Page 3 Flashcards
What is a gap filler?
Term the court supplies because it thought the parties would’ve agreed on it if it had been brought to their attention, or it aligns with community standards of fairness and policy
Gap fillers are used because it is assumed that what?
Parties must have intended these terms, but just failed to express them
What do the courts consider when creating a gap filler?
- the intention of the parties
- purpose of the contract
- good faith/fair dealing
- reasonableness
Courts refuse to fill material terms if what?
No objective standard can be found
How can time become an indefiniteness issue?
If there was a duration problem
What is the major duration problem that happens to create indefiniteness?
Agreements to agree
If the contract is silent about a material term, does that necessarily mean it fails for indefiniteness?
No, the term can be implied from surrounding circumstances like:
- trade/local usages
- course of dealing
- or filled with a gap filler
How do courts deal with agreements to agree?
- CL: denies enforcement of these where further negotiation is contemplated
- modern: courts will supply the missing term if it was intentionally left open
Modernly, agreements to agree have what implied promise in them?
A promise to negotiate in good faith
If an employment contract doesn’t state duration, what is it assumed to be?
At-will employment
What is at-will employment?
Employment that lasts as long as:
- an employee is able to perform the work hired for
- and the employer continues in the business
How can employment contracts be terminated?
For a good cause or no cause but not for morally wrong cause
What is considered morally wrong cause if you terminate an employee?
Termination motivated by bad faith, malice, or retaliation (considered a breach)
What are the things that must be present in order to make an employee manual enforceable?
- clear language
- handed to employee
- employee reasonably believes it’s an offer
- employee accepts by commencing or continuing work afterward
What is mutual agreement?
Offer and acceptance
Mutual agreement must be manifested by what?
The objective theory of contracts
What is the objective theory of contracts?
What a reasonable person would understand the expression to mean
What is the rationale behind the objective theory of contracts?
To protect the parties’ reasonable expectation in relying on a promise
How does the manifestation of assent occur?
When the party uses an expression that he knows/has reason to know the other would reasonably interpret as an offer or acceptance and the other party does interpret it that way
What is the legal effect of an offer?
Creates a power of acceptance in the offeree
What is the legal effect of a rejection?
Terminates the power of acceptance
What is the legal effect of a conditional acceptance?
Terminates the power of acceptance, except under the UCC
What is the legal effect of a counteroffer?
Terminates the offeree’s power of acceptance and creates a new power of acceptance in the original offeror
What is the legal effect of acceptance?
Concludes the bargain if it is timely and in proper form
What is an offer?
Commitment or intention to be bound, containing definite terms, communicated to an identified offeree that invites that party to accept the terms
Who is the master of an offer?
The offeror
When is an offer effective?
When received and made known to the offeree
How does the addressee have the power to conclude a bargain if an offer has been made?
By entering the contract and binding the offeror if he gives assent in an appropriate way
Can a written offer be orally revoked?
Yes
What is shrinkwrap/click wrap?
Offer to grant a license that you agree to if you unwrap the disc/click the box, and become bound
Can silence by the offeree be an acceptance of an offer?
No, even if the offer states that it is
What are some ways that ambiguity in an offer can be resolved?
- ** UCC ***
- usage of trade
- course of performance
- custom
What are the four parts that constitute an offer?
- commitment
- communicated
- to an identified offeree
- containing definite terms
