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Contracts > Contracts I > Flashcards

Contracts I Flashcards

1
Q

Consideration requires…

A

Consideration requires bargained-for-exchange, legal sufficiency, and determinability.

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2
Q

A valid contract requires…

A

A valid contract requires mutual assent (offer and acceptance), consideration, and an absence of defenses to formation.

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3
Q

What are “Goods”?

A

Goods are tangible and moveable. UCC is the controlling law.

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4
Q

A valid offer requires…

A

A valid offer requires the intent to form a contract, all required terms stated with sufficient definiteness, and communication to an identifiable offeree.

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5
Q

Required terms (UCC)

A

Under the UCC, the required terms for a valid offer are the parties, subject matter, and quantity. Price is not required.

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6
Q

Required terms (Common Law)

A

Under the common law, the required terms for a valid offer are the parties, subject matter, quantity, and price.

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7
Q

An acceptance requires….

A

An effective acceptance requires the intent to form a contract, agreement to the terms offered, and communication to the offeror.

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8
Q

Who is a Merchant (UCC)?

A

Regularly deals in goods of the kind sold, who otherwise by occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved, hired an agent that is a merchant {VERIFY}

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9
Q

Bilateral Contracts are accepted…

A

Bilateral Contracts are accepted by promise or start of performance.

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10
Q

Unilateral Contracts are accepted…

A

Unilateral Contracts are accepted by performance.

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11
Q

Bilateral Contracts are an exchange…

A

Bilateral Contracts are an exchange of mutual promises.

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12
Q

Void contract

A

Is one that is totally without any legal effect from the beginning, and cannot be enforced by either party.

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13
Q

Voidable contract

A

Is one that one or both parties may elect to avoid.

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14
Q

Unenforceable contract

A

Is one that is otherwise valid, but which may not be enforceable due to various defenses extraneous to contract formation, such as state of limitations or Statute of Frauds.

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15
Q

Mutual assent requires…

A

Mutual assent is an agreement between the parties consisting of an offer and acceptance.

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16
Q

A counter-offer is…

A

A counter-offer is a rejection of the offer and is a new offer.

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17
Q

A mere inquiry is…

A

Not a rejection, the offeree is still keeping the original proposal under consideration. Test: Would a reasonable person believe that offer was rejected?

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18
Q

Intent to form a contract…

A

Intent to form a contract is the expression of a promise to do or refrain from doing some specified thing in the future, conditioned on the other party’s acceptance.

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19
Q

Advertisements are generally…

A

Advertisements are generally mere invitations for offers.

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20
Q

“Requirement” contracts…

A

A buyer promises to buy from a certain seller all of the goods the buyer requires, and the seller agrees to sell that amount to the buyer.

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21
Q

“Output” contracts…

A

A seller promises to sell to a certain buyer all of the goods the seller produces, and the buyer agrees to buy that amount from the seller.

22
Q

Gap Filler for Price…

A

Under Article 2, the price will be a reasonable price at the time of delivery if 1) nothing is said as to price, 2) the price is left to be agreed to by the parties and they fail to agree, or 3) the price is to be fixed by some external factor or third party and is not so set.

23
Q

Gap Filler for Time…

A

If agreement does not specify the time in which an act is to be performed, the law implies that it is to be performed within a reasonable time.

24
Q

Awareness of offer to accept…

A

The offeree must have knowledge of the offer.

25
Q

Revocation is generally effective…

A

A revocation is generally effective when received by the offeree..

26
Q

Merchant’s Firm Offer (UCC)

A

Under Article 2, if a merchant offers to buy or sell goods in a signed writing, and gives assurances that it will be held open, the offer is not revocable.

During the time stated, or if no time is stated for a reasonable time (never allowed to exceed 90 days).

27
Q

Promissory Estoppel (Detrimental reliance)

A

Where 1) the offeror could reasonably expect that the offeree would rely to their detriment on the offer, 2) the offeree does rely, and 3) the offeree does suffer a detriment. {VERIFY}

The offer is held irrevocable as an option contract for a reasonable length of time.

28
Q

A unilateral contract becomes irrevocable once…

A

A unilateral contract becomes irrevocable once performance has begun. The offeree is given a reasonable time to complete performance. The offeree is not bound to complete performance.

29
Q

Preparations to perform under unilateral contract…

A

Offeror’s power to revoke an offer only once performance has begun. Preparations to perform do not apply, however, there may be detrimental reliance.

30
Q

A rejection is effective when…

A

A rejection is effective when received by the offeror.

31
Q

Termination of an offer by operation of law…

A

If either of the parties die, or is adjudicated insane prior to acceptance, the offer is terminated. Destruction of the subject matter terminates the offeree’s power of acceptance. If the subject matter of the proposed contract becomes illegal, the offer will terminate.

