Page 8 Flashcards
A unilateral contract is formed when an offeree does what?
Completes performance
What is the implied condition to a unilateral contract that is formed when an offeree completes performance?
The offeror had notice of the offeree’s performance within a reasonable time
If performance of a unilateral contract has happened in full, but there hasn’t been a notification, what happens?
The offeror’s obligation is discharged because of the failure
What must be used to give notice of a unilateral contract performance?
Reasonable diligence
On Feb 1 you write to your friend saying if he will guarantee your mom’s debt you will reimburse him for any losses.
On March 1 he guaranteed to Costco a debt of your mom and on March 3, before he gave you notice, you phone him and revoke the offer. Is that effective?
No, because the contract was formed when he completed performance by making the guarantee, and a reasonable time to notify you had not yet elapsed
What is the exception when notice isn’t required for a unilateral contract performance?
- the offeror expressly/impliedly waives notice
- performance would come to his attention within a reasonable time in the normal course of things
- performance does come to his attention within a reasonable time
If you begin a requested performance on a contract for the sale of goods, and don’t notify the offeror within a reasonable time, what happens?
He can treat the offer as having lapsed before acceptance
If you perform a requested act without knowledge of the offer, is there a contract?
No
What is the minority rule in reward cases?
A contract is formed even if the offeree doesn’t know about the offer, because people should be encouraged to do good things in hope of getting a reward
If the offer wasn’t your principal motive for performing, has a contract still been formed?
Yes
What is the exception to the rule that an offer doesn’t have to be your primary motive for performance in order for a contract to still be formed?
If an act is done involuntarily, there’s probably no contract
If someone offers a reward for information about a burglary and a friend of the burglar knows about the reward and is questioned by the police, then threatened and gives up information that leads to the arrest of the burglar, would he be able to collect the reward?
Probably not, because he probably acted involuntarily, and that wouldn’t form a contract
If a general contractor uses a sub-contractor’s bid, what is the way to accept?
Through assent, not the act of using the bid
In a bilateral contract, what kind of intent to accept is irrelevant?
Subjective
Bilateral offers require communication of acceptance of a promise to perform, but what is the other acceptable way?
Can be by silence if acceptance is implicit and the relationship of the parties justifies it, or if the parties mutually agreed on it
Bilateral contracts can only be accepted by what?
A promise, not an act
Who is the master of an offer?
Offeror
Does a bilateral promise have to be verbal?
No, it can be implied from conduct, or an act that was designated by the offer to show a promise
On January 2 you say to Phil that you will pay him $500 to paint your house if he finishes by January 10 and you tell him he has to promise by January 5. On January 4 he starts painting while you are away, then January 5 you call and revoke. Is there a contract?
No because your offer was a bilateral one and can only be accepted by a promise, so since Phil made no promises, the revocation is effective
On January 2 you say to Phil that you will pay him $500 to paint your house if he finishes by January 10 and you tell him he has to promise by January 5. On January 4 he starts painting while you are away, then January 5 you call and revoke. Is there a contract based on reasonable reliance?
No, because it was unreasonable for Phil to start painting before accepting your offer, and only reasonable reliance prevents an offer from being revoked
If you’re next to your fence and you tell your neighbor you’ll give him $200 if he agrees to paint it, and he picks up a brush and starts painting, has a contract been formed?
Yes because your offer required acceptance by promise, and under those circumstances a promise was implied
On Nov 1 you send a purchase order to Fran for a machine with shipment on Dec 1 that says the order becomes a contract when approved by her CEO. On Nov 3 the CEO gives approval, and Nov 4, before Fran has given notice of approval, you call and revoke. Is the revocation effective?
No, because the contract was formed when the CEO gave approval
What are the testable components of a bilateral acceptance?
- commitment
- communicated the right way
- effective on dispatch
If a commitment doesn’t perfectly match what was offered, it is considered what?
A new/different term
What are the two ways an acceptance can be communicated?
- the way the offer says
- or if it is silent, it can be accepted the same way it came or using another reasonable method
What is considered a reasonable method when it comes to accepting an offer?
- one that is as fast or faster
- and as legally dependable as the way the offer came
If an offer comes in a letter with no acceptance stipulations, can you send it by fax?
Yes, because that is speedier and just as legally dependable
The mailbox rule only applies as long as what about delivery charges?
- delivery charges must be prepaid
- mail must be properly addressed
Does the mailbox rule only apply to mail?
No, it applies to any proper acceptance, like fax, telegram, messenger (with a few major exceptions)
What are the major exceptions to the mailbox rule?
- if the offer says it has to be received to be effective
- option contracts, where acceptance has to be received within the option period to be effective
If an offer says that acceptance has to be received by a certain time, does that overcome the mailbox rule?
