PROMISES & AGREEMENTS Flashcards by Nimesha Perera

A owes B $50. In exchange for A’s payment of the debt, B makes a promise. Is this promise enforceable? 17(1)

No. B’s promise is without consideration.

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A signs a negotiable promissory note payable to B’s order, and C signs his name on the back without more. Is there a contract? 201(2)

Yes. Under Uniform Commercial Code § 3-402, C’s signature is an indorsement, and evidence of a contrary understanding is not admissible except for the purpose of reformation of the instrument. This conclusion does not rest on interpretation of the writing.

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If A writes to B, “I can quote you flour at $5 a barrel in carload lots.” in response to an inquiry specifying detailed terms, ending in “for immediate acceptance.” is this an offer? 26(3)

Yes, this is an offer. Without the immediate acceptance part, it is still probably considered an offer.

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A sends a letter to B stating the terms of a proposed contract. At the end he writes, “You can accept this offer only by signing on the dotted line below my own signature.” A replies by telegram, “I accept your offer.” Is there a contract? 30(1)

No, there is no contract.

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A, a clothing merchant, advertises overcoats of a certain kind for sale at $50. Is this an offer? 26

No, this is not an offer, but an invitation to the public to come and purchase.

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A writes to B, “I can quote you flour at $5 a

barrel in carload lots.” Is this an offer? 26.

No. This is not an offer, in view of the word “quote”

and incompleteness of the terms.

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A writes B, “I am eager to sell my house. I
would consider $20,000 for it.” B promptly
answers, “I will buy your house for $20,000
cash.” Is this a contract? 26.

There is no contract. A’s letter is a request
or suggestion that an offer be made to him.
B has made an offer.

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A sends B an offer through the mail to sell A’s
horse for $500. While this offer is in the mail,
B, in ignorance thereof, mails to A an offer to
pay $500 for the horse. Is there a contract? 23.

No, there is no contract.

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A writes to B, “I can quote you flour at $5 a
barrel in carload lots” made in
response to an inquiry specifying detailed terms. Is this an offer? 26.

Probably.

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A sends to B an offer to sell a specified lot for
$5,000, also stating terms as to Antime of
payment, mortgage security, taxes and
insurance. B is so anxious to buy the lot that,
without reading any of these additional terms,
he sends to A an unconditional acceptance. Is there a contract?

Yes, there is a contract on the terms stated in

A’s offer.

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A, a clothing merchant, advertises

overcoats of a certain kind for sale at $50. Is this an offer? 26.

No. This is not an offer, but an invitation to the

public to come and purchase.

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A writes to B, “I can quote you flour at $5 a

barrel in carload lots” made in response to an inquiry specifying detailed terms. Is this an offer? 26.

Probably.

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A writes to B, “I can quote you flour at $5 a

barrel in carload lots” with the addition of the following words: “for immediate acceptance”. 26.

This is an offer; the intent to make an offer is

unmistakable.

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A, a clothing merchant, advertises
overcoats of a certain kind for sale at $50. The advertisement contains the following
additional words “Out they go Saturday; First
Come First Served.” Is this an offer? 26.

Maybe. This might make the advertisement an offer.

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A promises to sell and B to buy all goods of a certain character which B shall need in his business during the ensuing year. Is providing the quantity to be sold sufficient enough to provide a basis for remedy to make this a certain and definite bargain? 33.

The quantity to be sold is sufficiently definite to provide a basis for remedy, since the promises are interpreted to refer to B’s actual good-faith requirements

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A sends a letter to B stating the terms of a
proposed contract. At the end he writes, “You
can accept this offer only by signing on the
dotted line below my own signature.” A
replies by telegram, “I accept your offer.” Is there a contract?

No. There is no contract.

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A writes B, “If you will mow my lawn next week, I

will pay you $10.” How can B accept this offer?

B can accept A’s offer either by promptly
promising to mow the lawn or by mowing it as
requested.

