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Mutual Assent (offer & acceptance) Flashcards

1
Q

A contract is…….

A

A legally enforceable promise or set of promises.

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2
Q

Contracts can either be……

A

Express or implied

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3
Q

How are express contracts made?

A

By using language or writing.

Example: I orally promise to paint your Mini Cooper and you agree to give me $100 for this

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4
Q

How are implied contracts created?

A

By conduct.

Example: if you add petrol to your car you are paying for it. You have an implied contract with the petrol station based on your action of adding the petrol to your car.

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5
Q

What is a bilateral contract?

A

A promise for a promise.

Example: I promise to decorate your house with cat pictures, and you promise to pay me.

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6
Q

What are the 2 types of contracts we can have?

A

Bilateral & unilateral contracts

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7
Q

What is a unilateral contract?

A

Promise for an act.

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8
Q

For a unilateral contact what is required to accept an offer?

A

Performance

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9
Q

What are the two types of unilateral contracts available?

A

1) an offer to the public
2) an offer specifically directed at a specific person

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10
Q

Examples of a unilateral contract offer to the public?

A

1) Prizes
2) Contests
3) Rewards

Example: if someone finds my cat Mr.Meow you will get $500

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11
Q

If there is any doubt what type of contract it is what should you assume?

A

It’s bilateral

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12
Q

What may be treated as either a bilateral or unilateral offer?

A

Under the UCC an order to buy goods that are to be promptly shipped

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13
Q

What is the mnemonic for ucc goods which need to be shipped promptly?

A

PS2

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14
Q

Under the UCC how can an offer to buy goods that are to be promptly shipping be accepted?

A

1) A promise to ship OR
2) Actual shipment

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15
Q

PS2?

A

**P*romptly Shipped (offer) -> 2 ways to accept: Promise to ship or actual shipment

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16
Q

Some contracts are void and others are?

A

Voidable

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17
Q

What is a void contract?

A

A contract which doesn’t have any legal effect in the beginning.

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18
Q

Provide an example of a void contract?

A

A contract to commit a crime

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19
Q

What is a voidable contract?

A

A contract that a party can choose to make void.

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20
Q

Provide an example of a voidable contract?

A

Contract made by minors or those with mental illness.

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21
Q

What is required to create an enforceable contact?

A

1) mutual assent
2) consideration
3) no defences to formation

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22
Q

To have mutual assent what do we need?

A

1) We need an offer (a promise) &
2) Acceptance of that offer before termination of the offer

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23
Q

What is consideration?

A

1) Bargain for exam change of something of legal value or
2) A substitute for consideration.

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24
Q

Provide example of a substitute for consideration?

A

1) Detrimental reliance
2) Promiseory estoppel
3) A good faith modification under the UCC

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25
Q

Provide examples of any defences to formation

A

1) Lack of capacity
2) Mistake
3) illegality
4) Specific performance

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26
Q

Does a party with lack of capacity make the contract void or voidable?

A

Voidable

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27
Q

Does mistake made a contract void or voidable?

A

Void

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28
Q

Does illegality make a contract void or voidable?

A

Void

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29
Q

What is the best defence against someone in a contract action?

A

No contract was formed

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30
Q

Before looking into defences such as incapacity, mistake, duress, fraud, illegality & SOF what should you first look into?

A

Whether an enforceable contact was created in the first place.

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31
Q

The common law is used for?

A

1) Services
2) Employment
3) Real Estate

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32
Q

UCC Article 2 is used for?

A

Contracts for the current and future sale of goods

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33
Q

If both goods and services are being offered in a contract what must you do to determine which law governs?

A

Look at the whole deal and decide which is more important the goods or the services.

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34
Q

In a contract which covers both goods and services and you are looking to see which is more important what should you look at?

A

What the payment is primarily tied to. Is the larger payment primarily tied to the delivery or the goods or the completion of the services.

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35
Q

What is the name of the test for contacts which include both goods & services and you are trying to determine the governing law?

A

The predominant purpose test.

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36
Q

Example of the predominant purpose test?

A

Seller sells you some copy machines however the contract says the seller will also service them once a year. The predominant purpose is the copy machines. The UCC governs. The servicing is just incidental

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37
Q

To determine whether we have an offer we need to look at what?

A

1) The language used
2) The prior relationship of the parties
3) The surrounding circumstances and
4) The custom in the industry

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38
Q

Are general price quotations an offer?

A

No!

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39
Q

For a price quotation to be an offer what must be done?

A

The price quotation must be in response to a specific inquiry by someone.

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40
Q

Is a bracket with a $100 price tag and offer?

A

No

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41
Q

What are price tags and quotes unless they are given in response to a specific inquiry?

A

Invitations to deal

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42
Q

What does an offer need to be?

