RULES & DEFINITIONS
OFFER
WHAT IS...
An offer is a communication that invites assent and indicates that assent will conclude the deal.
ACCEPTANCE OF OFFER DEFINED:
WHAT IS....
(1) Acceptance of an offer is a manifestation of assent to the terms thereof made by the
offeree in a manner invited or required by the offer.
counteroffer reject _____
what is... the original offer
(37) “Signed”
WHAT IS...
“Signed” includes using any symbol executed or adopted with present intention to adopt or accept a writing.
Not every _____ is an ____, but every ____ includes a_____
WHAT IS...
Not every promise is an offer, but every offer includes a promise
WHAT IS...
Absence of meaningful choice (by the weaker party)
REVOCATION
WHAT IS.. Offers are freely revocable at any time prior to acceptance.
What type of contract is a promise for a promise?
what is... bilateral
Acceptance must be made in a manner invited by ____
what is... the offer
(43) WRITING
WHAT IS...
(43) “Writing” includes printing, typewriting, or any other intentional reduction to tangible form.
“Written” has a corresponding meaning.
2-205 "FORM"
but any such term of assurance
on a form supplied by the _____
must be separately signed by the _____
the _____ MUST sign twice
WHAT IS...
But any such term of assurance
On a form supplied by the offeree
Must be separately signed
By the offeror
Offeror MUST sign twice
MISREPRESENTATION (4 ELEMENTS)
WHAT IS...
TENDER REQUIREMENT
FRAUDULENT OR MATERIAL MISREPRESENTATION
FRAUD OR MISREP INDUCED ASSENT BY THE OTHER PARTY
JUSTIFIABLE RELIANCE
WHAT IS... A promise is an assurance that something will or will not be done in the future.
RESTATEMENT 45 Option Contract Created By Part Performance Or Tender
WHAT IS...
Where an offer invites an offeree to accept by rendering a performance and does not
invite a promissory acceptance, an option contract is created when the offeree tenders or
begins the invited performance or tenders a beginning of it.
(2) The offeror's duty of performance under any option contract so created is conditional on
completion or tender of the invited performance in accordance with the terms of the offer.
A reply to an offer that merely requests information regarding the offer constitutes an ____ rather than a ______.
what is....
A reply to an offer that merely requests information regarding the offer constitutes an inquiry rather than a counteroffer.
GOODS
WHAT IS...
"Goods" means all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (Article 8) and things in action.
An offer for a ______ contract can be revoked AT ANY TIME PERIOR TO ACCEPTANCE
what is.... a unilateral K
MYLEGS STANDS FOR....
WHAT IS
MARRIAGE
1 YEAR PROVISION
LAND
EXECUTOR
SALE OF GOODS
SURETYSHIP
MIRROR IMAGE RULE
what is...
Mirror Image Rule: to accept an offer, the terms of the acceptance MUST MIRROR the terms of the offer
45 Unilateral Option Contract is created when:
what is....
a) Offeree tenders or begins the invited performance or tenders a beginning of it
b) Offerors duty of performance is conditional on complete performance or tender of invited performance following terms of the offer (held open for a reasonable amount of time)
what is... OPTION CONTRACT
Seasonable defined:
what is ....
must be within a reasonable amount of time
communications which require additional
assent/action =
what are... PRELIMINARY NEGOTIATIONS
JUSTIFIABLE RELIANCE REASONABLENESS STANDARD:
WHAT IS...
Reasonableness standard: would a reasonable person, under all the
circumstances, believe that the party’s reliance was justified?
RESTATEMENT 39 COUNTEROFFERS
WHAT IS...
(1) A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.
§81 Consideration as Motive or Inducing Cause
WHAT IS...
The fact that what is bargained for does not of itself induce the making of a promise does
not prevent it from being consideration for the promise.
METHODS OF TERMINATION OF THE POWER OF ACCEPTANCE
WHAT IS...
(1) An offeree's power of acceptance may be terminated by
(a) rejection or counter-offer by the offeree, or
(b) lapse of time, or
(c) revocation by the offeror, or
(d) death or incapacity of the offeror or offeree.
AGREED TERMS RULE (2-207)
WHAT IS...
Hold up both forms (1st offer and CO-both dead at this point) and look to see where they AGREE ONLY. (dickered terms)
If one form includes a term and the other does not mention it=NO agreement
_____ Displaces common law
what is.... 2-207
RULE (§162-1): “Misrepresentation is fraudulent if....
