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Contracts - Bar Prep > Contracts and Sales > Flashcards

Contracts and Sales Flashcards

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1
Q

What are the sources of contract law?

A

Common law - Default law UCC - Uniform Commercial Code

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2
Q

What does the common law govern?

A

It is the default law that governs contractual relations.

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3
Q

What are the requirements for a valid contract?

A

​

  1. offer and acceptance
  2. consideration
  3. legal capacity of the parties
  4. a legal objective
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4
Q

What does the UCC govern?

A

Governs contracts for the sale of all goods

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5
Q

What are sales?

A

Transactions in which a seller transfers title of goods to a buyer for value (Not leases or bailments)

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6
Q

What are goods

A

Any movable item (personal goods)

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7
Q

Examples of goods

A

Growing crops Uncut timber Unborn animals

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8
Q

What is not a good?

A

Intangibles Money Assignment of a legal claim Services (i.e. - construction or employment) Real Property

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9
Q

What is a Hybrid Cases?

A

There is both a sale of goods and a service

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10
Q

What rule do you apply in hybrid cases?

A

Majority - Determine the predominant purpose of the transaction Minority - Apply the UCC to the goods part & common law to the service part

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11
Q

What are the predominant purpose test factors?

A
  1. The Language of the K 2. Nature of the supplier’s/seller’s business 3. Relative value of the goods vs. the cost of the service
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12
Q

What is the rule for computer software?

A

Majority - treated as goods under the UCC

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13
Q

Common Law vs. UCC

A

Common law applies unless the UCC provides contrary provisions

Common law fills in the gaps

  • i.e. - Defenses like fraud, duress & incapacity

UCC sometimes displaces the common law

  • i.e. - firm offers & the battle of the form rules
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14
Q

What are the general categories of contractual obligations?

A

a

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15
Q

What is an express contract?

A

The parties make an oral or written expressions of their commitment

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16
Q

What is an implied-in-fact contract?

A
  • The parties’ conduct rather than their words form the agreement
  • Or when they fail to express the agreement in its entirity
    • i.e. - leaving out price and putting in “reasonable value”
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17
Q

What is an implied-in-law Contract?

A

One pty bestows a benefit on another & it is unjust for them to retain the benefit w/o paying

(arises where there would be an equitable imposition of a would be K.)

a.k.a. – quasi-contract or a restitutionary obligation

other pty entitled to the fair value of the services rendered

Example - emergency services

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18
Q

What is Quantum Meruit?

A

It is the cause of action brougt for an implied-in-fact K in order to recover the reasonable value of the benefit involved

means of enforcing an implied-in-fact & an implied-in-law contract

“what the thing is worth:

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19
Q

What rules require a signed writing?

A

spme contracts under both the UCC and the common law

merchant’s firm offer SOF

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20
Q

What is the electronic signed writing requirement?

A

Electronic sig’s usually considered a signing in the vast part of the US. An email, etc. satisfies a writing

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21
Q

What constitutes an offer?

A

A party’s communication must meet two requirements:

  1. An outward manifestation AND
  2. A signal that acceptance will conclude the deal
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22
Q

What is an outward mainfestation?

A

Oral, written or made by conduct

Note: Inward thoughts/subjective intentions are irrelevant unless reasonably apparent to the other pty

23
Q

What are communications that do not constitute an offer?

A

Preliminary negotiations

Invitations for an offer

24
Q

What are situations of multiple offers?

A

CAR

Commercial Advertisements

Auctions

Rewards

25
Q

What is the offer rule for commercial advertisements?

Are commercial advertisements considered to be offers?

A

No, ads, catalog s and price lists are invitations for offers b/c the responses may exceed the available supply

26
Q

Exception to commercial advertisement?

A

When the language identifies who gets the limited supply even if there is an excess demand

27
Q

What is the offer rule for rewards?

A

Generally: Yes they are offers b/c they promise a bounty in exchange for a specialized task

28
Q

What are two types of reward offers?

A

Self-limiting rewards

Open-field rewards

29
Q

What is a self-limiting reward?

A

Offers that indicate that the task can only be performed once

i.e. - “Will pay $100 for finding my lost dog.”

30
Q

What is an open-field reward?

A

Offers that indicate that the tasks to be performed can be performed by multiple people

Exception: Language that specifies a limitation on how many can accept the offer

31
Q

What is the rule for auctions in regards to offers?