32
Q

Silence as acceptance

A

If the offeree silently takes offered benefits, the courts will often find an acceptance. Especially true if prior dealings between parties, or trade practices known to both, create a commercially reasonable expectation by the offeror that silence represents an acceptance.

33
Q

Method of acceptance

A

Unless otherwise provided, an offer is construed as inviting acceptance in any reasonable manner and by any medium reasonable under the circumstances.

34
Q

Offers to Buy Goods for Current or Prompt Shipment (UCC)

A

May be accepted by either a promise to ship or by a shipment of conforming or nonconforming goods.

35
Q

Shipment of Nonconforming Goods

A

Is an acceptance creating a bilateral contract as well as a breach of the contract unless the seller seasonably notifies the buyer that a shipment of nonconforming goods is offered only as an accommodation. The buyer is not required to accept accommodation goods and may reject them. If he does, the shipper is not in breach and may reclaim the accommodation goods, because her tender does not constitute an acceptance of the buyer’s original offer.

36
Q

Mirror Image Not Required (UCC)

A

The proposal of additional or different terms by the offeree in a definite and timely acceptance does not constitute a rejection and counteroffer, but rather is effect as an acceptance, unless the acceptance is expressly made conditional on assent to the additional or different terms.

37
Q

Contracts Involving a Nonmerchant with Additional or Different Terms in Acceptance

A

If a party to the contract is not a merchant, the additional or different terms are considered to be mere proposals to modify the contract that do not become part of the contract unless the offeror expressly agrees.

38
Q

Contracts Between Merchants with Additional or Different Terms in Acceptance

A

If both parties to the contract are merchants, additional terms in the acceptance will be included in the contract unless 1) the materially alter the original terms of the offer, 2) the offer expressly limits acceptance to the terms of the offer, or 3) The offeror has already objected to the particular terms, or objects within a reasonable time after the notice of them is received.

39
Q

“Knockout rule” for Additional or Different Terms in Acceptance

A

Many courts follow the “knockout rule”, under which conflicting terms in the offer and acceptance are knocked out of the contract because each party is assumed to object to the inclusion of such terms in the contract. Gaps left by knocked-out terms are filled by the UCC. Differences between price, quantity, or quality indicate there is no mutual assent and thus there is no contract.

40
Q

Mailbox Rule - Acceptance

A

Acceptance by mail is effective at the moment of dispatch, provided that the mail is properly addressed and stamped. Unless 1) the offer stipulates that acceptance is not effect until received, or 2) an option contract is involved (effective only upon receipt).

41
Q

Mailbox Rule - Acceptance before Revocation

A

Revocation is effective only upon receipt, if offeree dispatches an acceptance before he receives a revocation sent by the offeror, the acceptance is effective for forming a contract.

42
Q

Mailbox Rule - Offeree Sends Rejection, then Acceptance

A

Mailbox rule does not apply. Whichever one is received first is effective.

43
Q

Mailbox Rule - Offeree Sends Acceptance, then Rejection

A

Mailbox rule generally applies, that the acceptance is effective upon dispatch. However, if the offeror received the reject first and changes his position in reliance on it, the offeree will be estopped from enforcing the contract.

44
Q

Auction - When Sale is Complete

A

When the auctioneer so announces by the fall of the hammer, or in another customary manner. Where a bid is made while the hammer is failing in acceptance of a prior bid, the auctioneer may, in his discretion, reopen the bidding or declare the goods sold under the bid on which the hammer was falling.

45
Q

Bargained-for-example consider of legal value…

A

It must constitute a benefit to the promisor or a detriment to the promisee. A’s promise induced a detriment in B, B’s detriment induced A to make the promise.

46
Q

Past consideration…

A

General rule - Past consideration will not satisfy the bargained-for-exchange requirement. (Exceptions - Debt Barred by a Technical Defense, Promise to Pay arising out of past material benefit).

47
Q

Pre-existing legal duty…

A

An existing legal duty is not consideration.

48
Q

Conditional promises are enforceable…

A

Conditional promises are enforceable, unless the “condition” is entirely within the promisor’s control (“only if I decide to” or “only if I feel like it”)

49
Q

Promise Conditioned on Satisfaction

A

A promise conditioned on the promisor’s satisfaction is not illusory because the promisor is constrained by good faith, and a reasonable person standard.

50
Q

Right to Cancel or Withdraw

A

Unqualified right to cancel or withdraw at any time may be an illusory promise, the consideration is valid if this right is in any way restricted (right to cancel upon 60 day’s notice).

51
Q

Promissory Estoppel or Detrimental Reliance

A

1) the promisor should reasonably expect to induce action or forbearance and 2) such action or forbearance is in fact induced.

Some jurisdictions - Expectation damages (i.e. what was promised under the contract)

Some jurisdictions - Reliance damages (i.e. whatever the promisee spent in reliance on the promise)

52
Q
A

Contracts (1 decks)

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