A

Sufficiently specific

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43
Q

Why does an offer need to be sufficiently specificv

A

To make it clear that the offeror intended to create a power of acceptance in the offeree.

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44
Q

Offers cannot be…..?

A

Too vague

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45
Q

Real estate contracts must include what?

A

1) A specified price
2) Identified the land

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46
Q

Does the price in a land contract need to be a figure?

A

No along as a price can be determined.

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47
Q

What must a sale of goods contract under the UCC include to ensure it’s not vague?

A

1) A quantity that is certain or
2) One that we can determine with a formula. (Output contacts etc)

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48
Q

What is required for a en employment contract not to be vague?

A

Time or they will not be enforceable.

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49
Q

Is an employment contract “forever” sufficient?

A

No an employment contract “forever” will simply be construed as “we can fire you whenever” you can’t enslave someone.

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50
Q

What are disqualifying terms in a contract?

A

Words such as
1) Fair
2) Appropriate
3) Reasonable

Too vague!

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51
Q

What words can be used in a contract and won’t be classed as too vague?

A

1) All
2) Solely or
3) Only though

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52
Q

A UCC sale of goods contract is missing a price term, is this a valid contract?

A

Yes!

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53
Q

What happens to a UCC sale of goods contract that doesn’t have a price term?

A

Reasonable terms will be supplied by the court if those terms are consistent with the parties intent.

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54
Q

For a common law contact for services is missing a price term is it valid?

A

No there will be no offer without a price term

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55
Q

What is the exception to the rule that a service contact without a price is not an offer?

A

If a party preforms services for someone but no prove is discussed in advance the court will substitute in the reasonable price.

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56
Q

When will the court not substitute the reasonable price in a service contract?

A

When the requesting party was aware of the quoted price beforehand. You will be paying the quoted price.

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57
Q

For a UCC sale of goods contact do we need a specific quantity?

A

Not always we can still have requirements and output contracts

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58
Q

Give an example of an requirement contract?

A

I promise to buy all the muffins I require.

Not quantity term in sight still valid and enforceable.

59
Q

Give an example of an outputs contract

A

I promise to sell you all the muffins I produce.

Not quantity term in sight still valid and enforceable.

60
Q

In requirements contract is the buyer allowed to increase the requirements?

A

Yes. So long as it is moderate.

61
Q

In a requirements contract what would be classed as a moderate increase?

A

10%. You cannot require 10 muffins every day of the year then require 100,000 muffins.

62
Q

Do increases in a requirements contact need to be communicated to the offeree to accept them?

A

Yes! You can’t just gain indirect knowledge of an offer and be like yeah I think that’s my offer now.

63
Q

“Wood you consider selling me your Van Cleef for $500?” Offer or no offer?

A

Would I “consider”? No. This is not an offer. You are just trying to be nosey and trying to pocket watch me.

64
Q

Price quotations offer or not an offer?

A

NOT offers unless in response to someone specifically asking.

65
Q

A statement of intention “I intend to sell you my Cartier love bracelet I haven’t taken off in 12 years for $900”. Offer or not an offer?

A

You intend? No this is not an offer.

66
Q

Opinions
“I believe your new Rivian car is worth $75k”

A

Um not an offer to me. Just more wallet watching by a hater.

67
Q

Advertisements

Offer or not an offer?

A

These are not offers unless they are specific to price and quantity and indicate who can accept it and when!

1 muffin for $1 = no offer

1 muffin for $1 until supplies last =offer

68
Q

1 muffin for $1 until supplies last. Offer or no offer?

A

Offer!

69
Q

Advertisements p2

1 muffin worth $5, first come first serve. Offer or no offer?

A

No offer. The price is too speculative.

70
Q

1 muffin for $5x first come, first serve. Offer or no offer?

A

Offer

71
Q

I’ll ONLY buy this computer if you throw in AirPods is this an offer and can it be accepted?

A

No this is a counter offer. You cannot accept an offer after a counter offer which kills the original offer.

72
Q

Could you also throw in the AirPods? Can you accept this offer?

A

Yes you can still accept the offer after an inquiry.

73
Q

How do we terminate an offer?

A

1) Operation of law
2) Lapse of time
3) Words or conduct or the offeror

74
Q

What is covered under operation of law?

A

1) Destruction
2) Death
3) Supervening Illegality

75
Q

If the subject matter of the contract is destroyed prior to acceptance (goods, property) what happens?

A

The offer is dead.

I offer you a muffin. The muffin blows up. No deal.

76
Q

How does death or incapacity of either party affect an offer?

A

Death of incapacity will terminate the offer.

If you die or don’t have legal capacity to enter into a contract you can’t enter into a contract

77
Q

What are the exceptions to death or incapacity rule regarding termination of offers?

A

1) Option contracts.
2) Part performance of an offer when entering into a unilateral contract.

78
Q

Someone pays for an option contract and the other party dies has the offer been terminated?