A

General: The auctioneer is inviting offers & the responsive bid is the offer

Exception: If the auction is w/o reserve, the auctioneer is making the offer to the highest bidder

32
Q

What is the legal effect of an offer?

A

It creates the power of acceptance

33
Q

How can an offer be revoked?

A

Lapse of time

Death of incapacity of either pty

Revocation by the offeror

Rejection by the offeree

34
Q

When does an offer terminate by lapse of time?

A

The time specified in the offer

If no time stated, then w/in a reasonable time

35
Q

What factors determine a reasonable lapse of time for an offer?

A

Subject matter & market conditions

Degree of urgency & means of transmission

36
Q

What is the face-to-face conversation rule?

A

An offer made in a face-to-face conversation generally lapses @ the end of the conversation unless specified.

37
Q

Offer: Death of Incapacity by Either Pty

A

Dead men cannot accept offers thus terminated

Either incapacitated terminates the offer

38
Q

Termination of an Offer by Offeror’s Revocation

A

An offeror can terminate his offer @ anytime and for any reason even if promise to hold open so long as:

Done before the offer is accepted AND

Is effectively communicated to the offeree

39
Q

How is a revoked offer communicated to the offeree?

A

Direct revocation

Indirect revocation

40
Q

What is direct revocation of an offer?

A

There is a direct communication of the intent to w/draw the offer

41
Q

What is an indirect revocation of an offer?

A

The offeror takes some action that is inconsistent w/his intention to go through w/the offer AND

The offeree learns of it through a reliable source

42
Q

How to revoke an offer made to multiple offerees?

A

By revoking through the functional equivalent (the same manner in which the offer was made)

EXCEPTION: Unless there is a better means of communicating the revocation

Note: This terminates the power of acceptance even if the offeree is unaware of the revocation

43
Q

How can you prevent revocation of an offer?

A

American rule of free revocability allowed the offeror to revoke at anythime even if he expressly said he would hold it open

Contemporary rule allows two ways:

  • Common law Option contract or
  • UCC firm offer
44
Q

What elements are required for an enforceable option contract?

A
  1. An offer
  2. A subsidiary promise to keep the offer open (“sell by” date may not constitute as such a promise) AND
  3. Some valid mechanism for securing enforcement of the promise (i.e. – consideration[most common]) [performance or promise of performance]
45
Q

What problems arise with option contracts?

A
  1. False Recital in signed writing
    • Where there is a signed writing w/a false recital of consideration (i.e. - paragraph 4 syays “$100 was paid in consideration..”
      • Majority Rule - it is rebuttal
      • Minority Rule - option K will be enforced even if the recital for the option is false
  2. Promissory Estoppel
    • Courts will sometimes enforce a subsidary promise to keep an offer open if there has been detrimental reliance
46
Q

What is the rule for construction contracts?

A

Majority: When a general contractor uses a subcontractor’s bid to secure his own, an implied K is created which prevents the subcontractor from revoking the bid.

47
Q

What is a firm offer (UCC)?

A

It is an irrevocable offer that does not to be supported by consideration

must meet three requirements

48
Q

How do you revoke an offer by means of the UCC firm offer

A

a merchant can make a firm offer to buy/sell goods w/o consideration if:

  1. offer made by a merchant to buy/sell
  2. offer made in writing & signed by the merchant
  3. offer states by its terms that it will expressly be held open

this makes it irrevocable for a set period

49
Q

How long is a firm offer held open for?

A

It is open for the time stated in the offer or for a reasonable time if not stated,

Reasonable time - no more than 3 months

  • Three Month Rule - only irrevocable for the first 3 months if it is more than that time
  • if longer than 3 months than will need consideration to become an option contract
50
Q

In what ways can an offeree reject an offer?

A
  1. an outright reject
  2. a counteroffer
    • rejects the current offer an creates a new offer
    • NOTE - mere inquires are not rejections
  3. rejection by non-conforming acceptance
    • Common law - mirror image rule
      • acceptance must mirror the terms or else it asks as a counteroffer
51
Q

How to revive an offer after reject or lapse?

A

The offeror can revive a terminated offer by their language or conduct restating the offer or give more thime to decide

52
Q
A
53
Q
A

Contracts - Bar Prep (10 decks)

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