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Flashcards in 1. Formation - Agreement Issues Deck (40)
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1

In an offer to sell real estate, what is fatal to its status as an offer?

Price not stated

2

Does an offer for the sale of goodneed to state the price to be valid?

No

3

What sort of terms are not allowed in an offer?

Vague or ambiguous terms

4

What is an need/output contract?

A contract wherein the quantity is expressed as a proportion of buyer's needs or seller's output

5

In an need/output contract, can the buyer increase its requirement and not be in breach?

Yes, as long as the increase is not unreasonably disproportionate

6

What are the three exceptions to the general rule that an advertisement is not an offer?

1. Ads offering a reward

2. Ads that specify quantity and limit who can accept

3. Price quote in response to an inquiry

7

When must an offer be accepted?

Within the time stated, or a reasonable time if not stated

8

What is the effect of death or incapacity on an offer?

It terminates it

9

What are the two ways an offer can be revoked?

1. Later unambiguous statement by the offeror to the offeree

2. Later unambiguous conduct of which the offeree is aware

10

What is an option?

An offer which the offeror has promised to keep open, supported by offeree consideraiton

11

What is the firm offer rule?

Offer by a merchant to buy/sell goods, with a signed written promise to keep it open, is not revocable for up to three months

12

Under the UCC, what two types of people can be merchants?

1. Those who deal in goods of the kind in question

2. Those who, by virtue of their occupation, have knowledge of the goods in question

13

What determines the amount of time for which a firm offer must stay open?

What is the maximum?

The time stated in the signed promise

Three months, even if the parties agree longer

14

What are the two main differences between an option and a firm offer?

 

Option

Consideration required; neither party need be a merchant

Firm Offer

No consideration needed; offeror must be a merchant

15

How does reliance make an offer irrevocable?

When the reliance is foreseeable and detrimental

16

When is a unilateral offer irrevocable?

When performance is started; distinguish from mere preparation

17

But, quick comparison: when is a unilateral offer accepted?

When performance is completed

18

What are the three ways through which an offer rejected?

1. Counteroffer

2. Conditional Acceptance

3. Additional terms (common law only)

19

What is a counteroffer and what is its effect?

An unambiguous indication that offeree wants different terms, e.g. "I will only pay $x"

It kills the first offer and creates a new offer, which can be accepted

20

What is mere bargaining and is it classified as a counteroffer?

"Will you take $x?"

No - it does not kill the offer

21

What is the effect of a counteroffer on an option?

Nothing

22

What is conditional acceptance?

Acceptance with a condition, e.g. "I accept only if..."

23

What is the effect of conditional acceptance at common law?

Rejection and a counteroffer

24

What is the effect of conditional acceptance under Article 2?

Rejection only

25

Where an Article 2 offer is rejected by conditional acceptance, what happens when the seller sends the goods anyway?

The sending of the goods is a new offer, which can be accepted by the buyer

26

What is the mirror image rule for common law offers?

Acceptance must be a mirror image of the offer

27

What happens when a common law offeree adds new terms in its acceptance?

The offer is rejected and a counteroffer is made, unless the additional term is immaterial

28

What happens when an Article 2 offeree adds new terms in its acceptance?

The original offer is viewed as accepted

29

When an Article 2 offeree adds new terms in its acceptance, are the new terms part of the contract?

Only if both parties are merchants, and the additional terms are not objected to

30

Generally, how is an offer accepted by performance?

Offeree starts to perform

31

Does the offeree need to notify the offeror of acceptance by performance?

Only if distance or other factors suggest that the offeror would be unaware of the performance

32

Remember, what is the one exception to acceptance by starting to perform?

Unilateral offers must be fully performed to be accepted

33

What is the mailbox rule?

Acceptance is effective when mailed

34

What are the two exceptions to the mailbox rule?

1. Cannot be used to meet an option deadline

2. If rejection is mailed before acceptance is mailed, neither is effective until received

35

What is the effect of an Article 2 seller sending the wrong goods in response to an offer to buy?

It is acceptance and breach

36

How can an Article 2 seller who sends the wrong goods in response to an offer to buy avoid liability?

Send the goods along with an explanation; this is treated as a counteroffer, which the buyer can accept by accepting the goods

37

Who can accept an offer?

Only a person to whom it was made

38

Can an offer be accepted by someone who is unaware of the offer at the time they accept?

No

39

Can an offer be assigned?

No

40

Can an option be assigned?

Yes