Contracts and Sales Flashcards
formation of contracts
binding K requires: (i) manifestation of mutual assent; (ii) consideration; and (iii) lack of valid defenses
offer
objective manifestation of a willingness by offeror to enter into agreement that creates power of acceptance in offeree
intent (offer)
a statement is only an offer if:
- person to whom it is communicated could reasonably interpret it as an offer
- expresses present intent of a person to be legally bound by a K
knowledge (offer)
offeree must know of the offer in order to have the power to accept
terms of offer
must be certain and definite or K fails for indefiniteness
- common law: essential terms (parties, subject matter, price, quantity) must be covered in K; if the parties intended to create a K, the court may supply missing terms
- UCC: only essential term is quantity; K formed if both parties intend to K and reasonably certain basis for giving remedy
– exception: requirements or output Ks (UCC implies “good faith”)
– UCC “fills the gap” if other terms are missing
language (offer)
offer must contain words of promise, undertaking, or commitment, and be targeted to a number of people who could actually accept
bilateral contract
if a return promise is requested
unilateral contract
if an act is requested
invitation to deal
advertisements are only an invitation to receive offers (but may qualify as an offer if sufficiently specific and limit who can accept or if associated with a stated reward)
ways to terminate an offer
- lapse of time
- death/mental incapacity
- destruction/illegality
- revocation
- rejection
lapse of time
specified termination date or reasonable period of time if none state
death/mental incapacity (effect on offer)
offer terminates, even if offeree does not learn of offeror’s death until after the offeree has sent what he believes is an acceptance
exception: offers for option Ks do not terminate because consideration was paid to keep the offer open
revocation
offer can be revoked at any time prior to acceptance (even if it states it will be open for specific amount of time)
- not effective until communicated
- revocation sent by mail not effective until received
option contract
offeree must generally give consideration for option to be enforceable
UCC firm offer rule
offer irrevocable (for reasonable time no more than three months) if offeror is a merchant (or any business person), and assurances (in authenticated writing) are made that offer will remain open
no consideration needed to keep offer open
promissory estoppel
if offeree reasonably and detrimentally relies on offer it may become irrevocable
partial performance
for all Ks, offeree must have knowledge of offer when performance begins
unilateral K: offeror cannot revoke once offeree has begun performance
bilateral K: commencement of performance operates as promise to render complete performance
rejection by offeree
offeree clearly conveys to offeror that he no longer intends to accept the offer; rejection usually effective upon receipt
counteroffer
acts as rejection of original offer and creates new offer
acceptance
objective manifestation by the offeree to be bound by the terms of the offer
acceptance of bilateral k
exchange of promises that render both enforceable
acceptance of unilateral k
promise to do something by one party in return for an act of the other party
starting to perform is not enough, but it will make offer irrevocable for a reasonable period of time to complete performance
offeree must be aware of offer before acting
means of acceptance
unless offeror specifies, offeree can accept in any reasonable manner/means
silence (acceptance)
not acceptance unless offeree has reason to believe offer could be accepted by silence or previous dealings make it reasonable to believe that offeree must notify offeror if he does not intend to accept