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A says to B: “If you finish that table you are
making and deliver it to my house today, I will
give you $100 for it.” B replies, “I’ll do it.” Is there a contract?

Yes. There is a contract. B could also accept by

delivering the table as requested.

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A mails a written order to B, offering to buy on
specified terms a machine of a type which B
regularly sells from stock. The order provides,
“Ship at once.” B immediately mails a letter of
acceptance. Is this an acceptance?

Yes. This is an acceptance by promise, even
though B might have accepted by
performance.

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A writes B, “If you will mow my lawn next week, I

will pay you $10.” How can B accept this offer? 32

B can accept A’s offer either by promptly
promising to mow the lawn or by mowing it as
requested.

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A says to B: “If you finish that table you are
making and deliver it to my house today, I will
give you $100 for it.” B replies, “I’ll do it.” Is there a contract? 32

Yes. There is a contract. B could also accept by

delivering the table as requested.

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Yes. This is an acceptance by promise, even
though B might have accepted by
performance.

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A publishes the following offer: “I will pay $50
for the return of my diamond bracelet lost
yesterday on State Street.” B sees this
advertisement and at once sends a letter to A,
saying “I accept your offer and will search for
this bracelet.” Is this an acceptance? 32

No. There is no acceptance.

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A writes to B, his nephew aged 16, that if B will
refrain from drinking, using tobacco, swearing,
and playing cards or billiards for money until he
becomes 21 years of age, A will pay B $5,000. B
makes a written reply promising so to refrain. Is there a contract? 32

There is probably no contract.

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A writes to B, his nephew aged 16, that if B will refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until he becomes 21 years of age, A will pay B $5,000. B makes a written reply promising so to refrain. B begins to refrain. Is there a contract? 32

Maybe. A may be bound by an option contract under § 45.

A writes to B, his nephew aged 16, that if B will refrain from drinking, using tobacco, swearing, and playing cards or billiards for money until he becomes 21 years of age, A will pay B $5,000. B makes a written reply promising so to refrain. B refrains until he becomes 21. Is there a contract? 32

Yes. A is bound to pay him $5,000.

A mails a written order to B, offering to buy specified machinery on specified terms. The order provides, “Ship at once.” B immediately ships the machinery as requested. Is this sufficient acceptance? 32

Yes. This is a sufficient acceptance to form a | contract.

A mails a written order to B, offering to buy specified machinery on specified terms. The order provides, “Ship at once.” B immediately mails a letter to A, saying “I accept your offer and will ship at once.” B ships non‐ conforming machinery. Is this a sufficient acceptance? 32

YES. The shipment is both an acceptance forming a contract and a breach of that contract.

No. This is a sale of goods. The shipment is a counteroffer that A has the power to accept.

A, who is about to leave on a month's vacation, tells B that A will pay B $50 if B will paint A's porch while A is away. B says he may not have time, and A says B may decide after A leaves. If B begins the painting, is there an acceptance? 50

Yes, there is an acceptance by performance which operates as a promise to complete the job.

A makes an offer to B, who dies after receiving it. Can B's executor, within permitted time, accept? 52

No, his executor, though acting within the permitted time, cannot accept.

No. Neither B nor C has accepted A's offer

A sends B an order for goods. C, from whom A has previously refused to buy such goods, has purchased B's business. Without notifying A of the change of proprietorship, C ships the goods as ordered. If, before using the goods, A discovers that they have come from C and either keeps them or uses them. Is this an acceptance and a contract?

Yes. A's retention or use of them is an acceptance of an offer from C, and a contract arises.

A offers to sell a book to B for $5 and states that no other acceptance will be honored but the mailing of B's personal check for exactly $5. B personally tenders $5 in legal tender, or mails a personal check for $10. Is there a contract? 58

No, there is no contract.

A offers to pay B $100 for plowing Flodden field, and states that acceptance is to be made only by posting a letter before beginning work and before the next Monday noon. Before Monday noon, B completes the requested plowing and mails to A a letter stating that the work is complete. Is there a contract?

