Midterm 2 Flashcards
The court recognized that in applying the predominating purpose test, the court looks to four factors with neither being dispositive:
1.
2.
3.
4.
- The language of the contract
- The nature of the business of the supplier of goods and services
- The reason the parties entered into the contract
- The amounts paid for the rendition of the services and goods, respectively
- The language of the contract
- The nature of the business of the supplier of goods and services
- The reason the parties entered into the contract and
- The amounts paid for the rendition of the services and goods, respectively
(Some courts will add, what caused the problem?)
The predominant Purpose Test Under the 2022 Amendment
Pre-2022 UCC Amendment
One step- determine the predominant purpose, either goods under the UCC or not, and apply the determination to the whole contract.
If the contract was predominately for goods, apply the UCC to the whole contract.
If the contract was predominately for services, apply the common law to the whole contract.
Under the 2022 amendments:
If the predominant purpose is the sale of goods, apply the ________ to the whole contract.
If the predominant purpose was for services, apply the _______ only to a dispute involving the ______ aspect.
UCC
UCC
Goods
The language of the contract
Step 1 of the Predominant purpose test
The nature of the business of the supplier of goods and services.
Step 2 of the predominant purpose test
The reason the parties entered into the contract
Step 3 of the Predominant Purpose
The amounts paid for the rendition of the services and goods, respectively
Step four of the predominant purpose
Some courts will add what caused the problem?
Last step of the Predominant Purpose Test for some states
_________ is a significant consideration in deterring what the predominant purpose is.
Cost
With a ________, you have a warranty under the UCC.
Good
__________ is a term of art peculiar to the sale of goods.
Equipment
You don’t have a warranty for ________.
Service
What a reasonable person would think is under the ____________ theory of contracts.
Objective
What would an objective reasonable person have thought under the circumstances?
Objective theory of contracts
What someone’s actual intent was?
Subjective theory of contracts
Today we look at the _________ theory of contracts.
Objective
“We must look to the ________ _________ of a person as manifesting his intention rather than to his secret and unexpressed intention. The law imputes to a person an intention corresponding to the reasonable meaning of his words and acts.”
Outward expression
“The mental assent of the parties is not requisite for the ____________ of a _________.” If the words or other acts of one of the parties have bot one reasonable meaning, his undisclosed intention is immaterial except when an unreasonable meaning which he attaches to his manifestations is known to the other party.”
Formation
Contract
A manifestation of willingness to enter is not a _____ if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further _______ of _________.
Bargain
Manifestation of assent
An offeree, regardless of manifestation of this consent, is not bound by __________ contractual provisions of which he is unaware, contained in a document whose contractual nature is not obvious.”
Inconspicuous
Where there is no evidence of actual notice of terms, “the offeree will still be bound by the agreement if a reasonably prudent user would be on _________ _______ of the terms.”
Inquiry notice
A type of electronic signature that involves a user clicking a simple button to accept the agreement.
Click wrap Agreements
State that a user agrees to terms when the user accesses the site and uses it. They are usually enforceable if a user has actual or constructive notice of them.
Browse wrap agreements
Notice that is imputed to a person at the time that existing information would prompt an ordinarily prudent person to investigate the issue further.
Inquiry Notice
When only one side is bound and leaves an option open to everyone else.
Unilateral contract
In Stepp v. Freeman, the contract was an ________________ contract, because the facts and circumstances surrounding the lottery ticket pool had made it “inferable that a contract existed as a matter of tacit understanding.”
Implied-in-fact
The first required element to formation of a contract is the ________ ________ of the parties. Typically, an ____ by one party and _______ by the other establishes ________ _______. However, a court may also infer that the parties assented to the contract by looking at the _______ ___________, including the parties conduct and declarations. This is known as a contract _______ _ __________.
Mutual assent
Offer
Acceptance
Mutual assent
Surrounding circumstances
Implied in fact
Is an express contract an actual contract ?
Yes
Does an express contract require proof of all elements of a contract: _________,________,_________?
Offer
Acceptance
Consideration
Yes!
__________ contract is formed by language (oral or written).
Express
Express Contract: Assent to the terms of the contract is actually expressed in terms of an offer and acceptance. True of False
True
Is an Implied-In-Fact Contract an actual contract?
Yes
An Implied-in-Fact contract requires proof of all elements of a contract: _______,___________,________.
Offer, acceptance, consideration
In an _______________ contract the court infers that the parties assented to the contract by looking at surrounding circumstances, including the parties’ conduct and declarations.
Implied-in-Fact
In an _______________ contract, the plaintiff bears the burden of showing it was reasonably certain that a contract was intended.
