Mutual assent

Question 1

what is mutual assent

Answer 1

offer + acceptance

Question 2

What is an offer

Answer 2

(1) A communication from the offeror that creates a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms.

(2) The terms must be definite and certain.

For a communication to constitute an offer it must contain a (3) promise, undertaking, or commitment to enter into a K. The offeree must be reasonably identified, and the subject matter must be reasonably definite.

Question 3

What terms are required in a real estate K

Answer 3

land description and price

Question 4

What terms are required for sale of goods

Answer 4

quantity term

Question 5

What is a requirement contract

Answer 5

Buyer promises to buy from a certain seller all the goods the buyer requires and seller agrees to sell that amount to the buyer

seller agrees to sell all that the buyer requires

Question 6

In a requirements contract what are the obligations of a buyer and a seller?

Answer 6

buyer - has to buy everything from the seller

seller - has to furnish buyer with everything buyer requires BUT can also sell elsewhere

Question 7

What is a output contract

Answer 7

Seller promises to sell to a certain buyer all the goods the seller produces and buyer agrees to buy that amount from the seller

buyer agrees purchase all of seller’s output

HINT: seller and output have the same number of letters (6)

Question 8

In an output contract what are the obligations of a buyer and a seller?

Answer 8

buyer - buyer promises to buy all of seller’s output but can buy from elsewhere too (as long as buyer has bought all of seller’s output)

seller - seller can only sell to buyer (since buyer has promised to buy all the output)

Question 9

What terms are required in a service k

Answer 9

nature of the work

Question 10

Types of terminations

Answer 10

1. By offeror
   
   1. Revocation
      
      1. direct/express
      2. indirect/implied
2. By offeree
   
   1. Lapse of time
   2. Re**j**ection
      
      1. express rejection
      2. counteroffer
3. By law

Question 11

*termination*

When the offeree makes their acceptance conditional, then it is:

Answer 11

a rejection!

Question 12

a rejection is effective when

Answer 12

received by offeror

Question 13

a revocation is effective when

Answer 13

when received by offeree

Question 14

How is an offer indirectly revoked

Answer 14

when reliable 3rd party indicates to offeree that offeror is no longer willing or able to contract

Question 15

a revocation by publication is effective

Answer 15

WHEN it is published

Question 16

Does MBR apply to revocation

Answer 16

NO! effective when received

Question 17

Offers that cannot be revoked (by offeror)

AKA: Irrevocable offers

Answer 17

1. Option K
2. Merchants firm offer
3. Detrimental Reliance
4. Beginning performance under unilateral k

Question 18

When is an option K created

Answer 18

created when offeror promises to keep the offer open for a certain period of time PLUS consideration by offeree

Question 19

Does a counteroffer kill an option K

Answer 19

A counteroffer will still not kill the original option contract because the option is being held open for a certain period

Question 20

What is a merchant’s firm offer

Answer 20

1. merchant promise (signed + in writing ) to keep an offer open
2. during a period of time and
3. if no time stated then a reasonable time BUT the reasonable time may not exceed 3 months (if period is 3 mo. then no consideration needed); applies only to sale of goods

Question 21

Who needs to be a merchant in the merchant’s firm offer

Answer 21

only the offeror must be a merchant

Question 22

Is consideration needed for a merchant’s firm offer

Answer 22

NO.

A merchant’s firm offer is enforceable even if no consideration has been paid by the offeree to keep the offer open

Question 23

What is detrimental reliance

Answer 23

When offeror could reasonably expect that offeree would reasonably rely to their detriment on the offer and offeree does so rely … then offer becomes irrevocable … will be held as a option K for a reasonable length of time

Question 24

When can a unilteral K be revoked

Answer 24

Before beginning performance

Question 25

# list (3) How can K be terminated by **operation of law**

Answer 25

1. **Death** or **insanity** of either party *unless option K* 1. ***note:** death or insanity need not be communicated* 2. **Destruction** of proposed K's **subject** **matter** -**OR-** 3. **Supervening illegality**

Question 26

What is acceptance

Answer 26

**Acceptance** is a timely manifestation of assent to the terms of the offer

Question 27

How does acceptance work for bilateral k?

Answer 27

1. promise to perform **-OR-** 2. beginning performance

Question 28

# list (2) Article 2 **invites** acceptance through

Answer 28

1. promise to ship **-OR-** *_{^{promise to perform}}* 2. current or prompt shipment of conforming **OR** nonconforming goods *_{^{beginning performance}}*

Question 29

Under, CL acceptance must

Answer 29

mirror the terms of the offer

Question 30

Under CL, any different or additional terms

Answer 30

are considered a **rejection** and **counteroffer**

Question 31

Under **unilateral K**, acceptance occurs when

Answer 31

performance is **completed**

Question 32

Does silence constitute acceptance

Answer 32

No **unless** it is 1. implied silence **or** 2. agreed upon silence

Question 33

Under UCC, when seller sends nonconforming goods, this constitutes

Answer 33

substitution

Question 34

Under UCC, when seller sends nonconforming goods with a note explaining why and sends the nonconforming goods as a **substitute, then**

Answer 34

the goods are merely an **accommodation**

Question 35

When seller sends nonconforming goods with note (iow: accommodation), and buyer does not accept, is the **seller** in breach?

Answer 35

**No** because seller sent nonconforming goods as a substitute

Question 36

breach vs accommodation when shipping nonconforming goods

Answer 36

**breach** - seller discovers they dont have the specified goods and sends nonconforming goods as an accommodation **accommodation** - seller notifies buyer that he lacks the specified goods, **notifies** buyer that he will be shipping nonconforming goods as an accommodation

Question 37

When seller sends nonconforming goods with note, is **buyer** required to accept?

Answer 37

No is **not** required to accept and buyer can **reject**

Question 38

# List (3) Additional terms added to K btwn merchants unless:

Answer 38

1. **Material alteration:** they materially alter the og terms (something that changes a party's risk or the remedies available) * Most common is adding a clause **disclaiming a warranty** 2. **Limit:** offer expressly limits acceptance to the terms of the offer 1. "accepting the terms of the K as is" means that add'l terms **cannot** come in 3. **Objected:** offeror has already objected to that particular term (or he objects **within a reasonable time**)

Question 39

If any party to the contract is not a merchant, the additional or different terms:

Answer 39

are considered to be **mere** **proposals** to modify the contract.

Question 40

Under MBR, acceptance is effective when

Answer 40

mailed

Question 41

# list (4) MBR does not apply to acceptance when | (iow: no contract formed)

Answer 41

1. Offer says acceptance is effective upon **receipt** 2. **Option K** 3. Offeree sends a **rejection** then **acceptance →** whichever arrives first 4. Offeree sends **acceptance** then **rejection** → acceptance effective **unless rejection gets there first** and offeror **detrimentally relied**

Question 42

Offeree sends a **rejection** then **acceptance**, which one is effective

Answer 42

whichever arrives first

Question 43

Offeree sends **acceptance** then **rejection,** which wins

Answer 43

acceptance wins **unless** rejection arrives first and offeror **detrimentally relied**

Question 44

Offe**ror** sends offer → revokes → accepts → receive revocation

Answer 44

contract created MBR applies, revocation effective only upon **receipt**

Question 45

Offe**ror** sends offer → revokes → receive revocation → send acceptance

Answer 45

**no K** revocation terminates power of acceptance