Formation of Contracts

Question 1

Offer

Answer 1

Outward manifestation of our intent to enter into a contract.

Looking for specific terms, intent to enter into K

* *Advertisements are generally not an offer, they are an invitation to offer.**

Question 2

5 ways to terminate an offer

Answer 2

1. Death
2. Lapse of time
3. Rejection: no
4. Counter offer: no, and change material term of the offer.
5. Revocation: person making the offer revokes it before you respond

Question 3

Direct Revocation

Answer 3

I call and tell you I change my mind before you respond

Question 4

Indirect Revocation

Answer 4

I made the offer to you and you learn that I made an offer to someone else (took it off the table for you). Once you learn I made offer to someone else you no longer have the power to accept my offer.

Question 5

Irrevocable offers:

Answer 5

1. Option Contract
2. Sale of goods (UCC)/ Form Offer
3. Unilateral Contract

Question 6

Option Contract

Answer 6

Where I promise you Ill keep offer open for a period of time.

a. We need promise to keep the offer open and additional consideration.

Question 7

Sale of goods (UCC)/ Firm Offer

Answer 7

Same as option contract: promise to keep an offer open

a. We need a writing signed by the merchant, promise to keep the offer open, merchants
b. Lasts for the time stated. If no time is stated max is 3 months. Once 3 months pass, the offer goes back to being revocable.

Question 8

Unilateral Contract

Answer 8

Promise for an act. Looking for performance.

a. The moment you begin performance the offer become irrevocable.

Question 9

Bilateral Contract

Answer 9

Promise for a promise

Question 10

Ways to accept

Answer 10

1. Can accept by silence
2. Can accept by performance
3. Mail

Question 11

Acceptance at CL

Answer 11

Mirror image rule: Your acceptance has to mirror my offer.

o If don’t specify any means you accept in any way that is reasonable

Question 12

Mailbox Rule

Answer 12

Acceptance is effective when SENT

o Exception to mailbox rule: when you send me the rejection first, and then you change your mind and send me an acceptance and the first letter to arrive is effective.

Question 13

What is UCC Sales of goods

Answer 13

In UCC sales of goods hypo as long as were on same page contract enforced, its more liberal.

Basic material terms are the same. If merchants we know each other there is custom way we do business

Question 14

Exceptions to UCC Sale of Goods

Answer 14

Exceptions where change in terms will make a difference:

o If you changed the terms and those changes materially altered a term in the contract (totally changed price, type of widget) it invalidates the offer and we have no deal.

o If I object to the offer in a reasonable amount of time, that will also invalidate the offer.

o Where the offer limits the acceptance (limits the way you accept the contract) dnt see this that often.

Question 15

Consideration

Answer 15

Bargained for exchange. Were making a deal, im giving up something youre giving up something. Don’t worry about the value but the deal

Question 16

Illusory promise

Answer 16

This is not valid consideration; Illusion looks like promise. Where im retaining control. Modern trend this is valid.

Question 17

Gift

Answer 17

The promise to give a gift is NOT consideration

If I give you the gift (already gave gift) I cant take it back that valid consideration.

Question 18

Past or moral consideration

Answer 18

Past or moral consideration is not consideration. stuff that has already occurred in the past

• You do something on your own then I promise to reward you for it, invalid consideration
• If I promise you the $ first then you go do it, we have valid consideration

Question 19

Promise to pay a debt barred by SOL

Answer 19

Promise to pay a debt that barred by statue of limitation is valid consideration.

• I promise to pay u debt even tho its past statue of limitations you can enf that promise as valid consideration. Stupid to offer it

Question 20

Promise to pay a debt that has been discharged by bankruptcy

Answer 20

Promise to pay a debt that been discharged by bankruptcy: It wiped away all my debts, If I then promise again to pay you it is now valid consideration.

Question 21

Forbearance to sue

Answer 21

Forbearance to sue: I have rt to sue u but I give up that rt (promise not to sue you) that is valid consideration.

Question 22

Promissory Estoppel

Answer 22

 A promise you that induces you to rely to your detriment. You only did it because I promised you. You relied on my promise.

 Answer must be about reliance and not consideration.

Question 23

Accord and Satisfaction- There is no dispute

Answer 23

With a debt. I owe u $100. I send u check for $50 that say paid in full. You cash it. Even tho check paid in full you still own me $50 more bucks. We agree there is debt, I pay you something for it. You can still come after me for the rem bal

Question 24

Accord and Satisfaction- Settlement/ Dispute/ Negotiation

Answer 24

I owe u $100. I don’t have $100. I offer I can pay $50. You say you need $90. We agree on $75. If theres some sort of settlement/ negotiation dispute back and forth between us I owe u $100 we agree on $75 we make a settlement. I can send you a check $75 paid in full and you cant come after me for $25.

Question 25

Accord and Satisfaction- When I doubt there was a debt in the first place

Answer 25

You call asking about $100. I don’t remember. I say ill give you $50 and you take it, you cant come after me for the rem $50. When I doubt that I owe u money in first place but I pay you something anyway that amount is enforceable and you cant come after me for the rem bal.