Types of Contracts Flashcards
Option Contracts Are…
General features
Their own mini contract that requires consideration of value, though not necessarily money, in order to ensure a contract remain open to the paying party for the specified amount of time.
It can be embeded in a larger contract or freestanding
Options
Beall v. Beall
Major Topical Rule
An option supported by consideration is a non-revokable offer for the set amount of time
Options
UCC § 2-205
FIRM OFFER RULE: An offer by amerchantto buy or sellgoodsin a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months; but any such term of assurance on a form supplied by the offeree [also a merchant] must be separately signed by the offeror.
Options
BoC Eastern Michigan University v. Burgress
Acknowledgment of consideration does not necessarily prevent the claim of lack of consideration though it does create a rebuttable presumption of consideration
*The acknowledgment of consideration is a document signed to recognize transmission of consideration and is only in some states. *
Restatement Second of Contracts § 45
OPTIONS CONTRACT CREATED BY PART PERFORMANCE OR TENDER
1. Where an offer invites an offeree to accept by rendering a performance and does not invite promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it.
2. The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.
Only applies to contracts accepted by performance with no option for promise
Options
Restatement Second of Contracts § 87
OPTION CONTRACT
(1) An offer is binding as an option contract if it
(a)is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or
(b)is made irrevocable by statute.
(2)An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.
Options
An adhesion contract is a …
Generally
A consumer contract that is not negotiable on the part of the consumer.
Service contract and online agreements are common examples
Adhesion Contracts
In an adhesion contract a term is not enforcable generally when it is…
unexpected but buried in other text or otherwise hidden
Adhesion Contacts
In an adhesion contract a term is enforcable generally when it is…
Expected or unxpected but pointed out especially with additional action required like inital or check agree
Adhesion Contracts
Types of Adhesion Contracts
(1) browsewrap (2) clickwrap (3) scroll wrap(4) sign-in wrap
Adhesion contracts
Browserwrap Contracts…
Generally
Generally not enforceable
Commonly used by websites
State that by using the website the user assents to the site’s Terms and conditions, often presented via a hyperlink
Adhesion contracts
Clickwrap Contracts…
Generally
Generally are enforcable
Uses some kind of pop-up that requires action like checking a box
Simply, click here to agree to XXX’s terms and conditions
Adhesion Contracts
Scrollwrap Contracts…
Generally
Generally are enforcable
Prefered to Clickwrap contracts
Users must scroll through the body of a contract before getting to the “I agree” button
Apple contracts work like this
Adhesion Contracts
Sign-In Wrap Contracts…
Generally
Generally are enforceable
see Berkson v. Gogo
A hybrid of Browsewrap and Clickwrap.
It notifies users that the service or product they are purchasing is subject to hyperlinked terms but it does not force the user to click “accept” to its terms.
Ahesion contracts
Berkson v. Gogo
A sign-in-wrap agreement is enforceable if the website puts a reasonably prudent user notice of the terms of the agreement and the terms are readily available to the user.
Adhesion contracts