Implied-in-Fact
Is an Implied-in-Law Contract (AKA) Quasi- Contract an actual contract?
No.
Do the elements of a contract have to be proven in an implied-in-law (AKA quasi-contract)?
No
An ____________ is a legal fiction created to effect equitable result.
Implied in law
Example: Someone is unconscious and is taken by ambulance to the hospital. They didn’t have an actual contract, but we have a quasi-contract where the court will likely make the party who was injured pay for the reasonable value of the ambulance. What type of contract is this?
Implied in law
Are gift promises enforceable as contracts?
No
The _______ is the first of three predicates to a contract.
Offer
An _______ is the manifestation of willingness to enter into a bargain so made as to justify another person in understanding that his assent to the bargain is invited and will conclude it.”
Offer
______________ and ______________ are usually not offers, but rather invitations to enter into negotiations.
Solicitations
Advertisements
Solicitations and Advertisements could be offers if they are __________, __________, and __________, and leave ________ ___________ _________ __________.
Clear, explicit, and definite
Nothing open for negotiation
Historically, __________ have been seen as invitations for a customer to enter into _______ or make an ______.
Advertisements
Negotiations
Offer
Lefkowitz Example: A newspaper ad to other public solitarios may constitute an offer, acceptance of which completes a contract, but only if the ad is “_______, ________, and ________, and leaves nothing open for negotiation.”
Clear
Definite
Explicit
“If either party intends not to be bound in the absence of a fully executed document, no amount of negotiation or oral agreement as to specific terms will result in the formation of a binding contract.” True or False
True
Executed means:
Typed, finished, and signed
The offeror is the “__________ _____ _____ _________”
Master of the offer
Three general requirements for an acceptance by a promise:
1.
2.
3.
- Must be an expression of commitment
- Must not be conditional on any further act by either party
- At common law, must not vary, even slightly, from the offers terms.
The _______________________ gives you a 3-day right to cancel a sale made at your home, workplace, or dormitory, or at a seller’s temporary location, like a hotel or motel room, convention center, fairground or restaurant. It also applies when you invite a salesperson to make a presentation in your home.
FTC’s Cooling Off Rule
The FTC’s Cooling Off Rule gives you a ___ _______ right to cancel a sale made at your home, workplace, or dormitory, or at a seller’s temporary location, like a hotel or motel room, convention center, fairground or restaurant. It also applies when you invite a salesperson to make a presentation in your home.
3 day
Laughlin might ask something along the lines of, “if there is a three day cooling off rule for contracts entered into by a traveling salesperson at your home..”
Okay
I have a men’s store and I decide that I need to purchase 100 blue shirts from a wholesaler. I contact the wholesaler and say, “I need to buy 100 blue shirts and I’ll pay x price” and they say affirm writing or orally and we will send you the blue shirts. That is a contract. We have ________, ________, and ________.
Offer, Acceptance, and Consideration.
I have a men’s store and I decide that I need to purchase 100 blue shirts from a wholesaler. I contact the wholesaler and say, “I need to buy 100 blue shirts and I’ll pay x price” and they say affirm writing or orally and we will send you the blue shirts. That is a contract. We have offer, acceptance, and consideration.
Let’s say that this wholesaler goes to pack up my blue shirts and all they have are white shirts and they send me white shirts instead. Do we have a breach? Why?
Yes. We had a deal, I may or may not want white shirts and we may or may not be able to work it out but they breached. If you send non-conforming goods it is a breach.
Example: I send in my order for 100 blue shirts at the price in the catalog of $10 a piece. Well, the wholesaler gets my order. They do not tell me anything but they just ship my blue shirts. We see that an order is construed as inviting acceptance unless you say otherwise either by a promise or by shipment. They shipped my blue shirts that I ordered. Is there a breach?
No
Example: I send in my order for 100 blue shirts at the price in the catalog of $10 a piece. Well, the wholesaler gets my order. They do not tell me anything but they just ship my blue shirts. We see that an order is construed as inviting acceptance unless you say otherwise either by a promise or by shipment. They shipped my blue shirts that I ordered. There is no breach.
If they send me white shirts? What is that?
An acceptance and a breach. They have accepted by performance but they have breached.
A shipment of non-conforming goods of white shirts does not constitute an acceptance, so you do not have a breach if the seller _________ ________ the buyer that the shipment is offered only as an ___________.
Seasonably notifies
Accommodation
If they had promised blue shirts they were not accepting just by shipping. They had already promised blue shirts. Do you have the option of accommodation anymore?
No. Once you promise you are stuck.
If they promise to deliver a shipment within a specific time are they in breach if they do not ?