No, it must say that acceptance has to be received to be effective in order to overcome the mailbox rule
If silence would be deceptive, there is a duty to do what?
Speak
What does silence mean in contracts?
Inaction
The general rule is that silence of an offeree is not acceptance with what exceptions?
- the offeree leads the offeror to think that silence means acceptance
- silence coupled with subjective intent to accept
- exercise of dominion over goods
- free samples
If you are a book collector and you tell a dealer that if he finds any books he thinks you will like, he should send them to you at a proposed price, and if you don’t return them, then you have accepted the price. Can that be an exception to silence not being a proper acceptance?
Yes
If an offeror says that silence is an acceptance, and you stay silent with subjective intent to accept, is your silence OK?
Yes
If an offeree improperly exercises dominion over goods that are sent to him for his approval, then what happens?
He is contractually bound to buy them, unless the price is unreasonable
Free samples that are clearly marked or things mailed that are not ordered, can be treated as what?
Gifts, and the person has the right to keep them or do whatever he wants with no obligation to the sender
Are you allowed to say, “I will sell you my car, and if I don’t hear from you, then you have accepted”?
No
If an insurance company takes an applicant’s form and holds it for an unreasonably long time without making a decision, and the applicant suffered loss, the insurer is liable for what?
if he failed to reject the application in a timely manner
Late acceptance is considered what?
A counteroffer
If late acceptance happens, good faith and fair dealing require the original offeror to do what?
Notify the original offeree that the acceptance is too late, and if that doesn’t happen, the late acceptance is deemed accepted by the silence
What are the situations when problems of notice arise?
- completed performance
- contracts for sale of goods
- performance without knowledge of offer
- offer not principal motive for performance
- sub-contractor’s bid
What is “benefit of services”?
When an offeree takes the benefit of services with a reasonable opportunity to reject them and reasonably knows they were given with an expectation of compensation
If prior dealings between the parties lead the offeror to think the offeree would accept all offers unless he sends notice to the contrary, is silence allowed?
Yes
Must an offeree reject an unwelcome offer?
No
Under the UCC an offer is accepted by what two ways?
Accepting the prompt promise to ship, or prompt shipment of conforming/nonconforming goods
Under the UCC, if an offeree chooses to accept by shipment, what must he do?
Notify the offeror that shipment was made within a reasonable time
Under the UCC with non-conforming goods, the buyer has what options?
He can reject the goods, or take delivery and sue for damages
UCC - if a sender seasonably notifies buyer that shipment is just an accommodation, is there a breach?
No, nonconforming goods are treated as a counteroffer
Can full performance before termination of offeree’s power of acceptance be an acceptance?
Yes, if notification within the time allowed for accepting performance is given
If someone writes to you saying they will pay a hundred dollars for you to plow their field if you accept by Monday, and you say nothing but complete by Sunday, and then notify on Monday, is there a contract?
Yes, because the offeror was not prejudiced by getting the wrong kind of acceptance
If you ask a plumber to fix your faucet, and he does it, the request was an offer to pay what amount?
The plumber’s usual rates as long as they weren’t unreasonable
What are the elements of unjust enrichment?
- a benefit was conferred with expectation of payment
- D knew/had a reason to know of the expectation
- D would be unjustly enriched if allowed to keep the benefit without paying
How can you accept an order for prompt shipment?
Either promptly promise to ship, or promptly ship (but be certain to notify within a reasonable time that shipment has begun)
When is acceptance effective for parties at a distance?
When it is communicated
What is the mailbox rule?
Acceptance is effective and a contract is formed when it is put out of the possession of the offeree (dispatch)
If an acceptance gets lost in the mail and doesn’t reach the offeror, how does the mailbox rule deal with that?
Still effective on dispatch
When is a rejection effective?
When received
If dispatch of an acceptance is not timely, what happens?
It is ineffective and becomes a counteroffer putting power of acceptance in the original offeror
Acceptance by mail is reasonable when parties are negotiating at a distance unless what?
There is some reason for speed, like rapid changes in price
Acceptance by fax or email is reasonable if what is involved?
A confirmation message that it was successfully transmitted
If the medium that was used for an acceptance was unreasonable or the person didn’t use reasonable care, then it is not effective until what?
It actually arrives
If an acceptance was not properly addressed, when is it effective?
On dispatch only if it gets received within a time that a properly addressed one would have arrived, if it is later than that, it’s not effective until received
If prior dealings between the parties lead the offeror to think the offeree would accept all offers unless he sends notice to the contrary, is silence allowed?
Yes
Under the UCC an offer is accepted by what two ways?
Accepting the prompt promise to ship, or prompt shipment of conforming/nonconforming goods