A

No. The option to hold the offer open has been paid. The offer is still alive and acceptable.

79
Q

If you offer me $500 to find Sparky then become legally incapacitated and I have spent 47 hours trying to find sparky. If I find him will still get the $500 despite your incapacity?

A

Yes! I have made part performance of a unilateral contract. If I find the dog I get the money despite you no longer having capacity to contract.

80
Q

If you have a contract to buy some fancy fidget spinners from Russia and your friend Jimmy was going to buy them from you. Then the U.S has a trade ban on Russian imports are you still obligated to sell to Jimmy under the contract?

A

No the whole contract has become illegal to even do, through no fault of either party the contact is dead. You and Jimmy are both excused from performance now.

81
Q

You have a offer which states a time the offer is to expire and you miss this because you didn’t read correctly and now that date has passed. Can you still accept the offer?

A

No time has lapsed! The offer has been terminated.

82
Q

If there is no time stated for when an offer will expire is it indefinite?

A

No. If there is no time stated it will expires in a reasonable time (which is usually a month)

83
Q

How long does a reward offer to capture an FBI Most Wanted person last before expiring?

A

A unilateral offer like a reward will expire either by lapse of a reasonable amount of time or by revocation ie. They took down the reward)

84
Q

Can an offer be revoked just by the offeror saying they retake the offer?

A

Yes! This will suffice. Offers can actually be terminated through the words of the offeror or the conduct or the offeror.

85
Q

A girl in Brooklyn offered Goat to stay at her place during the July cycle for a week. Then when Goat got there she said she began dating a famous chef and that Goat can no longer stay at her place. Does Goat have any recourse?

A

No the offer was retracted just like that.

86
Q

When the offeror unambiguously indicates a change of mind what must be look at?

A

The actions of both the offeror & the offeree. Is the offeree aware the offeror is unambiguously indicating he’s had a change of mind.

87
Q

Goat purchased flowers from Fox Fodder Farms the trendiest flower shop in NY & sent them to a girl he was trying to impress. She took a photo of them to show Goat how beautiful they were. The next day she invited Goat over. When Goat arrived his flower arrangement was nowhere to be found. In their place was an enormous expensive arrangement from a chef which said I love you. What’s happened to the girls offer to allow goat to win her over?

A

The offeror had unambiguously indicated their change of mind through their conduct and sadly Goat was aware of it the moment he gazed upon that expensive flower arrangement. The offer was terminated.

88
Q

If Jimmy offers to sell you his motorcycle and then you go golfing with Jimmy’s best friend and he says “yea Jimmy just sold ME his motorcycle” what’s happened to Jimmys offer to sell his motorcycle to you?

A

Revoked. The power to accept terminated when you found out the subject matter of the offer has been sold.

89
Q

Revocation is effective when?

A

At the time of receipt

(vs. When it is sent via the mailbox rule)

90
Q

If a buyer accept and offer before the seller revokes is the seller still able to revoke?

A

No. Once the buyer accepts it is too late for the seller to revoke.

91
Q

What are the four things that limit an offeror’s power to revoke their offer?

A

1) Option Contracts
2) Firm Offer Rule
3) Detrimental Reliance
4) Part Performance of a Unilateral Contract

92
Q

What is an option contract?

A

The offeror promises to keep the option open and the offeree pays for the privilege of the offer being kept open

93
Q

Provide an example of an option contract

A

I offer you a muffin for $10. You pay me $1 to keep the offer open for a week.

94
Q

If an offeror promises to keep an offer open for $5 but the offeror doesn’t get round to paying it is the offeror able to revoke his offer?

A

Yes! if no consideration is paid the offeror can revoke at any time.

95
Q

An options contract that nobody paid for is what?

A

Illusory. A false promise in a world of false promises

96
Q

If someone on the bar exam says they won’t revoke their offer and nobody pays any money for it what can that person do?

A

Revoke their offer

97
Q

What happens if someone rejects an option before it expires or gives a counter offer?

A

Nothing. You paid for the option. You can still accept the offer you rejected so long as the offeror didn’t rely on it.

98
Q

What must you ensure the offeror does not do when you reject an offer under an option contract?

A

Rely on your rejection

99
Q

What can you do with an offer you have paid for an option for?

A

1) Reject it
2) Counter offer it
3) You can do anything!

100
Q

What do we need for a firm offer rule?

A

1) Must be dealing with the UCC sale of goods
2) The offeror must be a Merchant AND
3) A written and signed offer that PROMISES to keep an offer open for a certain period of time

101
Q

Does firm offer rule apply to common law or UCC?

A

UCC sale of goods

102
Q

To be classed as a merchant under the firm offer rule what must they be?

A

1) Someone who REGULARLY deals in goods of a certain kind or
2) Someone with specialised knowledge of the business practices involved

103
Q

Under the firm offer rule does the written agreement need to be signed in wet ink?