No. There is no contract. They started work before they were supposed to!

A makes an offer to B, and B in terms accepts but adds, “This acceptance is not effective unless prompt acknowledgement is made of receipt of this letter.” Is there an acceptance and a contract? 59.

No. There is no contract, but a counter‐offer.

A makes a written offer to B to sell him Blackacre. By usage the offer is understood as promising a marketable title. B replies, “I accept your offer if you can convey me a marketable title.” Is there a contract? 59

Yes, there is a contract. This is not an acceptance made to depend on a different or additional term - the title is something expected anyway. Not a counteroffer.

A makes an offer to B and adds: “This offer will remain open for a week.” B rejects the offer the following day, but later in the week purports to accept it. Is there a contract? 38.

No. There is no contract unless the offer was itself a contract. B's purported acceptance is itself a new offer.

No. There is no contract unless A's offer was itself a contract or unless A's reply to the counter-offer manifested an intention to renew his original offer.

A offers B to sell him a parcel of land for $5,000, stating that the offer will remain open for thirty days. B replies, “I will pay $4,800 for the parcel,” and on A's declining that, B writes, within the thirty day period, B replies, “Won't you take less?” A answers, “No.” B accepts the original offer within thirty days. Is there a contract? 39.

Yes. An acceptance thereafter by B within the thirty-day period is effective. B's inquiry was not a counter-offer, and A's original offer stands.

A offers B to sell him a parcel of land for $5,000, stating that the offer will remain open for thirty days. B replies, “I will pay $4,800 for the parcel,” and on A's declining that, B writes, within the thirty day period, “I am keeping your offer under advisement, but if you wish to close the matter at once I will give you $4,800.” A does not reply, and within the thirty-day period B accepts the original offer. Is this an effective acceptance that creates a contract? 39.

Yes. B's acceptance is effective.

A makes a written offer to sell B a patent in exchange for B's promise to pay $10,000 if B's adviser X approves the purchase. B signs the writing in a space labelled “Accepted:” and returns the writing to A. B has made a conditional promise and an unconditional acceptance. Is there a contract? 59.

Yes. There is a contract, but B's duty to pay the price is conditional on X's approval.

A offers to sell B 100 tons of steel at a certain price. B replies, “I accept your offer. I hope that if you can arrange to deliver the steel in weekly installments of 25 tons you will do so.” Is there a contract? 59.

Yes. There is a contract, but A is not bound to | deliver in installments.

A offers to sell specified hardware to B on stated terms. B replies: “I accept your offer; ship in accordance with your statement. Please send me also one No. 5 hand saw at your list price.” Is this a counter-offer? 59.

No. The request for the saw is a separate offer, not | a counter‐offer.

Day 1: R dispatches offer to sell 100 widgets to E. Day 2: E dispatches acceptance. Day 3 passes. Day 4 passes. Day 5 passes. Not hearing from E, R sells widgets to another buyer and dispatches his revocation to E. Day 6: E receives revocation, and calls R, explaining that he dispatched his acceptance days ago. Day 7, R finally receives acceptance. Result?

Contract formed on Day 2 when | acceptance is sent.

Day 1: R dispatches offer to sell 100 widgets to E. Day 2: E dispatches acceptance. Day 3 E changes mind, dispatches rejection, which overtakes E's acceptance in the mail. Day 4, R recieves rejection, and sells widgets elsewhere. Day 5, R recieves acceptance. Result?

Contract formed on Day 2 when acceptance is sent; however, may be estopped from enforcing contract because of detrimental reliance. Unfair!

Day 1: R dispatches offer to sell 100 widgets to E. Day 2: E dispatches rejection. Day 3 R dispatches revocation. Day 4, R recieves E's rejection. Day 5, E recieves R's revocation. Result?

No contract; rejection on Day 4.