Yes. Once you promise to deliver within a specific time you are stuck.
Where there is an offer by purchase offer and the offeree’s response is to ship the goods, one of the three scenarios occurs:
1.
2.
3.
- Shipment of conforming goods
(This is an acceptance by performance) - Shipment of non-conforming goods with notification of intent as accommodation
(This is a counteroffer, which the offeror is free to accept or reject) - Shipment of nonconforming goods
(This is an acceptance but the offeree is in breach
Qui tacit consentire videtur
A partywho is silent appears to consent
“If a party… voluntarily accepts and avails himself of valuable services rendered for his benefit, when he has the option whether to accept or reject them, even if there is no distinct proof that they were rendered by his authority or request, a promise to pay for them may be inferred.”
The maximum applies only if circumstances require. In other words: If the offeree is _______ in the face of facts which fairly call upon him to speak.
Silent
Where consumers get regular shipment at a set rate until they cancel the agreement - is called a?
Negative option plan
_________ refers to an alternative dispute resolution method where the parties in dispute agree to have their cases heard by a qualified arbitrator out of court.
Arbitration
A valid agreement to arbitrate must exist. True of False
True
In deterring whether a contractual agreement exists, “Courts must determine whether the outward manifestations of consent would lead a reasonable person to believe the offeree has assented to the agreement.” What does this refer to?
Objective standard
As a general rule, ______ and _______ do not constitute acceptance of an offer.
Silence and inaction
In bilateral contracts,
Both parties make a promise
In bilateral contracts, both parties make a promise and the contract is formed when
The promises are made
In ___________ contracts, only the offeror makes a promise; the offeree renders performance or forbearance, rather than a promise, as acceptance.
Unilateral
Contract not formed until full performance is done.
Unilateral contract
An offeree’s power of acceptance may be terminated by:
1.
2.
3.
4.
- Rejection or counter-offer
- Lapse of time
- Revocation by the offeror
- Death or incapacity of the offeror or offeree
Nahum Pactum
An agreement that is unenforceable as a contract because it is not clothed with consideration.
AKA Naked Promise
Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an _______ _______ is created when the offeree tenders or beings the invited performance or tenders a beginning of it.
Option contract
The question what is a reasonable time where no time is fixed, is a question of ______.
Fact
If the seller is a merchant, risk of loss passes to the buyer on his ______ of the goods.
Receipt
If the seller it not a merchants, risk of loss passes to the buyer on _______ ___ _______.
Tender of delivery
An offeree’s power of acceptance is terminated when the offeree or offeror _____ or is deprived of _______ _______ to enter into the proposed contract.
Dies
Legal capacity
The power of acceptance under an option contract is not terminated by:
Death or incapacity of the offeror
At common law a _____________ __________ such as this terminates automatically upon the death of the offeror, even though notice of the demise was not brought to the offeree’s attention.
Continuing offer
The power of acceptance under an ____________ ___________ is not generally terminated by rejection or counter-offer, by revocation, or by death or incapacity of the offeror.
Option contract
The general rule is that insofar as the mail is an acceptable medium of communication, a contract is complete and binding upon:
Posting of the letter of acceptance
The offeree makes an “overt manifestation of assent to the proposal” at the time of ________.
Mailing
If the offeree’s response attempts to add or change the terms of the offer, even slightly, it is deemed a ___________ and ___________.
Counteroffer
Rejection
- The language of the contract.
- The nature of the business of the supplier of goods and services
- The reason the parties entered into the contract
- The amounts paid for the rendition of the services and goods
Princess adds the basis of the complaint (although not dispositive)
Predominant Purpose Test
- The non-occurrence of any condition or acceptance under the terms of the offer
- Revocation by the offeror
- Lapse of time
- Death or incapacity of the offeror or offeree
- Rejection or counter offer by the offeree
Termination of the power of acceptance
UCC 2-204(3): “Even though one or more terms are left open a contract for sale does not fail for _________ if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.”
Indefiniteness
Thanks to ______ _______, the UCC is quite flexible on providing missing and vague provisions for everything except quantity.
Gap-Fillers
A contract must be sufficiently definite in order to be binding on the parties. The amount of rent does not need to be fixed, but there must be a “________ _________ ________ by which the rent could with certainty be computed.”
Definite objective standard
The contract must be “reasonably definitive and certain as to its terms,” and the standard is higher where _______ __________ is sought.
Specific Performance
The UCC does not contain a gap filler for _________.
Quantity
Person making the offer is the master of the offer. The ________ can say how a contract can be accepted.
Offeror
The person who either accepts or does not accept the offer.
Offeree