WHAT IS...
RULE (§162-1): “Misrepresentation is fraudulent if the maker intends his
assertion to induce a party to manifest assent AND the maker”:
Knows or believes the assertion is not in accord with the facts
Does not have the confidence he states or implies in the truth of the assertion
Knows that he does not have the basis he states or implies for the assertion
RESTATEMENT 26 PRELIMINARY NEGOTIATIONS
WHAT IS... A manifestation of willingness to enter into a bargain is not an offer if the person to whom it is
addressed knows or has reason to know that the person making it does not intend to conclude a
bargain until he has made a further manifestation of assent.
§32: Invitation of Promise or Performance
what is.....
An offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests
OR
Rendering the performance as the offeree chooses
RESTATEMENT 90 PROMISE REASONABLY INDUCING ACTION OR FOREBEARANCE
WHAT IS...
A promise which the promisor should reasonably expect to induce action or forbearance
on the part of the promisee or a third person and which does induce such action or
forbearance is binding if injustice can be avoided only by enforcement of the promise.
The remedy granted for breach may be limited as justice requires.
What is ... the knockout rule
_____ determines when a counteroffer is accepted
“A party impliedly assents to and thereby accepts a CO by conduct indicating lack of objection to it”
what is.... the Last Shot Rule
Was there a wrongful or improper threat? (RULE)
what is...
A threat of criminal or tortious conduct, threat to breach a K or to
withhold payments of an admitted debt made in bad faith (coerced)
Even if a party has a legal right to make a threat, it can still be
wrongful/improper if made in bad faith
The threat does not need to be illegal to give rise to a duress claim
RESTATEMENT 86 (1) Promissory Restitution
WHAT IS... To establish Restatement 86 (1), there must be:
(1a) a benefit previously received by the promisor from the promisee,
(1b) a subsequent promise made in recognition of a benefit, and
(1c) the promise is binding to the extent necessary to prevent injustice.
§ 86. Promise For Benefit Received
WHAT IS...
(1) A promise made in recognition of a benefit previously received by the promisor from the
promisee is binding to the extent necessary to prevent injustice.
(2) A promise is not binding under Subsection (1)
(a) if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or
(b) to the extent that its value is disproportionate to the benefit.
71 TO CONSTITUTE CONSIDERATION BARGAINED FOR:
WHAT IS...
A performance or return promise is bargained for if it is sought by the promisor in
exchange for his promise and is given by the promisee in exchange for that promise.
Definite defined:
what is...
shows a commitment to go forward with the deal
on the same dickered terms (agreed terms) as those which have been offered
§81 KSN as Motive or Inducing cause
WHAT IS....
“The fact that what is bargained for does not of itself induce the promise does not prevent it from being KSN”
STATUTE OF FRAUDS 3 STEP ANALYSIS
WHAT IS...
IS THE K WITHIN THE STATUTE OF FRAUDS?
IF THE K IS WITHIN THE STATUTE, IS THE SOF SATISFIED?
IF THE SOF REQUIREMENT IS NOT SATISFIED IS THERE AN APPLICABLE EXCEPTION?
RESTATEMENT 86 (2) PROMISSORY RESTITUTION
WHAT IS... (2) provides that a promise is not binding under subsection (1) if
(a) the promissee conferred the benefit as a gift or,
(b) for other reasons the promisor has not been unjustly enriched; or,
(c) to the extent that the value is disproportionate to the benefit.
§ 87. Option Contract
WHAT IS...
(2) 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.
177 UNDUE INFLUENCE
WHAT IS ...
(1) Undue influence is unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relation between them is justified is assuming that the person will not act in a manner inconsistent with his welfare.
(2) If a party’s manifestation of assent is induced by undue influence by the other party, the contract is voidable by the victim.
2-205 FIRM OFFER RULE
WHAT IS..
An offer by a merchant to buy or sell goods in a signed writing which by its terms give assurance that it will be held open is not revocable, for lack of consideration, during the time stated or if no time is stated for a reasonable time, but in no event may such period of irrevocability exceed three months;
but any such term of assurance on a form supplied by the offeree must be separately signed by the offeror.
RULE FOR_____ :
Unless the offer has already objected,
An acceptance made in a manner and by a medium
invited by an offer is operative and completes manifestation of mutual assent as soon as dispatch is completed
what is... Mailbox Rule
Duress (Bargaining Misbehavior) 4 elements
what is...
