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Contracts > OAC > Flashcards

OAC Flashcards

1
Q

Offer - gral

A
  • Usually in the for of a promise
  • Offeror: makes offer / Offeree: offer is addressed to.
  • DIPP elements
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2
Q

Offer- DIPP

A
  • Definitive terms
  • Intent expressed to be bound
  • Power of acceptance created (to create binding contract)
  • Particular offeree (not assignable)
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3
Q

Offer- DIPP - Definitive terms/ what yes, what not, test

A
  • Unambiguous/certain on all material terms
  • Objective test: how would reasonable offeree interpret it? (look for express objective intent to be bound)
  • Rise above mere puffery, solicitation, invitation
    • as gral rule not for advertisement.
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4
Q

Offer- DIPP - “Open terms” in offer - treatment

A

Gral Rule: to be determined by court

    • fill gaps when required/essential terms are satisfied
    • exception to Parole evidence rule (PER)
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5
Q

Offer- DIPP - Offer -Essential terms

A
  • CL - non real estate: parties + S matter + price + quantity + time of performance
  • CL -real estate: description of property + price
  • UCC: Only quantity (OJO more contracts are formed than under CL)
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6
Q

Offer- DIPP - “Open terms” in offer - UCC default terms to fill gaps (CPU)

A
  • Course of performance in contract if prior existence
  • Past dealing btwn parties in prior contracts
  • Usage of trade, industry terms.
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7
Q

Parole Evidence Rule (PER)

A
  • Excludes introducing previous or contemporaneous extrinsic discussions or agreements that contradict terms of written agreement.
  • EXCEPTION: CPU for UCC contracts
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8
Q

Offer- DIPP - Expressed Intent of being bound - Revocability

A

Gral Rule: Offer can be revoked at will by offeror before acceptance.

  • Revocation effective at the date of reception by offeree (independent of the medium use).
  • Naked promise to hold offer open is not enough
  • For unilateral contract check for CL substantial beginning of performance / UCC notice of beginning
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9
Q

Offer- DIPP - Expressed Intent of being bound - Revocability - Exceptions (2)

A

1) CL Option contract
2) UCC Firm Offer

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10
Q

Offer- DIPP - Revocability - Option contract - gral

A
  • Exception to gral rule of irrevocability after acceptance
  • As irrevocable promise to maintain offer for a certain period of time. (Different from setting deadline to respond)
  • Requires independent consideration for offeror
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11
Q

Offer- DIPP - Revocability - Firm offer - gral

A
  • Exception to gral rule of irrevocability after acceptance
  • Signed written agreement by merchant / Signed separately if in form supplied by offeree)
  • Provides explicit assurance of offer to be kept open for set period of time not > 3 months (“reasonable time” set by court if not set by parties)
  • Rejection by offeree doesn’t kill offer- it remains valid for set period
  • No consideration: if present turn into option contract
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12
Q

Offer- DIPP - Offer termination

A

1) Revocation before acceptance

UNLESS a) option/firm offer, b) offeree learns of inconsistent act with open offer, c) Already sold

2) Within reasonable time (for “open” offers)
3) By operation of law:
a) S matter illegal or destroyed,and
b) offeror dead/insanity

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13
Q

Offer- DIPP - Offer Rejection/Refusal by Offeree

A
  • Has to be unequivocal
  • Effective upon reception by offeror
  • Potential creation of couteroffer
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14
Q

Offer- Special rules for solicitation of bids from contractors and subcontractors

A
  • Offer irrevocable for “Reasonable time”, until contractor bid is awarded or rejected
  • Potential promissory estoppel if contractor reliance - not possible when low or suspicious (subc no need to perform them either)
  • No contract formation until original bid awarded to primary contractor
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15
Q

Acceptance - gral

A
  • Valid acceptance requires valid offer - Offeree needs to have Power of Acceptance, resulting in bilateral or unilateral contract
  • Offer is not assignable to other offeree
  • POA personal
  • Knowledge by offeree is required
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16
Q

Acceptance - Power of Acceptance - Concept

A

Ability to accept an offer and thus create a binding contract

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17
Q

Acceptance - Objective Standard for sufficiency

A

Reasonable person

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18
Q

Acceptance - Silence Rule

A

Gral Rule: Silence does not constitute acceptance

EXCEPT: agreed on / according to past course dealings btwn parties / customary for trade or industry (creates duty to speak to avoid contract formation)

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19
Q

Acceptance - Unilateral Contract

A

In the form of performance of requested act within specific time limit. Promise to perform is not sufficient.

  • Offer revocation when substantial performance differs for CL and UCC
20
Q

Acceptance - Unilateral Contract - Substantial performance

A

1) CL: substantial part performance is enough to bar revocation (For Restatement beginning or preparation to begin is enough)
2) UCC: Notification of beginning enough. (promise to complete is implied from beginning to perform - hence cause of action for breach of contract by offeror)

21
Q

Acceptance - UCC Bilateral Contract - Substantial performance- Ambiguous offer to ship rules

A

Offer must expressly exclude promise to ship.