Day 1: R dispatches offer to sell 100 widgets to E. Day 2: E dispatches rejection. Day 3: E changes mind, and dispatches acceptance. Day 4: R recieves E's rejection. Day 5: R recieves E's acceptance. Result?

No contract; rejection on Day 4.

Day 1: R dispatches offer to sell 100 widgets to E. Day 2: E dispatches rejection. Day 3: E changes mind, and dispatches acceptance, which overtakes E's rejection in the mail. Day 4: R recieves E's acceptance. Day 5: R recieves E's rejection. Result?

Contract on Day 4 when acceptance is | received.

A makes B an offer by mail. B immediately after receiving the offer, mails a letter of rejection. Within the time permitted by the offer, B accepts. Is there a contract? 40.

This acceptance creates a contract only if received before the rejection, or if the power of acceptance continues under option contract, counter offer, or if offerror is OK with it.

A makes a written offer to B to sell him a piece of land. The offer states that it will remain open for thirty days and is not subject to countermand. The next day A orally informs B that the offer is terminated. Can B still accept?

B's power of acceptance is terminated unless | the offer is an contract under an option contract.

A makes an offer to buy goods from B, and later requests B not to deliver the goods until A is in a better condition to handle them. Is there still an offer?

Yes. The request does not revoke the offer

A makes an offer to B, and later says to B, “Well, I don't know if we are ready. We have not decided, we might not want to go through with it.” Is there still an offer?

The offer is revoked.

A offers a parcel of land to B at a stated price, and gives B a week in which to consider the proposal. Within the week A contracts to sell the parcel to C, and B is informed of that fact by a tenant of the premises. B nevertheless sends a formal acceptance which is received by A within the week. Is there a contract?

There is no contract between A and B

A offers to employ B to replace C, an employee of A who has given A a month's notice of intention to quit. A gives B a week to consider the proposal. C changes his mind and makes a contract with A for continued employment for a year. B asks C about his duties, and C informs B of the new contract. B immediately mails a letter of acceptance to A, which arrives within the week allowed for acceptance. Is there a contract?

There is no contract between A and B

A offers to sell B a hundred shares of stock at a fixed price, and states that the offer will not be revoked for a week. Within the week C offers A a higher price for the same stock, and B learns of the higher offer. Can B still accept the offer?

B's power of acceptance is not terminated, since he is entitled to assume that A will honor his commitment regardless of its legal effect.

A offers to buy cotton from B, the operator of a cotton gin, B to accept by specifying the number of bales in a telegram sent before 8 p.m. the same day. B duly sends a telegram of acceptance and ships the cotton, but the telegram is not delivered. Is there a contract?

Yes. There is a contract, and A is bound to take and | pay for the cotton. Acceptance upon dispatch.

A mails to B an offer to lease land, stating, “Telegraph me Yes or No. If I do not hear from you by noon on Friday, I shall conclude No.” B duly telegraphs “Yes,” but the telegram is not delivered until after noon on Friday. Is there a contract?

Any contract formed by the telegraphic | acceptance is discharged. He never sent it out!

A mails an offer to B to appoint B A's exclusive distributor in a specified area. B duly mails an acceptance. Thereafter B mails a letter which is received by A before the acceptance is received and which rejects the offer and makes a counter‐ offer. On receiving the rejection and before receiving the acceptance, A executes a contract appointing C as exclusive distributor instead of B. Is there a contract?

No. B is estopped to enforce the contract.

A sends B by mail an offer dated from A's house and states as a condition of the offer that an acceptance must be received within three days. B mails an acceptance which reaches A's house and is delivered to a servant or is deposited in a mail box at the door within three days; but A has been called away from home and does not personally receive the letter for a week. Is there a contract?

