Contracts (UBE-MEE Essay Priority)

Question 1

Which law applies in sales of goods v. everything else?

Answer 1

UCC applies to sales of goods and common law to everything else

Question 2

Mixed goods and services law

Answer 2

Whichever is the predominant purpose is the law that applies

Question 3

What are the three essential elements of a contract?

Answer 3

Offer, acceptance, and consideration

Question 4

Offer Creation Requirements

Answer 4

1) intent to enter into a contract
2) specific terms (price, quantity) but always identity of parties and subject matter
3) must be communicated to the offeree

Question 5

Key Terms required for Land, Goods,

Answer 5

Land – identify the land and price terms

Goods – quantity unless requirement/output contract

Question 6

Requirement for Employment K Offer

Answer 6

Duration (if not specified it is at will)

Nature of the work

Question 7

Requirements/Output Contracts

Answer 7

K to purchase all that you require from one seller or a k to purchase all of the output from a producer so long as it is in good faith and not an

Question 8

What terminates an offer

Answer 8

Lapse of time (either based on time stated in offer or reasonable time based on content/subject)

Reject – express

Counteroffer

Revocation

Death/incapacity

supervening illegality

Question 9

Counteroffer Termination

Answer 9

Counteroffers act as rejection

Common law: acceptance must mirror exactly or is a counteroffer

UCC:
if between merchants – new or additional do not terminate and become part of contract if they are not timely rejected, K is conditional on them, or materially alter

between nonmerchant and merchant - new is a proposed addition

Question 10

Distinguish mere inquiries from counteroffers

Answer 10

Reasonable person test of would you believe the original had been rejected

A mere inquiry is something like “would you consider lowering price” v. counter “I’ll do $5000 not $6000.”

Question 11

When is a rejection effective?

Answer 11

When received by offeror

Question 12

Counteroffering an Option Contract

Answer 12

Counteroffers do not constitute a termination of the offer. Can still accept unless the offeree detrimentally relied on the offeree’s rejection

Question 13

When is a revocation effective?

Answer 13

When it is received by the offeree. If it is by publication, it is when published and the offeree doesn’t need to have actually read it

Question 14

Indirect Revocation

Answer 14

When the offeree receives
1) correct information
2) from a reliable source
3) acts of offeror would indicate to a reasonable person that the offeror no longer wishes to make the offer

Question 15

When may an offer be revoked, and which types of offers are not revocable?

Answer 15

Revoked at any time before acceptance through unambiguous words/conduct indicating unwillingness/inability to contract

Irrevocable offers include: option ks, merchant’s firm offer, beginning performance for unilateral contracts, and offers that were relied on t the offeree’s detriment

Question 16

What is a merchant’s firm offer?

Answer 16

Offer to buy or sell goods by a merchant that is in a signed writing and that states the offer to buy or sell is open and not recoverable and the offer to keep open is signed separately – letterhead sufficient

No consideration required

Question 17

Mirror Image Rule

Answer 17

Acceptance must excatly mirror the offer (Common law)

Question 18

UCC Exception to the Mirror Image Rule

Answer 18

Acceptance DOES NOT need to mirror the offer and additional terms may be added.

They are included if

1) both parties are merchants
2) term is not a material change
3) offer doesn’t limit acceptance to the exact terms AND
4) no objection was made within a reasonable time

Question 19

When are agreements indefinite and what is the result?

Answer 19

When the terms are not reasonably certain for a court to determine what constitutes a breach and the result is an unenforceable agreement

Question 20

What is consideration?

Answer 20

A bargained for exchange of a promise for a return promise or performance

Question 21

Is past consideration valid consideration?

Answer 21

Generally no. There may be an exception if there’s a material benefit

Question 22

Material Benefit Rule

Answer 22

A promise made in recognition of a benefit previously received by the proisor from the promise is binding even without consideration, to the extent it is necessary to prevent injustice

Example – providing emergency services or necessities