22
Q

Acceptance - Reward Contract Rules

A
  • Requires knowledge from offeree at time of performance (unlike bounty)
  • Revocation needs same/comparable publicity than offer
23
Q

Output and Requirement Contract - gral

A
  • Exception to rule on quantity as necessary element of contract
  • Output: How much seller can provide?
  • Requirement: How much buyer can acquire?
24
Q

Output and Requirement Contract - Standards and Duties

A
  • Reasonability + Proportionality in relation to:
    a) stated estimate OR
    b) prior amount (with reasonable increase)
  • Parties to make “best effort” - Avoid illusory promises
25
Q

Sales by Auction - gral

A
  • Bid is offer / Hammer as moment of acceptance - Revocation before hammer
  • Presumption is bid with reserve
26
Q

Sales by Auction - Types (2)

A

1) Bid w/out reserve: irrevocable offer to sell goods to higher bid
2) Bid w/reserve: goods can be withdraw and offer revoked, without duty to accept bids lower to reserve price

27
Q

Acceptance - w/Conditional Terms

A
  • CL: Need to have “mirror image”. Acceptance with conditions as rejection and counteroffer.
  • UCC: no need for “mirror image” - unless indicated otherwise, any response can be acceptance for those undisputed terms UNLESS materially alters bargain (different standard for merchant/non merchant)
28
Q

Acceptance - w/Conditional or Additional Terms UCC - Minor Additional terms

A
  • Ok unless otherwise indicated: i.e. delivery dates, credit terms, overdue invoices, limit to right to reject goods)
  • For non merchants: add terms require approval by offeror
  • For merchants: offeror must reject within reasonable time
29
Q

Acceptance - w/Conditional or Additional Terms UCC - Material Alteration of Bargain

A
  • When surprises or creates hardship to other party w/out their express consent and awareness
  • Acceptance can still create contract, but those specific terms need affirmative agreement by offeror
  • i.e. arbitration clause, negation of standard warranties, reserve right from offeror
30
Q

Acceptance - Conflicts btwn offer-acceptance

A
  • CL: counteroffer - last shot rule - “battle of the forms”
    • last communication prevails
  • UCC: conflicting terms “knocked out” - gaps filled by UCC provisions (except for quantity)
31
Q

Acceptance/Revocation - Effective date- Gral rule

A
  • On receipt of communication by the other party
  • No contract formation if revocation prior to acceptance UNLESS firm offer /option contract
32
Q

Acceptance/Revocation - Effective date- Mailbox Rule

A
  • Exception to gral rule - for non-instant communication - Acceptance by time of dispatch (mailing) to offeror WHEN offeree using similar/faster means of communication as offeror
  • Even when offeror is unaware or has already dispatched revocation
33
Q

Acceptance/Revocation - Effective date- Mailbox Rule - Exception

A

When using slower or unauthorized options - Acceptance only on reception

34
Q

Acceptance/Revocation - Effective date- Rejection and Subsequent Acceptance rule

A
  • Rule of reception by offeror applies (not mailbox)
  • whatever he receives first (acceptance effective only if offer is still open to that date)
35
Q

Acceptance/Revocation - Effective date- UCC

A

Mailbox rule in reasonable manner - even if slower

36
Q

Acceptance/Revocation - FTC Consumer cooling-off rule

A

Conusmer has 3-day cooling off period to cancel contract when goods cost $25 or more when bought from home or from place different from merchant’s main sale of business

37
Q

Consideration - Concept

A

Something (act/forebearance/return promise) bargained for and received by a promisor from promisee that which motivates a person to do something.

38
Q

Consideration - Gral Rule

A

Consideration enforceable if bargained for + sufficient

    • extends to 3rd party beneficiary with rights on contract (even w/o privity)
  • If no bargain - then performance treated as volunteered
  • Uncertainty/difficulty to establish value of consideration is not enough to invalidate contract
39
Q

Consideration - Legal Sufficiency: Test + rules

A

Benefit/detriment test: Bargained for if act/return promise results in material benefit/detriment to promisor and promisee

  • mutuality: not necessarily of equal monetary value
  • In unilateral contract, detriment can be the offeree’s performance itself
40
Q

Consideration - Legal Sufficiency - Examples of non-qualifying considerations (4)

A
  • Past considerations
  • Gifts: bc there is no bargain
  • Illusory promises: a) doesn’t create legal obligation OR b) statement of non-commitment
  • Aleatory contracts: performance subject to uncertain future event outside party’s control
41
Q

Consideration - Moral Obligation Rules

A

Invoked by some courts when valuable consideration once existed and innocently surrendered

-i.e.: valid claim barred by SOF, creditor-promisee agreement not to object bankruptcy based on promisor written statement that he would later discharged the debt

42
Q

Consideration - Pre existing duty rule

A
  • Performance of legal duty already owed under a contract does not constitute consideration.
  • Party cannot change terms of contract without consideration and expect it to be enforceable.
  • EXCEPT: when honest dispute on amount or adequacy of performance and consideration is given
43
Q

Consideration - Pre existing duty rule - Accord Concept

A

Offer to give or accept stipulated performance in the future to satisfy obligor’s existing duty

44
Q

Consideration - Partial Payment Rule

A
  • Can be considered full consideration if there is a good faith dispute on an unliquidated amount and genuine compromise is obtained.
  • If accepted by payee, the obligee is discharged and can not be sued.
  • Same with in check writes “paid in full” / “all rights reserved” and deposited
45
Q

Consideration - Surrendering a legal claim

A
  • Deemed as valid consideration
  • When by party in good faith in return to other party’s promise to pay money.
  • Even if claim was legally invalid and good faith of claimant + well founded
46
Q

Consideration - Promissory Stoppel

A
  • Allows for validation of donative promise as consideration in the absence of bargained for exchange
  • When misrepresentation generated reasonable (foreseeable) reliance
  • Dx measured to reliance interest -i.e. pledge to charity, employee staying in job because of promise of retirement benefits, employee moves accross the US on promise of promotion
47
Q

Consideration - UCC contract modification

A

When modification in good faith no consideration required

  • when for $500 or more, it needs to be in writing

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