Sales & Contracts

Question 1

Two rules for mixed purpose K

Answer 1

1) All or nothing rule = must be either UCC or CL (exception divisible Ks can be divided)
2) Predominant purpose Test

Question 2

Contract Formation - Offer Defintion

Answer 2

Manifestation of a willingness to enter into an agreement by the offeror that creates a power of acceptance in the offeree

Question 3

Contract Formation - Offer General Rules

Answer 3

• Governed by an objective test
• Directed at specific offeree (unless contest or reward)
• Specificity in offer (CL = parties, subject, price, quantity; UCC = quantity)
• Conveys power of acceptance to other side (IE not invitations to deal/advertisements without high level of specificity)

Question 4

6 ways to terminate an offer

Answer 4

1) Revocation - express comx to offeree
2) Constructive revocation = offeree learns offeror has taken an action inconsistent with continuing ability to contract
3) Rejection by offeree
4) Counter offer by offeree
5) Death
6) Time

Question 5

4 ways to create an irrevocable offer

Answer 5

1) Option = extra consideration to keep open
2) Firm offer for UCC/merchants & must = written, signed by offeror, explicit promise not to revoke (open for time stated or not over 90)
3) Unilateral K = once performance has begun
4) detrimental reliance = offeree reasonably and detrimentally relies on offer in some foreseeable manner

Question 6

Counter-Offers under CL

Answer 6

Must mirror image
Conditional acceptance is another form of C.O

Question 7

Counter-Offers UCC 2-207

Answer 7

• Definite & seasonable acceptance or written confirmation within reasonable time is acceptance
• UNLESS acceptance is expressly made conditional upon assent to add or diff terms
• Addt’l terms (only for merchants) = new terms control if both parties merchants, doesn’t materially alter deal, no limit in OG offer, offeror doesn’t reject in reasonable time
• Knock out rule = maj conflicting terms knocked out with gap fillers, min initial offer controls
• Acceptance based on conduct w/out real K existing is ok and conflicting terms supplied by UCC
• Early agreement + written confirmation do analysis of addt’l terms

Question 8

Acceptance defintion

Answer 8

Manifestation of a willingness to enter into the agreement by the offeree

Question 9

Acceptance general rules

Answer 9

• Objective test
• Accepted according to terms of offer
• UCC rule for non-conforming goods = acceptance + breach
• Know about offer
• Communication of acceptance to other party (subrules = mailbox & silence)

Question 10

Acceptance - mailbox rule

Answer 10

• Acceptance by mail is effective upon sending
• Doesn’t apply to: other comx (rejections, revocations, etc), if offeree sends rejection first they lose MBR protections, option K, other media is iffy

Question 11

Acceptance by silence is allowed when

Answer 11

• Unilateral reward offer or contest
• Unilateral offer where parties are close in geographic location
• Past history of silence serving as acceptance
• If offer says silence AND offereee intends to accept via silence

Question 12

Acceptance - implied in fact K

Answer 12

• Comx an acceptance without writing or speaking and using gestures/actions creates implied in fact K
• I.E haircut example

Question 13

Consideration defintion

Answer 13

Bargained for consideration

Question 14

Consideration - 3 q to ask in determining if consideration exists

Answer 14

Who is making th epromise that needs to be supported by the law
Is there a benefit to the promisor OR a detriment to the promisee
Was this bargained for

Question 15

Tricks regarding consideration

Answer 15

• Pretense (nominal) is a no
• Illusory promise = one side is not committing to death under obj test
• Past consideration
• Promising not to sue (unless settling a legal claim and P has good faith belief in validity OR reason to doubt validity due to uncertain law)

Question 16

K modification - common law (+ debt obligation rule)

Answer 16

• Need new consideration under the pre-existing duty rule
• Exceptions = change in performance, 3rd party promising to pay or unforeseen difficulties that would excuse performance
• Partial payment for release from a debt obligation needs new consideration if the debt is due and undisputed

Question 17

K modification - UCC

Answer 17

Need good faith (no consideration)

Question 18

Consideration substitutes (3)

Answer 18

1) Promissory estoppel = one party makes a promise & other party relies on promise to take action
Elements: Reasonably expected to induce reliance, promisee takes a detrimental reliance and injustice can only be avoided by enforcement

2) Quasi-Contract (or K implied in law)
Elements = P confers a measurable benefit on the D, P reasonably expected to get paid and it would be unfair to let D keep benefit without paying

3) Moral obligation + subsequent promise (limited juris)