1. was there a wrongful or improper threat?
2. was there a lack of reasonable alternatives?
3. did the threat induce the making of the k?
4. did the other party cause the hardship?
CONFERRED BENEFIT AS A GIFT?
WHAT IS...
WOULD A REASONABLE PERSON THINK THAT THE BENEFIT WAS A GIFT?
** PROMISOR HAS THE BURDEN OF SHOWING BENEFIT WAS CONFERRED AS A GIFT.
176. When A Threat Is Improper
WHAT IS...
(1) A threat is improper if
(a) what is threatened is a crime or a tort, or the threat itself would be a crime or a tort if it resulted in obtaining property,
(b) what is threatened is a criminal prosecution,
(c) what is threatened is the use of civil process and the threat is made in bad faith, or
(d) the threat is a breach of the duty of good faith and fair dealing under a contract with the recipient.
(2) A threat is improper if the resulting exchange is not on fair terms, and
(a) the threatened act would harm the recipient and would not significantly benefit the party making the threat,
(b) the effectiveness of the threat in inducing the manifestation of assent is significantly increased by prior unfair dealing by the party making the threat, or
(c) what is threatened is otherwise a use of power for illegitimate ends.
Brown Machine Test is used for which element of which rule
What is... the test for expressly conditional in 2-207
UNILATERAL K is a promise for ____
acceptance of the offer is valid when __________
WHAT IS...
Unilateral: Promise for performance Acceptance of the offer is valid when performance is completed.
RULE FOR TENDER REQUIREMENT
WHAT IS...
RULE: To obtain rescission, the party must show that he has made a
“tender” of any money or prop received before instituting the action. Must
be ready, willing and able to return KSN or its equivalent
RULE for past services:
WHAT IS...
Past services cannot constitute KSN for a later promise. Something which is delivered before the promise is made cannot constitute KSN given in exchange for promise
Rule: Brown Machine Test
what is...
the conditional nature of the acceptance must be sufficient to put the offeror on notice that the offeree will not proceed with the transaction absent the offeror’s assent to the additional or different terms
a. Sufficient language:
i. Does the language track §2-207(1)? Does it say,
“expressly conditional”?
ii. “This is a counter-offer”
b) Insufficient language for expressly conditional
a. “Subject to” or its equivalent
Establishing one of the Avoiding Enforcement doctrines gets you _____ of the K.
WHAT IS....
Establishing one of the AE doctrines gets you rescission (unmaking) of the K
2-104 MERCHANT AND BETWEEN MERCHANTS
WHAT IS....
(1) "Merchant" means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill.
(3) "Between merchants" means in any transaction with respect to which both parties are chargeable with the knowledge or skill of merchants.
Undue influence (bargaining misbehavior)
Is there undue susceptibility in the servient party? (rule)
what is...
Undue susceptibility does not need to be long-lasting or wholly
incapacitating. It can be physical, mental, or emotional problems.
Examples: old age, widow/widower, lack of sleep.
IF A TERM IS CONFLICTING IN BOTH FORMS WE USE _____
WHAT IS...
If a term is conflicting in both forms, they CANCEL each other out and are replaced by gap fillers
7 factors to consider if there is excessive pressure by the dominant party
what is...
(7 FACTORS to consider)
Discussion of the transaction at an unusual or inappropriate time
Insistent demand that the business be finished at once
Consummation of the transaction in an unusual place
Extreme emphasis on untoward consequences of delay
The use of multiple persuaders by dominant side against a single servient party
Absence of 3rd party advisers to the servient party
Statements that there is “no time to consult financial advisors or attorneys”
RULE FOR EXPRESS ASSENT:
WHAT IS....
EXPRESS ASSENT requires a specific and unequivocal expression of assent + affirmative act with respect to the additional term by the offeror (2 TESTS)
a. Test 1: Offeror must be aware of the additional terms and manifest assent unambiguously
b. Test 2: Express assent CANNOT be presumed by silence, failure to object, or by conduct.
Undue Influence
Is there excessive pressure by the dominant party?
Rule:
what is...
RULE: Persuasion that overcomes the will of the person thereby inducing him to enter into the K (unfair advantage or mismatch=KEY)
RULE (§162-2): “Misrepresentation is material if...
WHAT IS...
It would be likely to induce a reasonable person to manifest his assent
OR
If the maker knows that it would be likely to induce the recipient to
manifest his assent