Formation

Question 1

Sales of Goods Contract

Answer 1

If sales of goods contract, define:

(1) Goods: Items movable and identified at the time of contracting
(2) Merchants: A buyer or seller of goods in kind (discuss whether the parties are merchants).

Question 2

Life of Contract Checklist

Answer 2

(1) Formation; (2) Defenses to Formation; (3) Defense to Enforcement - SoF and Unconscionability; (4) Third Party Beneficiaries and Assignees; (5) Construction - Parol Evidence Rule; (6) Conditions; and (7) Breach and Remedies

Question 3

When to Discuss Formation

Answer 3

Discuss unless the facts say there is a valid contract

Question 4

Offer

Answer 4

An offer consists of: (1) a promise, undertaking, or commitment to enter into a contract; (2) with the essential terms certain and definite; and (3) communication of the promise and the terms to the offeree.

Question 5

Revocation

Answer 5

Effective upon Receipt. A revocation terminates the power to accept if it is communicated to the offeree before she accepts. A revocation can be communicated directly or if the offeree indirectly receives correct information from a reliable source of acts that would indicate to a reasonable person that the offer is terminated.

Question 6

Limitations on the Power to Terminate

Answer 6

Where (1) the offeree gives consideration for an offeror’s promise not to revoke; (2) a merchant under the UCC executes an offer in writing that, by its terms, gives assurances it will be held open. If no time is stated, it will be held open for a reasonable time not exceeding three months.

Question 7

Acceptance

Answer 7

Unqualified assent to the terms of an offer communicated to the offeror in a medium reasonable under the circumstances, except if the offer limits the form of acceptance.

Question 8

Acceptance by Mail

Answer 8

Contract created at the moment of dispatch, unless the offer stipulates that acceptances is not effective until received.

Question 9

Rejection

Answer 9

Terminates the offer

Question 10

Conditional Acceptance

Answer 10

Not acceptance but a rejection

Question 11

Counteroffer

Answer 11

A counteroffer differs in its terms from the offer and operates both as a rejection of the original offer and a new offer in common law.

Question 12

UCC Battle of the Forms

Answer 12

(1) First decide whether the proposals are additional terms or different terms.
(2) Additional terms as between merchants become part of the contract unless the offer expressly limits acceptance to the terms of the offer; they materially alter the offer; or notification of objection to the additional or different terms is given within a reasonable time after notice is received.
(3) If between nonmerchants, new terms act as proposed changes that are not effective unless seller did something to accept the proposals.

Question 13

Conflicting Terms

Answer 13

Some courts construe different terms as proposals for additions and as between merchants are analyzed in the same way as additional terms.

Question 14

Conflicting Terms (Knockout Rule)

Answer 14

The conflicting terms are both knocked out of the contract. The terms are then replaced by UCC gap fillers or, if there aren’t any, by course of performance between the parties.

Question 15

Consideration

Answer 15

Requires a bargained-for exchange: a detriment to the promisor and a benefit to the promisee.

Question 16

If Consideration Fails

Answer 16

Discuss the elements of promissory estoppel: (1) Whether the promisor should reasonably expect to induce definite or substantial action or forbearance; and (2) such action or forbearance is in fact induced.