Yes. There is a contract

A mails a written order to B for goods to be manufactured specially for A, and requests B to begin at once since manufacture will take several weeks. If B begins, is there an acceptance? When can A revoke? 54

- Acceptance is complete when B begins. - A's contractual duty is discharged and he may treat the offer as having lapsed before acceptance. - Unless within a reasonable time B sends notification of acceptance or unless the offer or a prior course of dealing indicates that notification is not required.

A, the proprietor of a medical preparation, offers $100 to anyone who contracts a certain disease after using the preparation as directed. B uses it as directed. Has B accepted the offer and is there a contract? 54

Yes. B has accepted the offer, and is entitled to the $100 if she later contracts the disease. No notification to A is required until after B has contracted the disease.

A, a newspaper, requests B to discontinue distribution of a rival newspaper, and offers to pay B $10 per week as long as B abstains from such distribution. B discontinues the distribution. Has B accepted the offer? 54

Yes. B has accepted the offer, and no notification to A is required.

A promises B in return for $100 paid that A will sell B 100 shares of stock in a specified corporation for $5,000 at any time within thirty days that B selects. Is there an option contract? 25.

Yes. There is an option contract under which B has | an option.

A offers to sell B Blackacre for $5,000 at any time within thirty days. Subsequently A promises in return for $100 paid or promised by B that the offer will not be revoked. Is there an option contract? 25.

Yes. There is an option contract under which B has | an option.

B owes A $5000 payable in installments over a five‐year period. A proposes that B discharge the debt by paying $4,500 cash within one month, but reserves the right to refuse any such payment. Is there an offer? 45.

A has not made an offer. A tender by B in | accordance with the proposal is an offer by B.

A, an insurance company, issues a bulletin to its agents, entitled “Extra Earnings Agreement,” providing for annual bonus payments to the agents varying according to “monthly premiums in force” and “lapse ratio,” but reserving the right to change or discontinue the bonus, individually or collectively, with or without notice, at any time before payment. Is there a promise or an offer? 45.

There is no offer or promise

While A and B are engaged in conversation, A makes B an offer to which B then makes no reply, but on meeting A again a few hours later B states that he accepts the offer. Is there a contract? 41.

There is no contract unless the offer or the circumstances indicate that the offer is intended to continue beyond the immediate conversation.

A makes B an offer by mail to sell goods. B receives the offer at the close of business hours and accepts it by letter promptly the next morning. Is this a timely acceptance?

Yes. The acceptance is timely.

A sends B an offer by mail to sell a piece of farm land. B does not reply for three days and then mails an acceptance. Is this acceptable?

Depends! It is a question of fact under the circumstances of the particular case whether the delay is unreasonable.

A gives several lessons on the violin to B's child, intending to give the child a course of twenty lessons, and to charge B the price. B never requested A to give this instruction but silently allows the lessons to be continued to their end, having reason to know A's intention. Is this a contract? 69.

B is bound to pay the price of the course

A offers by mail to sell to B a horse, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.” B makes no reply, but he does not intend to accept. Is there a contract? 69.

No. There is no contract.

A offers by mail to sell to B a horse, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.” B makes no reply and remains inactive with the intention of thereby expressing his acceptance. Is there a contract? 69.

Yes, there is a contract.

A offers by mail to sell to B a horse, saying: “I am so sure that you will accept that you need not trouble to write me. Your silence alone will operate as acceptance.”B replies by return mail, saying: “I accept your offer.” Is there a contract? 69.

Yes. There is a contract.

A, through salesmen, has frequently solicited orders for goods from B, the orders to be subject to A's personal approval. In every case A has shipped the goods ordered within a week and without other notification to B than billing the goods to him on shipment. A's salesman solicits and receives another order from B. A receives the order and remains silent. B relies on the order and forbears to buy elsewhere for a week. Is there a contract? 69.

Yes. A is bound to fill the order.

No. There is no contract between A and B.

Firm Offer Rule - #5 Way an Option Contract is Created

Option contract is created. An offer is firm and irrevocable if it is an offer to buy or sell goods made by a merchant and it is in writing and signed by the offeror.