formation Flashcards
offer
objective manifestation of present intent to contract; terms must be sufficient to allow a court to enforce the k
UCC offers
quantity must be certain or capable of being made certain; missing terms ok (particularly price) if parties clearly intended to make a K and there is a reasonably certain basis for giving a remedy
ways to terminate an offer
1) revocation by offeror
2) rejection by offeree
3) lapse of time
4) death
5) destruction of proposed k’s subject matter
6) supervening illegality
methods of revocation
1) unambiguous statement by offeror to offeree
2) offeree becomes aware of offeror’s unambiguous conduct or statement indicating an unwillingness or inability to contract
irrevocable offers
1) option contract
2) UCC firm offers
3) detrimental reliance by offeree
ways to reject offer
1) express rejection
2) counteroffer
3) conditional acceptance
4) acceptance with additional terms
when acceptance
arises upon offeree’s clear expression of assent to the terms of the offer; offeror controls method of acceptance
mirror image rule
common law; acceptance must mirror offer’s terms and can’t add/omit/change terms
UCC acceptance with additional terms
if both parties are merchants, K is formed with additional terms unless terms materially change the offer, offer expressly limits acceptance to the offer’s terms,or offeror objects within a reasonable time
acceptance by shipment
UCC
merchant may accept an offer to buy goods by either providing a promise to ship goods or promptly shipping conforming goods
mailbox rule
acceptance is effective upon dispatch; offers, rejections, and counteroffers effective upon receipt
acceptance by performance
unilateral Ks = complete performance required
bilateral Ks = partial performance gives rise to acceptance
consideration
bargained-for exchange of legal value b/t parties; must be a benefit to promisor or detriment to promisee
invalid consideration
1) promises of gifts or conditional gifts
2) illusory promises
illusory promise
a promise where there is no obligation to perform (e.g., A promises to do B’s chores if he has time)
promissory estoppel
courts may enforce a promise if:
1) promisor reasonably expects reliance
2) promisee acts/refrains from acting in detrimental reliance
3) injustice will occur without enforcement
defenses to formation
1) mistake
2) misunderstanding
3) fraud
4) duress
5) unconscionability
6) illegality
incapacity
infants and mentally incompetent persons lack capacity to contract; person who lacked capacity may disaffirm the K
ways to satisfy Statute of Frauds
1) signed writing
2) performance
UCC Statute of Frauds signed writing exception
signed writing not required if:
1) both parties are merchants
2) party asserting SoF defense received a signed writing memorializing the agreement and essential terms and failed to respond w/in 10 days of receipt
contracts within SoF
MYLEGS
1) Marriage
2) service Ks incapable of being performed within one Year
3) Land
4) Executor promises
5) sale of Goods $500 or more
6) Suretyship
illegality
illegal subject matter or purpose for K
if illegal subject matter, K not enforceable; if legal subject matter but illegal purpose, K only enforceable by party who didn’t know about illegal purpose
misrepresentation (fraud)
false assertions, concealment, or misstatements about a material fact before K formation or performance; K is voidable if a party detrimentally relies on the misrepresentation
undue influence
K entered into under excessive pressure by someone unduly susceptible to pressure is voidable
duress
wrongful act/threat that overcomes a party’s free will
physical duress = void
non-physical = voidable by coerced party
unconscionability
courts may refuse to enforce all/part of a K that is unfair or oppressive to one party based on bargaining/terms
misunderstanding
neither party aware = no K formed unless both intended same meaning
one party aware = K formed; enforced according to intention of unaware party
both parties aware = no K formed unless both parties intended same meaning
mutual mistake
K is voidable by an adversely affected party if:
1) both parties mistaken concerning a basic assumption of fact
2) mistake materially affects agreed-upon exchange
3) adversely affected party did not assume risk of mistake
unilateral mistake
doesn’t prevent K formation; mistaken party may void if mistake is material and non-mistaken party knew/should have known of mistake
