UCC and Restatement Rules Flashcards
Restatement 71 Consideration
Mutual Reciprocal Inducement
1) Benefit to the Promisor
2) Detriment to the Promisee
3) bargained for exchange
Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless:
A) (subjective) The claim or defense is in fact doubtful because of uncertainty as to the facts or the law, or
B) (objective) The forbearing or surrendering part believes reasonably that the claim or defense may be fairly determined to be valid
Bilateral Contract
K where both parties make promises
Unilateral Contract
K in which the promisor has sought performance in exchange for a promise
Remedies
1) Expectancy (preferred)
2) Restitution
3) Reliance
Restatement 86
Promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice
Non compete covenant acceptable when
Reasonable
a) Duration
b) Geographic Scope
c) Range of Activities
and
Consideration
Subjective satisfaction clause-
Must be an honest dissatisfaction not necessarily reasonable
Objective Satisfaction
You made me these widgets and they dont fit in the hole
Promissory Estoppel
1) Promise
2) Reasonable reliance
A promise which the promisor should reasonably expect to induct action or forbearance on the part of the promisee or a third person and which does induce such action or forebearamce is binding if injustice can be avoided only by enforcement of the promise. the remedy granted for breach may be limited as justice requires.
Restatement 74
1) Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless:
a) (Objective) the claim or defense is in fact doubtful because of uncertainty as to the facts of law
(b) (Subjective) the forbearing or surrendering party reasonably believes that the claim or defense may be fairly determined to be valid.
Restatement 87 Option Contract
(1) . 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
(2) . Is made irrevocable by statute.
-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
Option contracts survive death because they are contracts
Contract
promise or set of promise for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes a duty
Conditional K
promise is conditional if the performance will be become due only if a particular event, known as a “condition” occurs. Does not mean that the promise is not binding until the event occurs, only that the event must occur before performance must be done
Offer
statement which (1) reasonably appears (2) to be presently bound (3) to a definite commitment (4) upon Offeree (E)’s acceptance
Requirements of Offer
(1) manifestation of present contractual intent; (2) certainty and definiteness of terms; (3) communication to E
Mistaken Bid
Not valid if (1) non-mistaken party s/have known OR (2) a) honest or clerical mistake, b) performance results in undue hardship, c) non-mistaken party can be restored to SQA. (R.2d§153
Termination of Offer
1) Lapse of Offer
2) Offeror’s revocation
3) Death/incapacity
4) Offeree’s rejection
Family K
Often not enforceable, gifts assumed to be motivated by altruism, not bargains for gain
Illusory Promise
Performance by O is optional not enforceable
Rewards
Promise needs to be completed prior to action for it to be considered as consideration (feinberg case)
Requirements or output K
Looks illusory but enforceable as long as promises to buy requirements or to sell output it is made in good faith UCC 2-306
Exclusive Dealing K
looks illusory, but is enforceable, promise to use “best efforts” to supply/promote goods must be done in good faith UCC 2-306(2) (Wood v. Lucy, Lady Duff Gordon)
Revocation of Offer
Valid prior to acceptance, except for option contract or firm offer
Revocation by communication
Offeree’s power of acceptance is term’d upon receipt from Offeror or manifestation of an intent not to enter into the proposed K
Revocation of general offers
Offeror can be required to give notice of revocation in exact manner of offer,
but not bound by acceptance of offeree
who was aware of the offer but missed notice of revocation
mailbox rule
Default Rule, Acceptance effective upon dispatch. Revocation/rejection effective when received.
Firm Offer UCC 2-205
Promise to keep offer open w/o consideration enforceable if (1) made by merchant (2) in writing (3) for the sale of goods and (4) accepted w/in 3 mos
