Contracts & Sales Flashcards
How may a contract be formed?
In “any manner sufficient to show agreement, including conduct by both parties which recognizes the existence of such a contract.” UCC § 2-204(1).
When is a contract an express contract?
When words express the intent of the parties
When is a contract considered implied in fact?
When conduct indicates assent or agreement
What is an offer?
An objective manifestation of a willingness by the offeror to enter into an agreement that creates the power of acceptance in the offeree. In other words, it is a communication that gives power to the recipient to conclude a contract by acceptance.
What is the primary test of whether a communication is an offer?
The primary test is based on the objective theory of contracts and is whether an individual receiving the communication would believe that he could enter into an enforceable deal by satisfying the condition.
How can an offer be terminated?
Lapse of time in offer, death or mental incapacity, destruction or illegality, revocation…
When is an offer revoked?
When the offeror makes a manifestation of an intention not to enter into the proposed contract. Restatement (Second) of Contracts § 42. A revocation may be made in any reasonable manner and by any reasonable means, and it is not effective until communicated. A revocation sent by mail is not effective until received.
At common law, when is a written revocation/rejection/acceptance received?
When it comes into the possession of the person addressed or the person authorized to receive it on his behalf, or when it is deposited in some place he has authorized for deposit for this or similar communications. Restatement (Second) of Contracts § 68.
Under the UCC, when does a person receive notice?
When (i) it comes to that person’s attention or (ii) it is duly delivered in a reasonable form at the place of business or where held out as the place for receipt of such communications. Receipt by an organization occurs at the time it is brought to the attention of the individual conducting the transaction or at the time it would have been brought to that individual’s attention were due diligence exercised by the organization. UCC §1-202.
How is an offeror’s power to revoke limited?
Option, UCC firm offer rule, promissory estoppel, or partial performance
What is an option?
An independent promise to keep an offer open for a specified period of time.
What is the UCC firm offer rule?
Under the UCC, an offer to buy or sell goods is irrevocable if: (i) The offeror is a merchant; (ii) There is an assurance that the offer is to remain open; and (iii) The assurance is contained in a signed writing from the offeror. No consideration by the offeree is needed to keep the offer open under this rule. UCC § 2-205.
Define merchant.
A merchant includes not only a person who regularly deals in the type of goods involved in the transaction or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices of goods involved in the transaction, but also any businessperson when the transaction is of a commercial nature. UCC § 2-104(1) cmt. 2.
When can promissory estoppel make an offer irrevocable?
When the offeree reasonably and detrimentally relies on the offeror’s promise prior to acceptance.
What is a general offer?
An offer made to a large number of people, generally through an advertisement. It can be revoked only by notice that is given at least the same level of publicity as the offer.
