Offer and Acceptance
a. What terms are required for a UCC contract and a common law contract
b. what are the elements of an offer
a. common law:
who - the parties
what - subject matter
how much - price
how many - quantity
when - time of performance
where - place of performance
UCC: more flexible, can leave open terms if clearly intend contract and court can enforce whats there
- only required term is quantity
b. serious intent, definite terms, communicated to offeree
fill in the blanks
a. contracts entered into by mentally disabled are ___, ____, or _____
b. if adjucated by court to be incompetent ____
c. contract is ____ if person lacks mental capacity to understand legal consequences of entering contract
d. ____ if person has ability to understand nature of contract even if mentally impaired
e. true or false: can ratify contract when luvid
a. void, voidable, valid
b. void
c. voidable
d. valid
e. true
a. when is a noncompete enforceable
b. when are exculpatory clauses enforceable and unenforceable - hint 3 situations they are unenforceable and 1 when enforceable
1. protects legitimate business interest.purpose (goodwill, trade secrets, not preventing competition, can't be enforced against something with a common calling)
2. restrictions must be reasonable on terms of time, geography and scope (anything over 2 years too long, patients within 20 miles = noncompete can't go above those 20 miles, work as a surgeon but can work as an exec at another hospital)
b.
Unenforceable when
- releases party from anything worse than ordinary neglience, if releases party that has business necessary for society, if violates public policy
Enforceable if between parties with equal bargaining power
a. what is specific performance
b. when is specific performance available
c. give an example of a time specific performance can be enforced and when it cannot be
a. court compels party to perform contract
b. not available unless monetary damages are inadequate and specific performance is not available for personal services contracts - only for unique subject matter
a. what is the mailbox rule
b. what are the two exceptions to the mailbox rule
c. if a rejection was sent monday, acceptance sent tuesday and the acceptance was receieved first does a contract exist?
a. acceptance is effective when sent by authorized means
b. two exceptions (effective upon receiving)
1. if offer specifies "must be received"
2. if offeree sends rejection first, then acceptance (whichever arrives first) also acceptance via unreasonable means or option contracts
c. a contract exists because acceptance arrived first
a. What are the elements of misrepresentation and fraud - specify which for misrep and which for fraud
b. what are the exceptions for misrepresentation of silence - Generally no duty to volunteer information EXCEPT..
a.
misrepresentation of a material fact (made with the intent to deceive) on which another justifiably relied (and the reliance caused harm) - need proof of harm if suing for damages
b. exceptions
1. offered incomplete information
2. confidential relationship between parties
3. seller is aware of hidden defect that the buyer cant reasonably discover
a. what are the two exceptions with contract of land (hint: price, possession and permanent improvements)
b. what is the one year rule and give an example:
c. generally the entire agreement does not have to be in writing, what needs to be part of the memorandum:
a.
exception 1: if seller of land has completely performed (ex: gave keys to house)
exception 2: if buyer has partially performed in reliance on oral promise (part performance doctrine)
- buyer reasonably relied on oral contract (paid some of price, taken possession and made permanent improvements)
- buyer has changed his position so that enforcement of contract is incessary to prevent injustice
c. only a memorandum containing essential terms is required, only the party against whom enforcement is sought must have signed the memorandum
Is this an offer?
a. Is first 10 customers get a laptop for $1 a valid offer?
b. What is the general rule for ads and what is an exception to this rule
c. what are the three types of irrevocable offers +define them
a. Yes, specifies a limited class of people and definite terms
b. ads are invitations to negotiate, not offers + when the ad includes clear and definite terms and limits of who can accept (ex: first 10 customers)
c.
1. option contract: offer promises to keep offer open for specified period of time in exchange for consideration
2. promissory estoppel
3. unilateral offers
4. firm offers: a merchant promises in signed writing to keep an offer open
- irrevocable without consideration
- offer must stay open for specified period or for a reasonable time but no longer than three months
- if offeree includes firm offer in its forms, offeror merchant must sign assurance seperately
a. what is a regulatory statute and revenue statute
b. what are the two exceptions to a unilateral mistake
c. explain what happened in Coma Corp. v Kansas
a.
regulatory statute requires a license to ensure proper skills or character and contract is void if you enter a contract with an unlicensed party
revenue statutes purpose is to raise revenue for state or locality and contracts with an unlicensed party is valid
b.
1. if nonmistaken party caused or had reason to know of the mistake
2. if enforcing the contract would be unconscionable
c. Coma corp hired an illegal immigrant and did not pay them, the immigrant sued and the court ruled that state law trumped national law and that Coma had to pay fair labor wages otherwise it would set the precedent that companies could hire illegal immigrants and not pay them
a. what is procedural and substantive unconscionability
b. there are three exceptions to when there is a breach of an illegal contract : one party was excusably ignorant
(1 ) illegality must be relatively minor, cannot receive damages for performance after learning of the illegality (2) if both parties were ignorant of minor illegality (3) cannot enforce contract but may get restitution
GIVE AN EXAMPLE of 1 and 3
c. party not equally in wrong (in pari delecto) and a divisible contract - define them
hint for pari delecto - 3 diff definitions of NOT being in pari delecto
a. procedural: unfairness in procedure of making contract (fine print, complex language, high pressure sales tactics) and substantive: terms of contract are one sided, oppressive or harsh - need both to make a contract void - is a sliding scale
b. 1 - cant be like hiring someone to kill 3 - I hire you to take my package to Miami that has drugs in it and you do not know and get arrested in Miami because of the drugs
c.
