Contracts - Formation

Question 1

Offer

Answer 1

An objective manifestation by the offeror of a willingness to enter into a bargain creating the power of acceptance in the offeree. Offeror is the master of the bargain.

Question 2

Acceptance

Answer 2

An objective manifestation by the offeree to be bound by the terms of the offer.

Question 3

Termination of an offer

Answer 3

1) death of the offeror
2) revocation (comes from offeror)
3) rejection (comes from offeree)
4) counteroffer (comes from offeree)
5) lapse of time (face to face conversation rule - alive for the short duration)

Question 4

Rejection v “Mere” Inquiry

Answer 4

Rejection terminates the offeree’s power of acceptance. Mere inquiry does not terminate the offeree’s power of acceptance. Offeror can renew offer in the face of a rejection.

Question 5

UCC 206-6: Non-Conforming Goods

Answer 5

If non-conforming goods are shipped, the shipment serves as an acceptance and at the same time a breach.

Question 6

Unilateral K

Answer 6

Offeror makes an offer that calls for performance. Looking for action.

Question 7

Bilateral K

Answer 7

Offeror and offeree exchange mutual promises. Looking for promise.

Question 8

UCC 2-205: Firm Offer Rule

Answer 8

A signed writing by a merchant which by its terms gives assurances that it will be held open is not revocable for lack of consideration for the stated period of time not to exceed 3 months.

Question 9

Consideration

Answer 9

Bargained for legal detriment

Question 10

Modification

Answer 10

A subsequent agreement that alters or changes the parties’ duties and obligations under the terms of their original contract.
UCC: good faith, no consideration required
Common Law: pre-existing duty rule, new consideration required

Question 11

Pre-Existing Duty Rule

Answer 11

Performance of an act by which a party is already contractually bound to perform does not constitute valid consideration for a new promise.