Formation Flashcards
What is the general test for an offer?
A manifestation of commitment.
Whether a reasonable person in the position of the offeree would believe that his or her assent creates a k.
Can a comm. from S to B relating to S’s sale of Redacre to B be an offer even though nothing is said about price? Explain.
No. A real estate offer must state price and describe land.
What must an offer for real estate do? (2)
State price
Describe land
Can a comm. from S to B relating to S’s sale of her car to B be an offer though nothing is said about price? Explain.
Yes. The sale of goods doesn’t require price in the offer.
Can a communication from S to B relating to S’s sale of her car to B be an offer if it provides for the sale “for a fair price” What about if instead of the car, it is for a piece of land?
Explain.
No and no.
Under both the CL and the UCC, vague or ambiguous MATERIAL terms are not sufficient to make an offer.
What is the rule regarding specificity of requirements/outputs contracts?
What sort of language will suffice?
A k for the sale of goods can state the quantity of goods to be delivered under the k in terms of the buyer’s requirements or seller’s output
All, only, exclusively, solely
Under a requirements/output contract for the sale of goods, can a buyer increase the requirements/output?
If yes, any restrictions? If no, why not?
Yes.
The increase must be reasonably proportionate (25,000 to 26,000 ok; 10 to 50 not ok)
B offers to buy grits from S for 5 years. There is not a specific quantity term in the offer. Instead, it provides that B shall purchase all grits from S. Offer? Explain.
Yes. This is a requirements k, so the offer can state can state the quantity of goods to be delivered under the k in terms of the buyer’s requirements or seller’s output
In which 2 situations can an advertisement be an offer?
If it is in the nature of a reward (unilateral k). For example, A promises 100 pound reward to anyone who catches the flu after using its product.
If the ad specifies quantity and expressly indicates who can accept (e.g., $1 coat, first come first serve).
In what situation can a price quote be an offer?
If it is sent in response to an inquiry.
Can an offer ever be accepted after it is terminated?
no
During the break, I write in your notes that I offer to sell you my 73 Caddy for $400. The writing fails to indicate how long the offer will be kept open. Can you accept in five years? Explain.
No.
Lapse of time
Is lapse of time sufficient for termination?
Yes
How much time must lapse for an offer to be terminated?
Depends on the facts
In which situation can death or incapacity serve to terminate an offer?
If the D or I occurs after the offer but BEFORE acceptance.
What are the two ways in which an offer can be terminated by revocation?
Later UNAMBIGUOUS statement by offeror to offeree of an unwillingness or inability to contract OR
Later UNAMBIGUOUS conduct by an offeror indicating and unwillingness or inability to k that the OFFEREE IS AWARE OF
I make a deal to sell my car to Sharon Stone. In the shower that night, I exclaim “I’ve changed my mind!” Is the offer revoked? Explain
No. She has no idea.
On Jan 15, I offer to sell my Caddy to Sharon Stone. The next day, I sell my Caddy to Bob. Sharon sees Bob driving my Caddy and learns from him that he has bought it. Is the offer revoked? Explain
Yes. She is now aware
I offer my Caddy to Sharon Stone on day 1. I offer it to Bob on day 2. I offer it to Bill on day 3. Sharon learns of the other two offers. Revoked? Explain.
No. Multiple offers are OK, as they do not represent an unambiguous indication of revocation.
What are four situations in which an offer is irrevocable?
Options
UCC Firm Offer Rule
Reliance
Unilateral contract
What two elements are need for an irrevocable option offer to exists?
A promise not to revoke AND
The promise is supported by payment or other consideration
What is the UCC Firm Offer Rule?
An offer cannot be revoked for UP TO 3 MONTHS if its AN OFFER TO BUY OR SELL GOODS, it is a SIGNED, WRITTEN PROMISE TO KEEP THE OFFER OPEN, and the PARTY IS A MERCHANT.
S, a used car dealer, offers to sell B a 73 Caddy for $400. The offer is oral and includes a promise that it will be kept open for a week. Can S revoke? Explain.
Yes.
No UCC Firm Offer Rule because the promise was oral, not written.
S, a used car dealer, offers to sell B a 73 Caddy for $400. The offer is written and signed, and includes a promise that it will be kept open for a 6 months. Can S revoke? Explain. If yes, why? If no, when can he?
S can only revoke after 3 months. UCC Firm Offer Rule limits the irrevocable period to 3 months, so the 6 months will be trimmed back.
