Yaz’s Contract 1 Final

Offer

100

What is an offer?

A promise and manifestation of willingness to be bound by a promise; either oral or written, or may be inferred from conduct.

200

What are the 3 invalid offers?

Jokes, Preliminary Negotiation, Advertisements

300

What makes an option contract irrevocable?

Consideration

Unilateral contract- part performance

Bilateral- nominal consideration

400

What is a firm offer?

1. Merchant signed writing to leave the offer open for a specific time, but consideration is not required. However, the writing is required by the statute of frauds, and the merchant can only be bound for three months. 

• Has to be by a merchant (prevail of goods) 
• Merchant needs to WRITE down the offer to hold it & be SIGNED 
• Cannot be longer than 3 months

500

Define the 2 types of mistakes….

Mutual Mistake: where a mistake of both parties at the time a contract was made as to basic assumption on which the contract was made a material effect on the agreed exchange of performance, the contract is voidable by the adversely affected party unless he bears the risk of mistake

Unilateral Mistake: mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performance that is adverse to him the contract is voidable, by him if he doesn’t bear the risk of the mistake. 

Acceptance

100

What is an acceptance?

The intent to be bound by a promise or performance.

200

What are the methods of termination…

1. Rejection/counter-offer

2. Lapse of time

3. Revocation 

4. Death/incapacity

5. Non-occurence

300

An offeree’s silence or inaction operates as acceptance only in specific cases:

When they take the benefit of offered services with the expectation of compensation, when the offeror indicates that silence can signify assent, or when it is reasonable based on prior dealings that the offeree should notify the offeror if they do not intend to accept. In these situations, the offeree's failure to respond is considered an acceptance of the offer.

400

If the offeree accepts by performing but knows the offeror has no way of learning about the performance promptly and certainly, the offeror's duty is discharged unless:

1. The offeree exercises reasonable diligence to notify the offeror.
2. The offeror learns of the performance within a reasonable time.
3. The offer indicates that no notification is required.

500

Offeree pays $100 on a real estate transaction to keep the contract open for 7 days - 06/01 - 06/07 expires at 5pm; option contract. On the morning of 06/07 acceptance was sent and received on 06/08. Is the contract valid?

 it MUST BE RECEIVED by the offeror before the deadline. The contract is not effective.

Consideration

100

What are the types of consideration:

 Act, performance, return promise, and forbearance (refrain from doing.)

200

What is Nominal consideration?

A mere pretense of a bargain does not suffice. Offered by one party to an agreement with little or virtually no value, particularly about the consideration offered by the other party.

300

UCC §2-209 states that a contract modification…

A contract modification does not require consideration to be binding, but if a signed agreement specifies that modifications or rescissions must be in writing, such terms cannot be changed without a signed writing, with additional requirements for modifications on merchant-supplied forms.

400

What is the Uniform Obligations Act?

 a written release or promise made and signed by the person releasing or promising shall not be invalid or unforeseeable for lack of consideration, if the writing also contains an additional express statement in any form of language that the signer intends to be legally bound

500

What are the exceptions of the pre-existing duty rule?

when a party to a contract encounters unanticipated difficulties and the other party, not influenced by coercion or duress, voluntarily agrees to pay additional compensation for work already required to be performed under contract

1. Both sides havent completed performances yet
2. Underlying circumstances were unanticipated at the time the contract was formed
3. Modification is fair and equitable

Defenses

100

What are the 5 defenses?

1. Lack of Capacity

2. Duress

3. Illegality

4. Unconscionability

5. Misrepresentation

200

What are the 3 classes of lack of incapacity 

Intoxication, Mental Illness, Infants

300

What is the avoidance defense?

If the party is induced in a contract under improper bargaining, the mistaken party can go to court to enforced the contract.  

400

What is the Peerless rule?

 if parties attach materially different meanings to their manifestations and neither knows the other's meaning, there is no mutual assent. If one party understands the meaning attached by the other, the contract is operative according to that understanding.

500

Impracticability UCC §2-615(a)

performance may be impracticable b/c extreme, & unreasonable difficulty, expense, injury, or loss to one of the parties will be involved. “Acts of God” or to acts of third parties.

Misc.

100

What is the mirror image rule?

an offer must be accepted, exactly as it is presented, without any changes or modifications. The acceptance must be the mirror image of the offer. 

200

What are the elements of the quasi-contract?

Elements - quasi-contract: 

• A benefit conferred upon the defendant by the plaintiff, 
• Appreciation by the defendant of such benefit, and 
• Acceptance and retention by a defendant of such benefit under such circumstances that it would be inequitable to retain the benefit without payment of the value thereof. 

300

What are the 3 exemptions to sale of goods under that Statute of Frauds?

1. Contracts for the sale of specially manufactured goods for $500 or more

2. Non-injured party admits in court the contract was made

3. Payments has been accepted or goods have already been received

400

What are the elements of Mutual and Unilateral Mistake?

(hint: they share the same 3 elements BUT one type of mistake has one more element)

Mutual Mistake:
1. Must be regarding a basic assumption on which the contract was made 

2. Must have a material effect 

3. Adversely affected party must not bear the risk 

Unilateral Mistake:

1. Must be regarding a basic assumption on which the contract was made 

2. Must have a material effect 

3. Adversely affected party must not bear the risk and must have been the mistaken party

4. Mistake must cause unconscionability, the other party must know, or the mistake must be the other party’s fault

500

3 ways a party may bear a risk

1. Parties have agreed in the contract to allocate the risk to that party OR
2. A court allocates the risk to that party because it is reasonable under the circumstances OR

3. a party is consciously ignorant