Contract Formation
What are the two types of contracts? Can you give an example of each?
Bilateral = promise for a promise ; each party has right and duty
"I'll pay you to $10,000 to paint my house."
Unilateral = promise for performance only ; one party has right and other has duty
"I'll pay you to walk across the bridge."
Describe the Mailbox Rule
acceptance effective upon dispatch unless otherwise specified
When would you have a battle of the forms situation?
sale of goods (1) between merchants that have (2) varying terms that materially alter the K, or (3) has proviso language.
What do not count as consideration?
(1) love and affection
(2) moral consideration
(3) past consideration
Elements of promissory estoppel
(1) promisor should reasonably expect to indue action or forbearance
(2) promise does in fact indue action or forbearance
(3) injustice can only be avoided by enforcement
(1) Express: oral or written language
(2) Implied-in-Fact: conduct
(3) Implied-in-Law: unjust enrichment
(1) knowledge of reward
- not when given by govt. officials
What terms MUST be the same in order for there to be a valid K? List them.
Dickered Terms
(1) goods
(2) price
(3) quantity
(4) shipment date
What is sham consideration? Name the three views.
(1) restatement: does not matter --> recitation is enough
(2) most courts: does matter, no K
(3) some courts: does matter, but must pay the money
Can you give some examples of reliance?
(a) substantial expense
(b) substantial commitments
(c) forego alternatives
How do you know whether a K is within the UCC? Name the elements.
Predominant Purpose Test
a. language of K
b. nature of supplier's business
c. reason the parties entered the K
d. respective amounts charged for goods v. services
When is silence acceptance?
(1) Offeree takes benefit with reasonable opportunity to reject and reason to know the offeror expected to be paid
(2) Offeror has said that silence is acceptance
(3) reasonable that offeree should notify offeror that he does not intend to accept (through course of dealings)
(4) offeree does act inconsistent with offeror's ownership of offered property
What happens to different terms? Can you give an example of a term that would need 2-207?
Different terms = the knock out rule + court gap fillers
Warranty
What are the expectations to past consideration NOT counting as sufficient consideration?
a. Pre-existing Duty Obligation
b. promise to perform voidable duty
c. promise to pay debts discharged in bankruptcy
d. quasi-K
What is accord and satisfaction?
discharge of a claim where parties agree to something in settlement of the claim and perform the agreement
What is the standard for determining whether there has been mutual assent?
Whether a reasonable person in the position of the offeree would believe that the offeror had a present intent to contract
1. reasonable belief that there was a present intent to K
2. knows or should have known about the terms
What are the limitations to revocation of acceptance?
(1) separate consideration (option contract)
(2) firm offer rule
(3) part performance of unilateral K
With the gap-filler provisions what will the court NOT fill?
Quantity
How do you revive a time-barred debt?
a. part payment without explanation
b. written acknowledgment of debt
When can the promise to pay a lesser amount serve as consideration?
A. good faith dispute as to the amount owed or whether there is any debt at all owed
B. promise gave something in addition to lesser amount
(a hawk, early payment, discharge right to file bankruptcy)
What is required for an offer to be valid?
(1) intent to contract
(2) definite and certain terms
Bonus: what happens if some of the terms are not?
(3) communication to offeree
Name the 4 terminations of acceptance by operation of law.
1. death of either party
2. incapacity of offeror/offeree
3. destruction of subject matter
4. illegality as a JMOL
Uh-oh! One purchase order between merchants has proviso language and the other does not. What does the battle of the forms classify this as?
Proviso = counter-offer
Why is an output and/or requirement contract allowed?
UCC 2-306 applies a good faith requirement
What is forbearance? Does it count as valid consideration. Can you give an example?
Yes! It is giving up a valid claim/stop doing something legally allowed to do.
Example: giving up the right to sue in exchange for $