S, a used car dealer, offers to Sell B a 73 Caddy for $400. The written offer is signed by S. Can S revoke? Explain.
Yes. Offer does not state that S won’t revoke.
S offer to sell B her house for $100,000, and the written offer states that it cannot be revoked for the next four months. Can S revoke? Explain.
Yes. RE transactions are not covered by Firm Offer Rule. If B had given some sort of consideration, it would be an option, but that didn’t happen here.
What three elements are required to invoke estoppel to make an offer irrevocable?
Reliance
Reasonably foreseeable
Detriment
G is a contractor who is bidding on a contract to build a new hotel, using various subcontractors. S, a sub, submits a big to G to do the painting work for $100k. G relies on S’s bid in making its own bid and is awarded the k. Can S revoke? Explain.
No.
G relied on S’s bid, it was reasonably foreseeable that G would do so, and G has acted to its detriment if S indeed revokes. THUS, ESTOPPEL.
What action will make a unilateral contract offer irrevocable?
The start of performance by offeree.
Will preparation of the part of the offeree render an unilateral contract offeree irrevocable?
No.
O offers P $1000 to paint his house. O’s offer states that it can be accepted only by performance. P buys paint. O tried to revoke? Is this ok? Explain.
Yes. Mere preparation is enough enough to make a unilateral contract irrevocable.
What are three ways in which an offer can be rejected by words or conduct of the offeree?
Counteroffer
Conditional acceptance
Additional terms
S offers to sells Blackacre to B for $10,000. B responds, I will only pay $9,000. Can be later accepts the offer for $10k? Explain
No.
This is a counteroffer and the original deal is dead.
On Jan 15, S offers BA to B for $10k. B pays $2 for S not to revoke until April 5. On March 3, B makes a CO to S for $9k. Can B still accepts S’s offer? Explain
Yes. An option is in effect here, so B’s CO won’t terminate the offer.
S offers BA to B for $10k. B says, “will you accept $9k?” Can B later accept S’s offer? Explain.
Yes.
This is mere bargaining. It is not a CO, so the offer is alive.
At CL, what effect does a conditional acceptance have on the offer?
If rejects the offer and becomes a CO.
L offers to lease an apartment to T by sending T a signed lease that is silent about arbitration of disputes. T adds a paragraph that states that T accepts “provided that all disputes shall be resolved by arbitration” and signs. Has T accepts L’s offer created an express k? Explain.
No. This is a conditional acceptance, so view as a CO>
L offers to lease an apartment to T by sending T a signed lease that is silent about arbitration of disputes. T adds a paragraph that states that T accepts “provided that all disputes shall be resolved by arbitration” and signs.
L sends T the keys after receiving the conditional acceptance. Is there a k? Explain.
Yes.
K accepted T’s CO.
Under the UCC, what must be present for a a conditional acceptance to become a counter offer?
Express insistence
B sends S a pruchase order to polyester pant suits. The PO makes no mention of about arbitration of disputes. S adds a paragraph that states that S accepts “only if all disputes shall be resolved by arbitration” and signs. No further communications or actions.
Has S accepted B’s offer? Explain
No. There is express insistence here (only if)
B sends S a pruchase order to polyester pant suits. The PO makes no mention of about arbitration of disputes. S adds a paragraph that states that S accepts “only if all disputes shall be resolved by arbitration” and signs. No further communications or actions.
If S sends B the pant suits and B pays for them, is there a k?
Yes.
What rule governs additional terms added to an offer at CL?
Mirror Image Rule
What does the Mirror Image Rule state?
A response to an offer that adds new terms is treated like a CO rather than an acceptance.
L offers to lease a building to T by sending T a signed lease that is silent about arbitration disputes. T adds a sentence that states, “All disputes shall be resolved by arbitration proceedings,” and signs. Has T accepted L’s offer? Explain.
No. T added a term, thus violating the Mirror Imagine Rule.
L offers to lease a building to T by sending T a signed lease that is silent about arbitration disputes. T adds a sentence that states, “All disputes shall be resolved by arbitration proceedings,” and signs. Can T later accept the original offer?
No. Original offer is dead under the Mirror Image Rule
How does the UCC treat additional or different terms that are not a condition of acceptance?
Not a rejection
What does the UCC call additional or different terms that are not a condition of acceptance?
A SEASONABLE EXPRESSION OF ACCEPTANCE
B sends S a signed purchase order for grits that is silent about arbitration disputes. T adds a sentence that states, “All disputes shall be resolved by arbitration proceedings,” and signs. Is there a k? Explain
Yes. There is no express insistence that the new terms are a condition of acceptance, so this is considered a “seasonable expression of acceptance” under the UCC.
