Contracts > II. Contract Formation > A. Offer; B. Termination of Offer; C. Acceptance Flashcards
What is the effect of the destruction of the subject matter of an offer prior to acceptance?
The offeree’s power of acceptance is terminated.
Can an offerree accept an offer even though the subject matter of that offer was destroyed?
No. The offerree’s ability to accept terminates by operation of law. The offerree therefore cannot sue for breach.
How does Article 2 account for the buyer’s traditional assumption of risk of destroyed goods after acceptance but prior to delivery?
Article 2 gives buyers a special property interest in goods as soon as they are identified as the ones that will be used to satisfy the contract (e.g., as soon as the seller sets them aside for the buyer). This special property interest is insurable, so that a buyer may obtain insurance for goods while they are being shipped to prevent loss in case of damage or destruction during shipment.
Is a written or verbal agreement a necessary predicate to the formation of a valid contract?
No. Only apparent mutual assent is required. An actual subjective meeting of the minds is not necessary.
How is apparent mutual assent determined?
Apparent mutual assent is necessary to form a contract. The parties must be in agreement to form the “same bargain at the same time.” Courts will determine this using an objective measure, by which each party is bound to the apparent intention that he manifested to the other(s)
In an auction without reserve, once the auctioneer calls for bids on an article or lot:
that article or lot cannot be withdrawn unless no bid is made within a reasonable time
In an auction with reserve, once the auctioneer calls for bids on an article or lot:
the auctioneer may withdraw the goods at any time until he announces completion of the sale.
When may a bidder retract his bid?
At any time until the auctioneer announces the sale is completed.
What is the effect of a retracted bid on the bid made previous to it?
There is no effect. That bid is not revived by the retraction.
For a real estate contract, a ________ is necessary; for a valid offer for a contract for the sale of goods, a ________ is necessary.
Price; quantity.
A valid offer for a real estate contract must include:
the price and a property description identifying land with some particularity (identity of the land), but a deed description is not required.
Is a deed description required for a real estate offer to be valid?
No.
Must an offer for a contract for the sale of goods include a price term to be considered valid?
No.
According to Article 2 and the majority of jurisdictions, if a price term is not included in a contract for sale of goods, what will a court do?
The court can find the contract enforceable and supply a reasonable price if the parties intended to enter the contract without settling on a price term.
What is the advantage of an option contract?
It limits an offeror’s power to terminate an offer.
What is an option contract?
An option contract is a distinct contract in which an offeree gives consideration for a promise by the offeror not to revoke an outstanding offer.
What is a bilateral contract?
A bilateral contract is formed when the offeree can choose to accept by making a promise or by starting performance.
What is a unilateral contract?
A unilateral contract can be accepted only by performance.
Unless clearly indicated otherwise, under Article 2 and the Restatement (Second) of Contracts, all offers are deemed to be what kind of contracts?
Bilateral.
What is the Merchant’s Firm Offer Rule of Article 2?
Under that rule, a promise to keep an offer open will be enforceable without the payment of consideration when a merchant offers to buy or sell goods in a signed writing that gives assurances that the contract will be held open for a specified period of time.
How does an option contract differ from the Merchant’s Firm Offer Rule?
An option contact is a special kind of contract and requires consideration in order for the promise not to revoke to be enforceable. The Merchant’s Firm Offer Rule applies only in certain circumstances related to the purchase and sale of goods and does not require consideration.
What is the Contracts acronym to remember. What does it stand for?
Armadillos From Texas Play Rap, Eating Tacos
I. Armadillos- Applicable law
II. From- contract Formation
III. Texas- Terms
IV. Play- seller’s Performance of a sale of goods contract
V. Rap- breach of contract Remedies
VI. Eating- things happening after the contract that Excuse performance
VII. Tacos- Third-party problems
