II. Is there a deal between the parties?

Question 1

3 components to a deal (mutual assent)

Answer 1

1. a valid “offer”
2. an “acceptance”
3. “timely” acceptance

Question 2

Define the principle of mutual assent

Answer 2

Mutual assent exists when one party (offeror) has clearly manifested a willingness to enter into a contract in such a way that the other party (offeree) knows that assent is all that is necessary to complete the deal, and the offeree accepts

Question 3

Lucy v. Zehmer

Answer 3

A party in a contract will be held to their obvious intentions, as determined by a reasonable person, regardless of their undisclosed thoughts. The parties have mutual assent if it was reasonable to believe that an offer was actually being made.

Question 4

Kolodziej v. Mason

Answer 4

An enforceable contract requires mutual assent by both parties to agree to perform an act. There must be a clear indication that there is an assent to contract, not any reasonable doubt that the offer was in jest, and there need to be sufficiently defined terms to enter into a contract

Question 5

Stepp v. Freeman

Answer 5

For an implied-in-fact contract, the P must prove that elements of the contract are present; the context and circumstances prove that the party had a contract

Question 6

Definiton of offer

Answer 6

Manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his or her assent to that bargain is invited and will conclude the bargain

Question 7

PFT Roberson, Inc. v. Volvo Trucks North America, Inc.

Answer 7

An offer cannot be considered a binding offer to contract if there are still necessary details that need to be agreed upon in the contract

Question 8

Are solicitations made by Newspapers offers?

Answer 8

generally not offers but invitations to offer; an exception to this is found when an advertisement specifies something the buyer must do in return, and in doing this the buyer accepts the offer

Question 9

Lefkowitz v. Greater Minneapolis Surplus Store, Inc.

Answer 9

When ad is clear and definitive on terms, and has clear requirements of buyer, it constitutes as a complete and binding offer if a buyer completes the requirements

Question 10

Unilateral contract

Answer 10

A contract in which only one party makes a promise or undertakes a performance; acceptance on completing specific performance

Question 11

Bilateral contract

Answer 11

A contract in which each party promises a performance, so that each party is an obligor on that party’s own promise and an obligee on the other’s promise; a contract in which the parties obligate themselves reciprocally

Question 12

Continental Laboratories v. Scott Paper Co.

Answer 12

Establishes a Factor Test usually used to determine whether or not parties intended to be bound before written document

Question 13

Factor Test to determine whether or not parties intended to be bound before written document

Answer 13

1. whether the contract is of a class usually found to be in writing
2. whether it is of a type needing a formal writing for it’s full expression
3. whether it has few or many details
4. whether the amount is large or small
5. is contract common or unusual
6. whether all the details have been agreed upon or some remain unresolved
7. whether the negotiations show a writing was discussed or contemplated

Question 14

Defintion of acceptance

Answer 14

An acceptance is a manifestation of assent to the terms of the offer made by the offeree in the manner invited or required, if any, by the offer

Question 15

What happens at the moment of acceptance

Answer 15

The terms of the contract are fixed to those agreed upon in the offer. After acceptance, parties may modify terms of contract by mutual agreement but may not unilaterally alter contract

Question 16

Kortum-Managhan v. Herbergers NBGL

Answer 16

A contract of adhesion cannot be enforced on a constitutional right issue unless there is a clear, knowing waiver for the issue

Question 17

What is an adhesion contract

Answer 17

Contracts of adhesion arise when a party possessing superior bargaining power presents a standardized form of agreement to a party whose choice remains either to accept or reject the contract without the opportunity to negotiate its terms

Question 18

Beard Implement Co. v. Krusa

Answer 18

Purchase orders are not enforceable contracts unless accepted by offeree, unless unambiguously stated otherwise

Question 19

Purchase order v. Contract

Answer 19

Purchase order

• deal set out; by signing terms it becomes binding -common when not negotiable terms
• negotiating not needed on terms, other than quantity, price, delivery

Contract

• meeting of the minds
• negotiable
• certain terms

Question 20

What are the 2 rules regarding acceptance?

Answer 20

a. “The offeror is the master of his offer. An offeror may prescribe as many conditions or terms of the method of acceptance as he may wish, including but not limited to, the time, place, and manner.”
b. Above rule only applies if the contract is unambiguous regarding acceptance

Question 21

Acceptance Under UCC

Answer 21

Unless otherwise unambiguously indicated by the language and circumstances:

I. An offer to make a contract shall be construed as inviting acceptance in any manner and by any medium reasonable in the circumstances;

ii. An order or other offer to buy goods for prompt or current shipment shall be construed as invited acceptance either by a prompt promise to ship or by the prompt or current shipment of conforming or non-conforming goods, but such a shipment of non- conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer

Question 22

Fujimoto v. Rio Grande Pickle Co.

Answer 22

“If the offeror specifies no mode of acceptance, the law requires no more than the mode adopted,” and “If the overt act is one that clearly expresses intention to accept the specific offer is known by the offeror, there is effective acceptance.”; absent specification regarding the manner of acceptance, courts can look to the surrounding facts and circumstances to determine assent to acceptance

Question 23

Day v. Caton

Answer 23

Contract implied-in-law is determined by evaluating circumstances; based on a review of the facts, a jury can find silence as acceptance of a contract if one party had knowledge that the other party is doing valuable work for his/her benefit, and with the exception of payment, such silence indicated consent that would give rise to the

Question 24

Does one need to have knowledge of the offer to accept it?

