Formation of Contract Flashcards
What do you look for in the contract Agreement Process?
look for (i) initial communication (offer) and (ii) what happens after the initial communication (termination of the offer) and (iii) who responds and how she responds (acceptance)
Define an offer
An offer is a manifestation of an intention of one person to contract–words or conduct showing commitment by one person.
what is the basic test for an offer?
Would a reasonable person in the position of the offeree believe that his assent would create a contract
What law applies to a Sale of Real Estate Contract? What is required in a Sale of Real Estate Contract?
Common Law applies. Price and description required.
What law applies to a Sale of Goods Contract? What is not required?
Article 2 applies. No pricing requirement
Can Vague or Ambiguous Material Terms be considered an offer?
Not an offer under common law or UCC [words like Appropriate, fair, reasonable]
What is a Requirements Contract?
A contract for the sale of goods can state the quantity of goods to be delivered under the contract in terms of the buyer’s requirements or seller’s output [All, only, exclusively, solely]
Requirements or output contracts are not vague or ambiguous and are valid
when is it permissible for you to ask for an Increase in requirements for output/requirements contract? Under what circumstance is it impermissible?
Permissible so long as the increase is in line with the prior demands. NO UNREASONABLY DISPROPORTIONATE LIMITATION ON INCREASES.
Context: Is an advertisement or price quotation an offer? What are the exceptions?
Generally no, exceptions:
(i) an advertisement can be a unilateral offer if it is the nature of a reward
(ii) an advertisement can be an offer if it specifies quantity and expressly indicates who can accept (1 fur coat, $10 first come first served)
(iii) price quotation can be an offer if sent in response to an inquiry.
What are the four Methods for of Termination of an Offer?
1) Lapse of time-time stated or reasonable time
2) Death of a party prior to acceptance, exception: irrevocable offer
3) Words or conduct of offeror, i.e. revocation of an offer
4) Words or conduct of the offeree i.e. rejection
What two ways can the offeror revoke an offer?
Later unambiguous statement by offeror to offeree of unwillingness or inability to contract, or later unambiguous conduct by offeror indicating an unwillingness or inability to contract that offeree is AWARE OF
Recall: multiple offers are not revocation
Which four offers are irrevocable?
- Options,
- UCC Firm Offer Rule,
- Reliance,
- Unilateral Contract (if they have begun performance)
What is an option? Can it be revoked?
An option is a (i) promise to not revoke the offer (or promised to keep it open) AND (ii) this promise is supported by payment or other consideration (option)
It cannot be revoked.
What three elements must be satisfied for the Firm Offer Rule?
How long can the offer be open?
An offer cannot be revoked for up to three months if it is
(i) offer to buy or sell goods, (ii) signed written promise to keep the offer open, and (iii) party is a merchant (merchant is generally a person in business)
What are the three elements of reliance that make an offer irrevocable?
An offer cannot be revoked if there has been (i) reliance that is (ii) reasonably foreseeable and (iii) detrimental