MBE Contracts

Question 1

Contracts Key Concepts

Answer 1

1. Offer and Acceptance
2. Consideration and Promissory Estoppel
3. Staute of Frauds (SOF)
4. Interpretation of the Parol Evidence Rule
5. The Performance Obligation
6. Defenses
7. Remedies
8. Assignment of Rights and Delegation of Duties

Question 2

Req. of a Valid K

Answer 2

1. Offer and Acceptance
2. consideration or a substitute
3. legal capacity
4. legal objective

Question 3

Implied-in-fact K

Answer 3

consensual agreements that fail to express the agreement of the parties in its entirety.

Question 4

Implied-in-law K

Answer 4

arises where there is an equitable imposition of a would be K. (quasi-contractual obligation)
The party conferring benefit is entitled to collect the fair value of the services rendered.

Question 5

What is needed for a valid offer?

Answer 5

There must be:

1) outward manifestation that
2) signals that acceptance will conclude the deal.

Question 6

Ways To Terminate the Power of Acceptance

Answer 6

An offer can be revoked in four ways:

1) lapse of time;
2) death or incapacity of either party;
3) revocation by offeror; and
4) rejection by offeree.

Question 7

Termination of the power of acceptance by the Offeror’s Revocation

Answer 7

The offeror is free to revoke an outstanding offer, terminating the offeree’s power of acceptance, at any time and for any reason, so long as:

1. the revocation occurs prior to acceptance and
2. the revocation is effectively communicated.

Question 8

Functional Equivalent Rule (revocation by offeror)

Answer 8

The offeror’s revocation must be made in a functionally equivalent manner as how the offer was made. However, if there is a better means reasonably available then that means must be used to revoke the offer. This terminates the power of acceptance even if the offeree isn’t aware of the revocation.

Question 9

Multiple Offeree Issue: American advertising Rule

Answer 9

ads, catalogues, and price lists are invitations for offers. However, if language in the ad identifies who gets the limited supply of goods then the ad will be construed as an offer.

Question 10

Multiple Offeree Issue: Reward Offers

Answer 10

Reward offers are generally treated as offers because the business is promising to pay something in exchange for the performance of a task. Two types:

1. Self Limiting Rewards - offers that indicate the task to be performed can only be done once.
2. Open-field Rewards - offers that indicate task can potentially be performed by multiple parties.

Question 11

Multiple Offeree Issue: Auctions

Answer 11

Generally, the auctioneer is inviting offers and the responding bids are the offers. However, if the auction is held w/o reserve then the auctioneer is making an offer to sale to the highest bidder.

Question 12

The Legal Effect of an Offer

Answer 12

An offer creates the power of acceptance in the offeree.

Question 13

Termination by Lapse of Time

Answer 13

An offer lapses after:

1. the time stated in the offer; or
2. if no time is stated, then w/n a reasonable time.

To determine reasonableness of time consider:

1. the subject matter and mkt. conditions;
2. degree of urgency and means of transmission.

Question 14

Face to Face Conversation Rule

Answer 14

An offer made in a face to face conversation, generally lapses at the end of the conversation unless stated otherwise.

Question 15

Offeror’s Revocation Types

Answer 15

The offeror can communicate the revocation of their offer in two ways:

1. Direct Revocation
2. Indirect Revocation

Question 16

Direct Revocation

Answer 16

Directly communicating the offeror’s intent to the offeree.

Question 17

Indirect Revocation

Answer 17

To indirectly revoke his offer, the offeror must: 1) take some action that is inconsistent with the intention to go through w/ the offer; and 2) the offeree must learn about the action from a reliable source.

Question 18

Ways to Prevent Revocation

Answer 18

There are two ways to prevent revocation of an offer:

1. C/L Option K
2. Firm Offer under UCC

Question 19

What are three situations where the problem of multiple offerees arise?

Answer 19

1. Commercial Advertisements. The general rule