Answer 24

“Most jurisdictions will hold that if the reward offer is made by a governmental entity, the usual rules of contract do not apply, and if any citizen who performs the requested service is entitled to the reward, even if the claimant had no idea that the reward was being offered”

In other cases, no

Question 25

Mode of Acceptance

Answer 25

An offeror can require notice of acceptance in any form that he pleases. One mode of acceptance can be specified without making it the exclusive means of acceptance. If no mode of acceptance is specified then the law requires nothing except that the mode adopted is in accord with usage and custom.

Question 26

Davis v. Jacoby

Answer 26

There is a presumption in favor of bilateral contracts, but bilateral vs. unilateral can be proven based on the intent of the author and the facts and circumstances, which can include the relationship of the parties and the mode and manner of acceptance indicated in the offer. Court found that it was a bilateral contract and therefore only promise to perform necessary to count as acceptance. If unilateral, death would have killed the contract before they could perform.

Question 27

How can offers be terminated? (6)

Answer 27

1. Revocation by Offeror
2. Lapse of Time
3. Death or Incapacity of the Offeror or Offeree
4. Rejection
5. The “mail box” rule
6. Counteroffer by the Offeree

Question 28

When is an offeree’s power of acceptance is terminated:

Answer 28

1. When the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract
2. When the offeror takes definitive action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect

Question 29

4 situations in which an offer is deemed irrevocable for a period of time

Answer 29

1. Options contract
2. Unilateral contract, partial performance
3. Merchant’s firm offer (UCC)
4. Detrimental reliance

Question 30

What is an options contract (common law)

Answer 30

an option contract gives the offeree the ability to pay the offeror to hold the offer open which makes it a binding contract that is not over until the option is over

Question 31

Do options contracts require consideration?

Answer 31

yes, absent consideration there is no obligation on the part of the offeror to keep the offeror open

Question 32

What is a unilateral contract with partial performance?

Answer 32

1. Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance (i.e., a unilateral offer), an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
2. The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.

Question 33

Does partial performance of a unilaterial contract result in a contract?

Answer 33

Yes, it results in a contract conditional on the completion of the contract

Question 34

What is the Merchant’s firm offer rule?

Answer 34

An offer by a merchant to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months

Question 35

What is detrimental reliance

Answer 35

An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice

Question 36

Dickinson v. Dodds

Answer 36

1. “A mere offer to sell property, which can be withdrawn at any time, and which is made dependent on the acceptance of the person to whom it’s made is a mere nudum pactum (naked agreement)”
2. Also if buyer knows the seller has changed their mind, can’t rush to try and get under the wire

Question 37

Marchiondo v. Scheck

Answer 37

Once partial performance is begun pursuant to the offer made, a contract results

Question 38

Drennan v. Star Paving Company

Answer 38

if the offeree knew that the bid was going to induce the offeror to action, then such offer is binding for a reasonable period of time; promise in which promisor would reasonably expect that the action of the promisee would be binding is binding in itself

Question 39

Lapse of Time

Answer 39

1. An offeree’s power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable time
2. What is a reasonable time is a question of fact-depends on circumstances and context

Question 40

Loring v. City of Boston

Answer 40

An offeree’s power of acceptance is terminated at the time specified in the offer or, if no time is specified, at the end of a reasonable period

Question 41

Termination by Death or Incapacity of the Offeror of Offeree

Answer 41

Offeree’s power of acceptance is terminated when the offeror dies or is deprived of legal capacity to enter into proposed contract

Question 42

Termination by Rejection

Answer 42

1. An offeree’s power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention
2. A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement

Question 43

The “Mail Box” Rule

Answer 43

If no mode of acceptance is specified, offeree has the power to accept and close the contract by mailing a letter of acceptance, properly stamped and addressed within a reasonable time AND the contract is made at the time and place that the letter of acceptance is put in the mail

Question 44

Morrison v. Thoelke

Answer 44

Contract is binding when acceptance is mailed, not received; deposited acceptance rule; mailbox rule only applies to acceptance, not counteroffer or revocation

Question 45

Termination by Counteroffer

Answer 45

Offeree’s power of acceptance generally terminates when, rather than accepting, the offeree makes a counteroffer; counteroffer as rejection (“Mirror Image Rule”)

Question 46

Livingstone v. Evans

Answer 46

Counter-offers are a rejection of the original offer, but a response to a counter-offer can indicate that the offeror is willing to stand by original offer

Question 47

Battle of the forms UCC provision?

Answer 47

UCC § 2-207

Question 48

UCC § 2-207 (1)

Answer 48

A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms

Question 49

UCC § 2-207 (2)

Answer 49

The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless: the offer expressly limits acceptance to the terms of the offer; they materially alter it; or notification of objection to them has already been given or is given within a reasonable time after notice of them is received.

Question 50

UCC § 2-207 (3)

Answer 50

Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act. (“knockout rule”)

Question 51

Commerce & Industry Ins. Co. v. Bayer Corp.

Answer 51

Follows 2-207 (3)-A contract with parties having conflicting terms can still be formed by conduct of parties, but only binding conditions are those agreed upon by both parties. (bc knockout rule)