Contracts Set 2 Flashcards
Affect of Unilateral mistake of Contract
Affect of a unilateral mistake of K:
Where only 1 of the parties in a K is mistaken about facts relating to the K, this unilateral mistake will not prevent a contract unless the mistaken party is or had reason to be aware of the mistake made by the other party.
NOTE/Exam Tipe: If the question explicitely says that one party was unaware of the mistake, no matter how blatant or obvious thee mistake, then you have to assume the mistake is unilateral and so K is binding
Modification of Contract under UCC Between Merchants
Under UCC, btween Merchants, a promise to modify an existing K is enforceable even without consideration.
The only Requirement is the **proposal is made in GOOD FAITH. **
- A proposal to correct an error is one such allowable modification.
Delivery of Non-Conforming Goods
When Nonconforming goods are delivered, buyer has 2 choices:
1) Reject, cancel K, sue for damages OR
2) accept any Commercial Units, Reject the rest, sue for damages.
Acceptance of Goods
What constitutes an “acceptance” of goods?
Acceptance of goods is manifested in the following ways
1) Buyer accepts goods after reasonable opportunity to inspect them OR
2) fails to reject w/in a proper amount of time, OR
3) Does any act inconsistent w/ the Seller’s ownership of the goods.
When Acceptance of Offer contains added Terms, in UCC contracts….
• Which terms Governs the contract ?
(under UCC for goods)
A K is formed whenever it appears from the parties communications that they intended to enter a contract. Where acceptance contains added terms, Which terms govern?
• . If K is btwn Merchants, the added terms in the acceptance are included in the K. UNLESS
1) They materially alter K, or
2) Offer expressly limits acceptance to terms offered or
3) Offeror objects to w/in reasonable time.
• If K is not btwn Merchants, then K is formed around the terms of the offer.
Under UCC, when an Acceptance to an Offer contains added Terms – but offeror rejects the offeree’s added new terms • Which terms Governs the contract ?
Under UCC: Exception
If the offeror notifies the offeree w/in reasonable time after receiving the acceptance, that he objects to the New Terms, K is formed according to the terms of the original offer. This means, that K is formed w acceptance, and offeror controls whether terms are changeable.
Counter offer versus an Inquiry after an offer?
What is the affect of a counter offer on the original offer?
What is the affect of a inquiry on the original offer?
How do you determine if something is a counter offer or a mere inquiry?
A counter offer = rejection of an offer, thus revokes the offer.
Mere inquiry ≠ rejection of offer.
Test = Whether a reasonable person believe that offer was rejected?
Mail Box Rules for…
Acceptance
Revocation of an offer
Acceptance = affective upon dispatch.
Revocation affective upon receipt.
NOTE: receipt ≠ knowledge, but mere possession of a revocation = receipt.
What is the affect of Objective versus Subjective Impossibility to perform duty to a contract
A K duty is discharged from objective impossibility (no one could perform)
A K duty is NOT discharged from subjective impossibility
Who Bears the Risk of Loss if…
Contract does not specify a delivery location?
Exception (for defects) ?
If K authorizes seller to ship by carrier – BUT does not EXPLICITLY req seller to deliver to a particular location, then…
- Risk of loss goes to Buyer
- But, If goods shipped are so defective that Buyer has right to reject shipment, then Risk of Loss stays with Seller until defects are cured or buyer accepts goods.
Option Contracts:
When/how can an Offeror revoke an offer?
Offer can revoke an offer at any time unless…
1) Consideration was paid to keep the offer open,
2) The offeree reasonably+foreseeably relies on offer to his detriment
3) The offer is a MERCHANTS FIRM offer (Merchant is someone who engages in these goods)
