Hypotheticals
Garrett is the owner of a convenience store. Michael enters the store and attempts to steal from the cash register and threatens another customer. Claire, a customer runs out of the store and approaches a police officer and recounts what happened in the store, asking for help. Officer Jed decides it's too boring and only offers to help if Claire pays him $50. Under the pre-existing duty rule, does Claire have to pay Officer Jed?
No, Officer Jed has not done anything that he wasn't already obligated to do.
What is the mirror image rule (RSC 58)?
The mirror image rule states that that acceptance of the offer must exactly mirror the terms stated in the offer. Any modification of the terms constistutes a counteroffer (and thus terminates the original offer).
Distinguish between a unilateral and a bilateral contract.
A unilateral contract is a promise in exchange for performance; acceptance of a unilateral contract requires full performance.
A bilateral promise is an exchange of a promise for a promise.
Can past consideration qualify for future promises?
Bonus - name the concept.
No, past consideration is NOT consideration. Just because something was enforceable in the past, does not mean it is enforceable in the future.
Bonus - Moral obligation.
When does the UCC apply? When does the UCC not apply?
UCC applies to tangible goods, all things moveable, and unborn animals.
UCC does NOT apply to any services, custom goods, real estate, intellectual property, or securities trading.
Jed makes an offer to sell Claire an item for $5. Claire mails back a rejection letter to Jed. Claire then changes her mind and mails Jed an acceptance letter. Which letter is effective?
Under the mailbox rule, rejections and counter offers are both upon receipt of the letter. Assuming the rejection letter gets to Jed first, the original offer is terminated. Jed's receipt of the following acceptance letter is now considered a counteroffer.
Describe the difference between a counteroffer and a conditional acceptance.
A counteroffer is the modification of the terms of a contract that results in a termination of the original offer. A conditional acceptance is a mere REQUEST to change conditions and does not terminate the offer (changing the terms on request is usually done gratuitously).
What is forebearance?
The refraining from one's legal right to engage in an activity.
Modification of a contract under the concept of pre-existing duty is allowed if these four requirements are met:
1. The parties agree voluntarily
2. The circumstances requiring modifications were unforeseen
3. Modification is fair and equitable
4. Modification is commenced prior to completion of full performance
When does RSC apply?
RSC applies to services, intangible items, real estate, or goods if there is no accompanying UCC provision.
NYLS is putting on an end of year celebration for their students and hires Michael Jackson as a headliner using a booking company (assume that Michael Jackson is still alive). The day of the show arrives and instead of the King of Pop, a random man also named Michael Jackson arrives. NYLS sues the booking company. Can NYLS sue the booking company for breach of contract?
No, NYLS cannot sue the booking company because Michael Jackson is an inherently vague term. Under the Peerless rule, there is no contract because there is no meeting of the minds. Both parties had different interpretations of which Michael Jackson would show up to perform, thus terminating the contract for ambiguous terms.
Describe promissory estoppel.
Promissory estoppel is a reasonable reliance on a promise that acts as a substitute for consideration. Defendants in a promissory estoppel case are estopped from making an argument based on their conduct (RSC 90(1)).
What comprises consideration? Define both concepts.
What are the requirements for a manifestation of assent/offer?
1. Objective language is used
2. Identity of the receiving party is identified
3. Terms are definite to a reasonable person
What is a merchant firm offer/contract? Is this RSC or UCC?
UCC 2-205. A rejection of a merchant firm offer must be signed in writing and kept open for a reasonable period of time. The UCC assigns 3 months to be a reasonable period of time if there is no time specified.
Part 1 - Garrett offers to paint Michael's house for $2,000. Michael responds, "I accept, but only for $1,000." What type of contract is this?
Part 2 - Same facts but Garrett does not accept Michaels's counteroffer. Michael responds, "Fine. I will pay you $2,000." Is there a valid contract?
Part 3 - Garrett offers to paint Michaels's house for $2,000. Michael responds, "I accept, but could you come next week?" Is there a contract?
Part 1 - A reply to an offer with conditions is considered a counteroffer. Michael's response constitutes a counteroffer.
Part 2 - No. The counter offer terminates the original deal. Garrett's original offer no longer exists.
Part 3 - Yes. Michael has requested additional changes that do not materially alter the deal (conditional acceptance).
Describe the concept of unconscionability, including both substantive and procedural unconscionability.
Unconscionability is when a contract has one or more provisions that make the deal lopsided by unfairly surprising or oppresses the other party.
Substantive unconscionability is the exploitation of one party by the other beyond what the law would typically allow.
Procedural unconscionability is when a party is unfairly surprised/caught off guard by unfair terms of a deal.
Describe an option contract. Is there an exception to an offer contract?
An option contract is when an offeree pays a nominal fee to the offeror to keep a contract negotiation period open. The offer is irrevocable for a set period of time and limits the offeror's ability to revoke the offer. The exception is if an offeror reasonably relies on the rejection of an offer.
What are the elements for a contract implied in fact?
1. Defendant requests the work
2. Plaintiff is expected to be paid
3. Defendant knows that the Plaintiff expected to be paid
What are the 6 ways of terminating an offer under RSC? Please explain each one.
L - lapse in time (fails to accept before the end of the time period)
I - incapacitation or death (offer dies if the person dies)
C - counteroffer (changed terms eliminate the previous deal)
C - conditional (acceptance based on "but only if" changes --> turns into a counteroffer)
R - revocation (the master of the offer can revoke at any time before acceptance
R - rejection (no deal)
Chace agrees to sell Bridget a car. Bridget agrees to give Chace $100 to keep the option period open for 60 days. On day 25, Bridget calls Chace and says she no longer wishes to purchase Chace's car. Chace then sells the car to Claire. On day 40, Bridget wins the lottery, calls Chace up, and says that she changed her mind and would like to buy the car. Assume Chace needed to get rid of the car ASAP. Is there still a contract between Chace and Bridget?
Bonus question - What if Chace was not in a hurry to sell the car and after Bridget's rejection, Chace just held onto it. Can Bridget still accept?
No. Although Bridget paid consideration to keep the option open, Chace reasonably relied on Bridget's rejection of the offer.
Bonus question - Bridget can still accept within the time period because Chace did not change her position in reasonable reliance of Bridget's rejection.
Describe the mailbox rule.
Acceptance of an offer by offeree is upon dispatch.
Any offer, counteroffer, or revocation of an offer is upon receipt.
Define equitable estoppel.
Equitable estoppel is when the reliance on a promise requires a party to change their position for worse, giving them a cause of action when a contract is breached.
What are the elements for a contract implied in law (unjust enrichment/quasicontract)?
2. defendant must have an appreciation of the benefit received.
3. defendant must retain the benefit under circumstances that would make it unjust to retain without paying for it
The UCC can gap fill on all terms except:
1. item
2. quantity