Pari delecto
- if person the law intends to protect enters the contract with someone who violates the law, the person who should have been protected can enforce the contract
- party may get relief if induced into illegal contract by fraud, duress, or undue influence
- party who rescinds illegal contract before illegal part happens can get restitution
Divisible contract: if majority of contract is legal and makes sense without illegal part, court can enforce legal part and strike the rest - consideration usually has to be separate
a. what are compensatory damages
b. what are incidental damages
c. what are consequential damages
d. what are punitive damages
e. what are liquidated damages (specify when enforceable)
f. what are limits on damages (there are 2)
g. nonbreaching parties have a duty to reduce or lessen his injuries this is called _____
bonus: nominal damages
a. money to compensate directly caused by breach - generally difference between market value and contract price
b. expenses directly caused by breach such as cost of equipment
c. damages beyond loss of contract caused by consequences that the defendant knows about
d. meant to punish defendant and deter others from similar bad conduct (on top of compensatory and consequential)
e. amount stated in contract to be paid in case of future breach
only enforceable if damages resulting from breach were difficult to estimate and there is a reasonable estimate of damages
f. reasonable certainity and forseeability
g. mitigation
bonus: plaintiff receives token award if no actual harm incurred
A. what is the mirror image rule and what law does it apply to
B. when do additional terms become part of the contract between merchants
C. what is an example of material alteration
a. mirror image rule is when the acceptances terms must match the offers terms exactly or is considered a counter offer (common law)
UCC uses battle of the forms
b.
1. offer limits acceptance
2. terms materially alter
3. offeror objects in a reasonable time
c. arbitration clauses, warranty disclaimers, indemnification clauses etc.
a. what are the elements of duress
b. what are the elements of undue influence
c. define majority rule vs minority rule and the impact it has on a minor disaffirming a contract
d. what are the exceptions for minors
a.
1. contract was induced by improper threat
2. victim had no reasonable choice but to agree to contract
b.
1. parties relationship is either one of trust and confidence or one party dominates the other
2. dominant party unfairly persuades weaker party to enter contract
c. minority rule: some states require restitution and majority rule: minor can get full refund even if they have damaged or lost the goods
d. cant disaffirm public policy contracts, minors can disaffirm contracts for necessaries but are liable for reasonable value of goods received
- essential for minors welfare and existence AND item cannot be provided by minors parents
Give an example of
1. Adhesion contract
2. divisble contract
3. a time where a sale of goods needs to be written
4. name one of the 4 other ways to satisfy the statute of frauds
1. adhesion contract: dominant party offers weaker party contract on a take it or leave it basis - not automatically enforceable and unclear/overly complex terms may not be enforced if reasonable consumer could not understand
2. ferret example
3. anything over $500
4.
1. admission - if party admits to existence of oral contract in court or court documents (UCC - court will enforce up to the quantity of goods admitted)
2. partial performance - real estate: buyer takes possession, usually not for personal service contracts (UCC - contract will be enforced for the amount of goods paid for/delivered)
3. Promissory Estoppel
4. UCC only - Confirmatory memorandum between merchants if
- both parties are merchants, one signs and sends written confirmation of oral contract, confirmation is sent within a reasonable time after contract is made, confirmation has quantity term, recipient does not object within ten days of reciept
a. what are the three ways to communicate acceptance
b. what are the 3 exceptions: acceptance is effective when received IF ...
a.
1. stipulation: must accept in a manner required by offer
2. express authorization: may not accept in a way suggested
3. implied authorization: can accept by any reasonable mens
b.
1. offer contains deadline to accept
2. if acceptance is sent by unreasonable means (common law: effective when received no matter what, UCC: effective when sent as long as within reasonable time, if late then effective when received
3. offeree sends rejection then acceptance, rejection is effective when received and only effective if received before - whichever comes first
a. what are the two components of consideration
b. what are the three types of contracts that lack consideration +define
c. what are the exceptions to consideration
a. legal sufficiency and bargain for exchange
1. legal sufficiency: consideration must be of legal detriment (receiving something one did not have a prior right to) to promisee or legal benefit (giving something one had no prior legal obligation to give or not doing something one had a legal right to do) to promisor
2. bargain for exchange: promisees legal detriment and promisors legal benefit must have induced the promisor to make his promise AND the promisors promise must have induced the promisees legal detriment or induced legal benefit
b. illusory promises, output and requirement contracts and exclusive dealing contracts
1. illusory promises - party can cancel at any time "if i want to" "as much as i like"
2. output: buyer agrees to buy all goods seller produces, requirements: seller agrees to sell buyer all goods a buyer needs
no set quantity = illusory under common law, UCC allows it but requires dealing in good faith
3. Exclusive dealing: manufacturer agrees that distributor has exclusive right to sell goods in particular territory
c. Exceptions are unforseen difficulties and if the modification created a new contract - UCC modifications made in good faith do not need new consideration to be valid
a. what are the 7 exceptions to the parole evidence rule
b. 5 rules the court follows to decide what parties meant when they wrote their contract (hint: think about handwritten vs preprinted terms)
- not meant to be complete expression of agreement
- can use to provide additional terms cannot conflict with existing terms
- cannot add terms if there is an integration clause
2. clarify ambiguous terms
3. to show contract is voidable or void because of a defense
4. to show existence of a condition
5. to show a subsequent modification (written or oral)
6. UCC only: to show prior dealing, course of performance or trade usage
7. to correct obvious clerical error
b.
1. contracts must be interpreted as a whole in context of parties principal objective
2. plain meaning rule
3. specific terms are given more weight than general terms
4. handwritten terms trump preprinted terms
5. ambiguities are interpreted against the drafter