A

No it can be an electronic signature as well

104
Q

Under the firm offer rule does the written offer need to be provided in person?

A

No it can be faxed or emailed also

105
Q

If all elements are met for the firm offer rule how long must the offer remain open and unrevoked?

A

up to 3 months

106
Q

What is not required for a firm offer rule?

A

Consideration

107
Q

Once a firm offer rule hits 3 months does it terminate?

A

No it just becomes revokable by the merchant

108
Q

An offer cannot be revoked if there has been what by the offeree?

A

Detrimental reliance

109
Q

For detrimental reliance to apply what must the reliance be?

A

reasonably foreseeable

110
Q

Under part performance of a unilateral contract how long is the offer unrevokable?

A

It won’t be revocable for a reasonable time in which the offeree could complete performance

111
Q

If someone read a reward sign for a missing dog Sparky and they already started to look for lost Sparky is the owner (offeror) able to revoke his offer of the reward if Sparky is found?

A

No!

112
Q

Is simply preparing to start performance enough to satisfy part performance of a unilateral contract?

A

No. They need to actually start the performance ie. Actually start looking for the lost dog preparing to look for the dog is not enough.

113
Q

Is part performance full acceptance of a unilateral offer?

A

No! In order to accept an offer you need to actually complete performance ie an offer to look for someones dog you need to find the dog and bring him back to the owner to accept performance and receive the reward.

114
Q

In what kind of contract will part performance amount to acceptance of an offer?

A

A bilateral contract

115
Q

If Goat tells rainbow brown that he will pay him $100,000 if he designs a gorgeous Goat figurine for him…and Rainbow Brown starts working on it if Goat Dies can Goat’s estate can’t revoke the offer?

A

No as Rainbow Brown started work on the figurine the estate can’t revoke the offer for a reasonable time.

116
Q

What are the three types of rejection?

A

1) Express
2) Counter-offer and
3) Conditional acceptance

117
Q

How can rejection be made?

A

By words or conduct

118
Q

What is express rejection?

A

Someone expressly rejects and tells them to fuck off with their offer

119
Q

What does a counter offer do?

A

1) Terminates the offer and
2) Creates a new offer

120
Q

If there is a counter offer made there will be no contract unless what?

A

The counter-offer itself gets accepts

121
Q

Are questions counter-offers?

A

No!

122
Q

Will you take $10 for this muffin would this be classed as a counter-offer?

A

No this is bargaining and does not terminate the offer

123
Q

I will only pay $9 for this muffin, is this a counter-offer?

A

Yes this is a counter-offer which terminates the original offer

124
Q

Under what law does conditional acceptances terminate the offer and then become a new offer?

A

Both Common Law & UCC

125
Q

Provide an example of a conditional acceptance?

A

I accept on the condition that you throw in some new Bose QuietComforts or I accept if you love me.

126
Q

What does a conditional acceptance do to an offer?

A

Terminates the original offer and creates a new offer

127
Q

Conditional acceptances are essentially what?

A

Counter-offers

128
Q

Acceptance requires what?

A

Intent to be bound

129
Q

If someone says I’ll try my best in response to an offer of a proposed deal does this accept the offer?

A

No

130
Q

If someone doesn’t have full intent to be bound by the terms of the offer what happens?

A

It’s not good acceptance and the offeror can revoke the offer.

131
Q

Can parties be bound contractually when they have reached an agreement in principal but their lawyers haven’t drafted the paperwork to make it official?

A

Yes

132
Q

What is required for parties to be bound contractually by an agreement in principal?

A

1) Meeting of the minds and
2) Intent to be legally bound

133
Q

If parties have meeting of the minds and
Intent to be legally bound do they need the paperwork to be bound contractually?

A

No!

134
Q

What is the mirror image rule?

A

For an acceptance to create a valid, enforceable contract it must exactly match the terms of the offer.

135
Q

Under the mirror image rule acceptance that adds additional terms is treated as?

A

A counter offer and no contract is formed.

136
Q

Battle of the forms applies to what time of contracts?

A

UCC sale of goods contracts only

137
Q

What does the UCC not follow?

A

The mirror image rule

138
Q

Where is battle of the forms found?

A

UCC 2-207

139
Q

For battle of the forms what is important to remember?

A

Are you dealing with a contract with (2) merchants, or a contract with either (2) non-merchants or (1) merchant and (1) non-merchant

140
Q

When is the only time fast and loose rules apply?

A

When we have a contract between 2 merchants.

141
Q

Why was the battle of the forms created?

A

To accommodate business via purchase orders, allowing people to buy and sell things without the need for lawyers to draft contracts.

142
Q

Battle of the forms allows us to?

A

Add new terms into a contract on a fast and loose basis.

143
Q
A

K Formation (5 decks)

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