different person.
Exception to Pre-Existing Duty Rule - Honest Dispute
A promise not supported by consideration is enforceable when the scope of pre-existing duty owe is subject to an honest dispute.
Exception to Pre-Existing Duty Rule - Unanticipated Changed Circumstances*
Modification fair and equitable in view of circumstances not anticipated by the parties when the contract was made.
Exception to Pre-Existing Duty Rule - UCC Good Faith Modification
Under the UCC, a modification to a contract does not require consideration so long as the modification was made in good faith.
When does an illusory promise become binding?
An illusory promise can become binding if the illusory component goes away
(e.g., I retain a right to revoke until September 1 - the consideration is illusory until September 1 and then after September 1, it is no longer illusory and there is a binding contract so long as there was mutual assent.