When and only when is an additional term for an offer for goods part of the contract? (2 reqs)
The term is immaterial AND both parties are merchants.
Epstein offers to sell his 73 Caddy to Conviser for $400. Conviser says “I accept. Deliver it on Saturday.” No further comm. Is there a k?
Yes. Seasonable expression of acceptance.
Epstein offers to sell his 73 Caddy to Conviser for $400. Conviser says “I accept. Deliver it on Saturday.” No further comm. Assuming there is a k, is the Saturday delivery a term?
No. Parties aren’t merchant.
Epstein offers to sell his 73 Caddy to Conviser for $400. Conviser says “I accept. Deliver it on Saturday.” No further comm. Assuming there is a k and both parties are merchants, is the Saturday delivery a term?
Yes, as long as it is not material.
Epstein offers to sell his 73 Caddy to Conviser for $400. Conviser says “I accept on the condition that you deliver it on Saturday.” No further comm. Is there a k?
No. Must be agreed upon.
Is the start of performance generally considered acceptance?
Yes
O offers P $1k to paint his house. P starts painting. Has P accepted? Explain.
Yes. P has started performance.
O offers P $1k to paint his house. P starts painting. Then stops. Breach? Explain.
Yes, this is a bilateral k, so this is breach.
O offers P $1k to paint his house and states that acceptance is effectuated only by completing the task. P starts painting. Then stops. Breach? Explain.
No. This is a unilateral k and P can stop.
Communications other than ____ are effective ____ when _____
Acceptance
Only when received.
Generally, acceptance is effective when . . . ?
Mailed (mailbox rule)
If a rejection is mailed before an acceptance, neither is effective until received. True or False?
True.
True or false: you can use the mailbox rule to meet an option deadline.
False.
Conviser receives a letter from Epstein offering to sell C his 73 Caddy for $400. On Jan 10, Conviser mails his letter of acceptance. On Jan 11, Conviser receives a letter from Epstein revoking the offer. Is there a k? Explain.
Yes.
Acceptance is effective when mailed. Revocation is not operable until it is received.
Conniver receives a letter from Phish inviting him to replace Trey in a new version of the group. On August 8, Conviser mails a letter to the group rejecting their offer. On August 9, he changes his mind and mails a letter of acceptance. What result if the rejection letter arrives first? Explain
No k.
If rejection is mailed before acceptance, and rejection is received first, then no k.
Band S execute an option that gives B the option to buy BA from S for $100k. The option contract provides that it expires on 7/13 at 5pm EST. B mails S a letter on 7/13 at 4:50pm, exercising the option to buy. Did B meet the option deadline? Explain.
No. You cannot use the mailbox rule to meet an option deadline.
What is the general rule when a seller of goods send the wrong goods?
Acceptance of k and breach of k.
Ordinarily, when when a seller of goods send the wrong goods, it is considered an option an a breach. What is the seller provides an explanation beforehand?
Counteroffer and no breach.
B orders 100 red widgets. S sends 100 blue widgets with the explanation that he is out of red, and that hopefully blue will do the job. Is there a k? Explain.
No. Since S offered an explanation, no k.
B orders 100 red widgets. S sends 100 blue widgets with the explanation that he is out of red, and that hopefully blue will do the job. Is there a breach? Explain.
No. Since S offered an explanation, no k. Since no k, no breach.
What two things ordinarily must be true for someone to be eligible to accept an offer?
They must know of the offer AND
They must be the person to whom the offer was made.
Can an offer be assigned to someone else?
No
Can an option be assigned to someone else?
Yes.
I offer a $500 reward for finding my dog. A finds my dog, returns him, but doesn’t know about the reward. I say nothing. A comes back the next day and demands the money after she finds out. Is that acceptance of the offer? Explain.
No. She did not know of the award (offer) when she accepted.
You pay me $10 for a 10-day option to buy my Caddy for $400. Can you sell the option to Conviser so that he can now exercise that option and buy?
Yes, as long as the option does not include “no transfer” language.
Name some legal reasons why a k might not be enforced despite offer and acceptance. (11)
Lack of consideration
Lack of capacity
Statute of Frauds
Existing laws that prohibit performance
Public policy
Misrepresentations
Nondisclosure
Duress
Unconscionability
Ambiguity in words of k
Material mistakes
