Contract basics
What is a contract?
A contract is a promise or set of promises of which the law gives a remedy or the performance of which the law in some way recognizes as a duty
What happens if each party has a different interpretation and both interpretations are reasonable?
The court may say that there was no meeting of the minds and will not enforce the agreement.
Advertisements and price quotes as offers
Typically seen as an invitation to bargain rather than manifesting an intent to enter into a bargain
What does the UCC cover? What about common law?
The ucc covers the sale of goods
Common law covers real estate and services
Define counter offer
1.) An offer made by an offeree to his offeror relating to the same subject matter as the original offer and proposing a substituted bargain differing from that proposed in the original offer
2.) Terminates the power of acceptance
What is mutual assent?
The process of offer and acceptance. Requires that both parties have the intent to enter into a contract
What do courts look at to determine if a party is in preliminary negotiations?
courts examine the offerors communication to determine whether they had requisite intent to enter into a contract and the potential offeree knows or has reason to know that the other party making a statement does not intend to conclude a bargain until he has made a further manifestation of intent.
When might a court treat an advertisement as an offer?
When the advertisement satisfies the elements of an offer
What is weighed on the Predominant purpose test?
The language of the contract, the nature of the business of the supplier of goods and services, the intrinsic value of the goods vs the cost of service
When can an offeror freely revoke an offer
An offeror may freely revoke an offer at any time before it has been accepted if the offeree receives notice of revocation. Notice may be received either directly or indirectly. An offeror may revoke their offer through words or actions.
How is a parties manifestation of assent judged?
A parties manifestation of assent is judged by the objective reasonable interpretation of their outward expression of consent. Not by their subjective intent.
What are the elements of an offer?
1.) A manifestation of present intent to enter into a bargain
2.) Stated in certain and definite terms
3.) Communicated to an identified person or persons
4.) So that an offerree would reasonably understand that a contract would result if accepted
Who specifies the manner of acceptance? What happens if they do not specify
The offeror specifies the manner. If the manner is unspecified it may be answered in the same manner sent or within a reasonable time
What is looked at for the gravaman test?
The nature of the complaint
According to the mailbox rule, when is an acceptance effective?
When sent through the mail, an acceptance is effective upon dispatch
Is failure to read a valid defense using the objective standard?
No. The court presumes that if a party signs a contract they have read and understood all terms of the contract. They have the duty to read.
UCC approach to offer rules
1.) A contract for sale of goods may be made in any manner sufficient to show agreement, including conduct by both parties that recognizes the existence of such a contract
2.) An agreement sufficient to constitute a contract for sale may be found even though the moment of its making is undetermined
3.) Even though one or more terms is left open, a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving a remedy
Define the mirror image rule
An offeree must assent to every term of the offer. Sometimes an offeree will characterize their response as a conditional acceptance. A conditional acceptance is one where the offeree accepts the offer on the condition that the offeror accepts some additional terms. However, these do not form a contract under common law
Are crops and timber considered to be goods?
Yes. It does not matter if the buyer or seller is severing it from the land as long as the land itself is not being purchased
Does silence normally operate as acceptance? Are there any exceptions?
An offerees silence does not normally operate as an acceptance except in the following circumstances l
A.) Where the offeror and offeree indicate by words or conduct that silence or inaction is acceptance
B.) Where in previous dealings, the parties operated so that silence or inaction was acceptance
C ) the offeree has exercised dominion over the consideration that was offered
What happens if two parties attach different meanings to a promise, agreement, or term?
The term will be interpreted according to the meaning attached by one of the parties if:
(A) That party did not know the other attached a different meaning, and the other party knew of the difference; or
(B) That party had no reason to know the other attached a different meaning.
Under the UCC, if the parties did not agree on some specifics such as place or time of delivery what does the court do?
The court is allowed to imply reasonable terms under certain circumstances
What will the power of acceptance be terminated by?
1.) Rejection by the offeree
2.) Counteroffer by the offeree
3.) Revocation by the offeror
4.) Lapse of time
5.) Death or incapacity of the offeror or offeree
Does delivery of a product make a hybrid contract?
No. It would just be a sale of goods
How is an acceptance defined in a unilateral contract?
Performance is acceptance in a unilateral contract