Formation and Consideration

Question 1

Def of K

Answer 1

Legally enforceable agreement

Question 2

Key components of possible agreement

Answer 2

1. Offer; 2. Acceptance; 3. Possible termination of offer

Question 3

Test re “has there been an offer”?

Answer 3

Whether reasonable offeree would believe that responding with consent creates K.

Question 4

Under common law, R/E offer requires what terms?

Answer 4

1. Price; 2. Description of R/E

Question 5

Sale of goods under UCC requires description and price? Exception to rule?

Answer 5

Just description (e.g., my audi), not price. It can be an offer w/o price if parties so intend. Except when for “fair price,” which is too vague to be offer.

Question 6

Trigger words for valid output/requirements contracts? Are they valid?

Answer 6

All, only, exclusively, solely. They are valid; not vague or ambiguous.

Question 7

Under requirements K, buyer can increase requirements provided that

Answer 7

increase is not unreasonably disproportionate.

Question 8

Is an ad or price quote an offer?

Answer 8

No.

Question 9

When can an ad or price quote be a unilateral offer?

Answer 9

1. If it’s in the nature of a reward, e.g., return of puppy.
2. Ad that specifies who can accept: e.g., fist come, first served.
3. When price quote sent in response to inquiry.

Question 10

Four methods an offer can be terminated?

Answer 10

1. Lapse of time (time stated or reasonable time)
2. Death or incapacity of either party (except for irrevocable offers);
3. Words or conduct of offeror revoke offer.
4. Offerree rejects offer

Question 11

Reqs for offeror to revoke offer?

Answer 11

Unambiguous statement or conduct of offeror THAT THE OFFEREE IS AWARE OF showing unwillingness or inability to K. E.g., if I offer car to A, then sell to B, A can still accept and have action against me.

Question 12

Awareness by offeree of multiple outstanding offers to sell = revocation?

Answer 12

No. Offer stands absent unambiguous revocation. Multiple offers don’t revoke.

Question 13

Four scenarios with irrevocable offers

Answer 13

1. Option (paid consideration to keep open for certain window of time, after which revocABLE)
2. UCC “Firm offer rule” good for THREE MONTHS if A. Merchant (broadly construed) B. offers to buy or sell GOODS C. with signed written promise to keep offer open.
3. Reasonably foreseeable detrimental reliance by offeree (contractor relies on subcontractor to submit bid)
4. Unilateral K where offerree has begun performance (not mere preparation, but performance – preparation can only trigger detrimental reliance)

Question 14

Three methods of indirect rejection of offer by offeree

Answer 14

1. counteroffer
2. conditional acceptance
3. additional terms (common law rejection only, not rejection under UCC Art 2)

Question 15

Does counteroffer terminate offer? Diff b/t counteroffer and bargaining?

Answer 15

Yes, counteroffer terminated existing offer (except options) and creates new offer. Bargaining does not terminate offer (e.g., “will you sell it for 90% of asking price?” is bargaining).

Question 16

Six trigger words of conditional acceptance?

Answer 16

“if,” “only if,” “provided,” “so long as,” “but,” or “on condition that.”

Question 17

Does conditional offer terminate offer? Comm law? UCC?

Answer 17

Common law: rejects and becomes a counteroffer that can be accepted by conduct
UCC: conditional acceptance = rejects offer. Even if conduct “accepts,” condition is not part of K.

Question 18

Additional terms added to K offer = rejection?

Answer 18

Additional terms = counteroffer rather than acceptance. This is “Mirror Image Rule” under common law.

Question 19

After counteroffer by offeree, can initial offer later be accepted?

Answer 19

No b/c offer is dead. Only exception = option that’s still open.

Question 20

Mirror image rule under common law is?

Answer 20

Under common law, a response to an offer that adds new terms is treated like a counteroffer rather than an acceptance.

Question 21

Additional terms in signed K = rejection under UCC? NOT a “conditional acceptance” situation. Is additional term part of K?

Answer 21

It’s acceptance. Additional term part of K if both parties are merchats + not material term + not rejected by offeror. B/t non-merchants or if addition is material, then the new term isn’t part of K.

Question 22

Which of these is necessary to form a contract? (A) A written or verbal agreement; or (B) Apparent mutual assent

Answer 22

Apparent mutual assent is necessary to form a contract. The parties must be in agreement to form the “same bargain at the same time.”

Question 23

When a contract for the sale of goods is missing the price term, the price will be?.

Answer 23

reasonable price at time of delivery

Question 24

A communication will not be considered to be definite and certain enough to be an offer if it is for the sale of goods and missing (A) quantity term, or (B) price term?

Answer 24

The quantity term is the only term that is absolutely required to make a communication an offer when the sale of goods is involved. Most other terms can be implied or supplied later in the contract.

Question 25

Which of these require a price term for formation of K: services, goods, R/E, or reqs Ks?

Answer 25

only R/E. The rest can be formed w/o price if necessary.