Offer & Acceptance
The proposal to enter into a contract is called an offer and the person who makes it is called the _______. The party to whom the offer is made is called the ________.
Offeror & Offeree
This theory of consideration recognizes that contracts are voluntary exchange relationships where a performance or return promise is said to be a _____________ if it is sought by the promisor in exchange for his promise and is given by the promise in exchange for that promise. Meaning, the consideration induces the making of the promise, and the promise induces the furnishing of the consideration.
Bargained-for-exchange
A ______ contract is formed when the parties manifest their agreement explicitly by words.
Express
Since Article 2 does not address every issue which might arise in a transaction involving the sale of goods, the general principles of law and equity are supplemented by ________.
The Common Law
A contract between two parties may be ________ when the intent to enter a contract is not manifested by direct or explicit words but instead is determined by implication from the conduct of the parties, the language used, or other surrounding circumstances.
Implied-In-Fact
This type of contract refers to when only one party makes a promise – the offerors promise is in the offer and the offeree can only accept by performance.
A Unilateral Contract
True or False: This concept in consideration refers to the idea that each party must give something of value, and it does not have to be equal, but it must be legally sufficient
False: Courts do not inquire into the adequacy of consideration if the exchange is bargained for.
A contract is said to be _____ when its breach entitles the nonbreaching party to damages, either legal or equitable
Enforceable
Under the ______ a contract may be found even though the precise moment of its making is undetermined, and it may be formed in any manner sufficient to show agreement.
This limits the offeror’s power to revoke by making the offer irrevocable. However, this section only applies if (1) an offer has been made (2) it has been made by a merchant (3) to buy or sell goods (4) which gives assurances that it will be held open (4) in a signed writing (5) which is for the time stated, or for a reasonable time if no time is stated, up to a maximum of three months.
Firm Offer
This legal doctrine allows a party to enforce a promise even without an offer or acceptance, provided the promise has reasonably relied on the promise to their detriment. There are four requirements which must be met to invoke this doctrine: First, there must have been a promise; Second, the promise must actually rely on the promise; Third, the promisee’s reliance must have been reasonably foreseeable to the promise, even though the promisor may not have bargained for it; and Fourth, the circumstances must be such that injustice can be avoided only be enforcement of the promise.
Promissory Estoppel
This type of contract refers to when the seller agrees to sell and the buyer agrees to buy all the goods of a particular kind that the buyer requires in its business. This type of agreement assures the buyer of a steady supplier for the goods it needs.
Requirements Contract
A contract is considered ______ when it results in no legal obligation on the part of the promisor. It is also accurate to say that no contract has been formed.
Void
Under this body of law, if there is lack of consideration in a contract modification, it is generally required that there be new consideration for the modification to be enforceable.
Common Law
This principle under the UCC allows an agreement to be enforceable even if the price term is left open, as long as the intention to contract is clear. This contrasts with common law, where an indefinite price term would typically render a contract void for lack of clear and definite terms.
Gap-filler rule (UCC §2-305)
This rule states that if the offer seeks _______________ and not a return promise, then a contract can be formed only by performing the requested performance. When the offeree tenders or begins the invited performance, the offer becomes “irrevocable” to allow the offeree a reasonable time to complete the performance.
Acceptance by Performance (where it is the exclusive method of acceptance)
If the contract involves personal services, where the taste or judgment of the individual is involved, then _______ is required. If the contract involves a commercial contract, such as one involving manufacturing or construction, then _________ is required.
subjective satisfaction & objective satisfaction
A contract is _______ if one or more of the parties have the power to avoid the legal obligations imposed by the contract.
Voidable
Under ________ an acceptance must be the “mirror image” of the offer or it is a rejection of the offer and may be a counteroffer. However, ________ is far more forgiving in finding an agreement and a contract may be formed even if the acceptance states terms additional to or different from the offer.
Common law & UCC
Under this contract law doctrine, acceptance of an offer is considered effective when it is dispatched by the offeree, rather than when it is received by the offeror. This rule applies unless the offer explicitly requires a different method of communication or is an option contract where the offeror specifies that acceptance must be received. The rule is designed to protect the offeree by allowing them to accept the offer without waiting for the offeror's acknowledgment.
The Mailbox Rule
In this case, where an ad for a fur piece was found to be an offer, the court found that the department store’s ad containing the words, “1 Black Lapin Stole… worth $139.50…$1.00 First Come First Served” was sufficiently clear, definite, and explicit and left nothing open for negotiation.
Lefkowitz v. Great Minneapolis Surplus Store, Inc
In this case, the court determined that a nephew's promise to refrain from legal activities, such as drinking and using tobacco, was sufficient consideration for his uncle's promise of $5,000, even though the nephew did not perform an act.
Hamer v. Sidway
In this case, a company advertised that it would pay a reward to anyone who used its product as directed and still contracted the flu. The court rules that the advertisement constituted an offer for a unilateral contract, where acceptance occurred when the offeree performed the conditions of the offer by using the product, despite the absence of a formal acceptance.
Carlill v. Carbolic Smoke Ball Co.
In this case, the parties had entered into a contract with the original expectations that refuse-producing dwelling units would increase at a rate of 20 to 25 per year but after the contract was signed, the city experienced a substantial and unanticipated increase of 400 new dwellings. The court addressed whether the pre-existing duty rule—which usually prevents a promise to do something already required by an existing contract from being enforceable without new consideration—applied to this situation. Instead, the court ruled that the pre-existing duty rule did not apply here, as the contract modification was made in good faith due to unforeseen circumstances/difficulties.
Angel v. Murray
In this case, a woman moved to live with her brother-in-law after he promised her that he would provide a home and support for her. After several years, a dispute arose, and the woman sought to enforce the promise as a contract. The court held that the promise was not enforceable, ruling that it lacked consideration and that there was no mutual agreement or intention to create a legally binding contract.
Kirksey v. Kirksey