Formation Of contracts

Question 1

An implied in law Contractual obligation arises in what cases?

Answer 1

1. One party bestows a benefit on the other: AND

2. It is unjust for the recipient to retain the benefits without paying.

Question 2

In order to constitute an offer, a party’s communication must:

Answer 2

Be a outward manifestation that signals that acceptance will conclude the deal

Question 3

How can an offer be revoked?

Answer 3

1. Lapse of time
2. Death or incapacity of either party
3. Revocation by offeror
4. Rejection by offeree
   Mnemonic LD Ror Ree

Question 4

For Revocations of an offer by lapse of time, an offer lapses after what?

Answer 4

The time stated in the offer
Or
A reasonable time, if no time as stated

Question 5

What affect does the supervening death of the offer or offer we have on an offer?

Answer 5

It will terminate the power of acceptance with respect to the offer

Question 6

The offeror is free to revoke outstanding offer, at anytime and for any reason, as long as:

Answer 6

Revocation occurs prior to acceptance and is effectively communicated.

Question 7

Elements required for an enforceable option contract

Answer 7

1. And offer
2. A subsidiary promise to keep the offer open; and
3. Some valid mechanism for securing enforcement of the subsidiary promise (i.e. consideration)

Question 8

Define the special for revocation of construction contracts.

Answer 8

Under majority rule, where a general contractor uses a particular subcontractors bid to formulate his own bid, an implied option contract is created via promissory estoppel.

Question 9

What is the effect of a counter offer?

Answer 9

Counter offer made on the same subject matter operates to simultaneously reject the initial offer and propose a new offer.

Question 10

Define unilateral contract

Answer 10

An offer seeking performance in return

Question 11

When are the offeror and offerRE bound under a unilateral contract?

Answer 11

– The offeror is bound only when the offeror completes performance in accordance with the terms of the offer; and
– the offeree is never bound to perform because the offeree has never promised to perform.

Question 12

Under the modern rule, what is the effect of an offeree beginning performance of a unilateral contract?

Answer 12

The modern rule is that once the offeree begins performance of a unilateral contract, an option contract is created, and the offeror may not revoke.
🔺Exception an offer or may revoke under the modern rule where the offeree is engaged in “mere preparations” to perform rather than the beginning of performance itself.

Note: The offeree of a unilateral contract is free to aabandon the performance at any time and even to not undertake performance at all.

Question 13

What are the two general requirements to constitute affective acceptance?

Answer 13

– The acceptance must mirror the terms of the offer; and

– The acceptance must be communicated to the offeror.

Question 14

Any changes, additions, or subtractions from the terms of the offer operate two:

Answer 14

Make the attempted acceptance a counter offer, which is a rejection of the offer and the making of a new offer.

Question 15

What are the three circumstances where an offeree’s silence in response to an offer may constitute acceptance?

Answer 15

1. The offeree takes The benefit of the offeror’s service with a reasonable opportunity to reject them and with reason to know the offeror’s intention;
2. The offeror has given the offeree reason to understand that acceptance may be communicated by silence, and the offeree’s silence will operate as acceptance of the offer he intended as such; and
3. Because of previous dealings or other circumstances, it is reasonable that the offeree should notify the offeror if the offeree does not intend to except.

Question 16

Note to the rule for acceptance when offers cross in the mail.

Answer 16

There is no contract when offers cross in the mail.

Question 17

In what two situations does the UCC recognize a binding contract despite the presence of a non-conforming acceptance?

Answer 17

1. The shipment of non-conforming goods; and

2. The so-called battle of the forms.

Question 18

I’m a transaction between merchants, additional terms are considered part of the terms of the contract unless they meet one of what three exceptions?

Answer 18

1. The offer expressly limits acceptance to the terms of the offer;
2. The additional terms will materially alter the contract; or
3. The offeror objects to the additional terms within a reasonable time.

Question 19

Define an illusory promise.

Answer 19

A promise to perform that leaves performance to the discretion of the promising party.

Question 20

Under the UCC, the default rule for a missing price term is:

Answer 20

A reasonable price at the time established by the contract for the delivery of goods.

Question 21

Consideration can take what for forms?

Answer 21

1. A return promise to do something;
2. A return promise to refrain from doing something;
3. The actual doing of some act; or
4. Refraining from doing some act.

Question 22

What are the two basic elements of consideration?

Answer 22

1. Legal detriment; and

2. A bargained for exchange

Question 23

What are the four requirements that must be met in order for promissory estoppel to be available?

Answer 23

1. A promise;
2. Foreseeable reliance;
3. Actual reliance; and
4. Injustice without enforcement.

Question 24

And oral modification made in violation of a clause prohibiting subsequent or modifications maybe enforceable if:

Answer 24

The disadvantaged party relies on the modification or the parties perform in accordance therewith.

Question 25

Define the pre-existing duty rule.

Answer 25

A promisor cannot provide consideration where that consideration is a duty that the promisor is already obligated to perform.

Question 26

In a non-UCC contract, is consideration required to support a modification?

Answer 26

Yes

Question 27

A promise to increase compensation under an existing contract is enforceable as a mutual modification to the contract if:

Answer 27

Both parties agree to a performance that is different from the one required by the original contract, and the difference in performance is not a mere pretense of a newly formed bargain.

Question 28

Explain the differences in modification in a UCC versus a non-UCC contract.

Answer 28

Under the UCC, the modification must be made in good faith, and no consideration is required.
Under the common-law, the pre-existing duty rule applies, and new consideration is required.