Contracts (Offer and Consideration)

Question 1

Offer

Answer 1

requires an outward manifestation that signals that acceptance will conclude the deal

Question 2

Ways to Revoke Offer

Answer 2

(1) lapse of time;
(2) death or incapacity of a party;
(3) revocation by the offeror; or
(4) rejection by the offeree

Question 3

Revocation of Construction Offer

Answer 3

The majority rule is that where a general contractor uses a particular subcontractor’s bid to formulate his own, an implied contract is created via promissory estoppel. This prevents the subcontractor from revoking the bid.

Question 4

Unilateral Contract

Answer 4

An offer seeking performance in return

Question 5

Revocation of Unilateral Contract

Answer 5

Once the offeree begins performance, an option contract is created and the offeror may not revoke
* In NY, an offer may be revoked any time before completion of the offeree’s performance.

Question 6

Bilateral Contract

Answer 6

Offeror and offeree exchange mutual promises (offeror is seeking a promise in return)

Question 7

Acceptance (Common Law)

Answer 7

Requires that the acceptance

(1) be known by the offeree,
(2) mirror the terms of the offer and
(3) be communicated to the offeror

Question 8

Acceptance (UCC)

Answer 8

Shipment of non-conforming goods and battle of forms are used. Mirror image rule is not required.

Question 9

Shipment of Nonconforming Goods

Answer 9

Under the UCC, a seller can ACCEPT a buyer’s offer to purchase goods by:

(1) a promise to ship conforming goods;
(2) a prompt shipment of conforming goods; or
(3) shipment of nonconforming goods

Question 10

Battle of the Forms

Answer 10

A so-called battle of the forms occurs when a buyer places an order (the offer) and the seller’s acceptance form contains additional or different terms

Question 11

Additional Terms

Answer 11

In a transaction between merchants, those terms which address an issue or topic not addressed in the original offer.
They become part of the contract unless they materially alter the contract or unless the offer expressly precludes additional terms.

Question 12

Different Terms

Answer 12

In a transaction between merchants, those terms which address the same topic in a different manner.

Question 13

Consideration

Answer 13

A promise must be exchanged for something else of value. A bargained-for exchange or a quid pro quo is required for consideration.

Question 14

Two basic elements of Consideration

Answer 14

(1) Legal detriment, and
(2) Bargained-for exchange
* In NY, consideration consists of either a benefit to the promisor or a detriment to the promisee.

Question 15

Insufficient Consideration

Answer 15

When the promise is not supported by any form of consideration.
Often uses terms like want of, not supported, or legally insufficient.

Question 16

Failure of Consideration

Answer 16

When the party has not performed in accordance with his promise.

Question 17

Adequacy of Consideration

Answer 17

The value of the consideration is irrelevant for purposes of determining if there is consideration.

Question 18

Illusory Promise

Answer 18

A promise to perform that leaves the performance to the discretion of the promising party. Not consideration.

Question 19

Gratuitous Promise

Answer 19

Does not constitute consideration

Question 20

Promissory Estoppel (Definition)

Answer 20

A promisee who reasonably relies to his detriment on a gratuitous promise may be able to enforce that promise. Promissory estoppel allows the enforcement of promises even where there is no consideration.

Question 21

Promissory Estoppel (Elements)

Answer 21

(1) Promise
(2) Foreseeable Reliance
(3) Actual Reliance, and
(4) An injustice occurs without enforcement

Question 22

Statute of Frauds (Definition)

Answer 22

The statute of Frauds provides an important exclusion to the general rule that a contract need not be in writing.
Under the SoF, for a contract to be enforceable, the contract must be evidenced by a writing, signed by the party against whom enforcement is sought.

Question 23

Statute of Frauds (Categories)

Answer 23

MYLEGS: Contracts …

(1) Upon consideration of marriage,
(2) Not to be completed within one year from the formation of the contract,
(3) For the sale of land,
(4) Of an executor for a duty of the decedent,
(5) Of guarantee/suretyship
(6) For the sale of goods and $500 or more.

Question 24

Main purpose Rule

Answer 24

Where the primary purpose of a guarantor’s promise is to protect or promote his own economic interests (not the debtor’s), then the agreement is not within the Statute of Frauds (i.e., no signed writing needed).

Question 25

Sale of Goods

Answer 25

Governed by UCC 2-201. To satisfy the UCC SoF, the writing must also include a quantity term.
Also, the SoF may be satisfied when two merchants enter an oral agreement, and one then sends a written confirmation.