Formation

Question 1

Definition of a k

Answer 1

a. K is an agreement that is legally enforceable.

Question 2

Overview of agreement process on the bar

Answer 2

a. to find agreement look for
i. offer (initial communication)
ii. termination of the offer (what happens after the initial communication) AND
iii. acceptance (who responds and how)

Question 3

First, is the initial communication an offer?

Answer 3

a. Test: manifestation of commitment

iv. test: is RP in position of offeree would believe that his assent creates a k.

Question 4

Possible problems of content with having a real offer

Answer 4

1. Missing PRICE term in sales k
   a. Sale of real estate—CL—price and land description REQUIRED in order for a communication to be an offer to buy or sell.
   b. Sale of goods Art 2—communication can be offer to buy or sell w/o price IF PARTIES SO INTEND. Court will supply the term.
2. vague or ambiguous material terms not an offer under common law or the UCC
   a. for ex: offer to sell for “fair/ appropriate/ reasonable price” is not an offer bc too vague.
   c. how can a communication w no price b ok, but an offer for fair price is not ok.
   i. bc if no price—possible that they’ve done biz before
   ii. or that they were willing to commit w/o price
   iii. but on the other hand if they’ve tried to say smth about price, but what they’re saying is still vague or unsettled, means they’re not at commitment, still working it out
3. Requirements contracts/ output contracts –> allowed so long as NOT vague or ambiguous
   can increase demands so long as the increase is in line with prior demands, not in an unreasonably disproportionate manner.

Question 5

Possible problems of context in having a valid offer

Answer 5

1. general rules: an ad or price quote is NOT an offer
2. exceptions:
   a. ad can be unilateral offer if it is in the nature of a reward. for ex $100 reward to anyone catches the flu after using its smoke ball as directed
   b. Ad can be an offer if it specifies quantity and expressly indicates who can accept. For ex: 1 fur coat $10—first come first served
   c. Price quote can be an offer if sent in response to an inquiry

Question 6

4 ways of terminating an offer

Answer 6

lapse of time– either time stated or reasonable time, death of party prior to acceptance, words or conduct of the OR (revocation) , words of the offeree (rejection)

Question 7

Revocation

Answer 7

Revocation through words or conduct of OR, i.e. revocation. Only person who can revoke is the OR (EE may reject).

1. later UNAMBIGUOUS statement by OR to EE of unwillingness or inability
   OR
2. later UNAMBIGUOUS conduct by OR indicating an unwillingness or inability to k that EE is aware of
3. Multiple offers are not a revocation. If I make an offer to one,and an offer to another, and first offeree finds out of multiple offers ≠ revocation until first offeree learns that another offer has ACTUALLY gone through.

Question 8

What offers are irrevocable?

Answer 8

4 situations of irrevocable offers: options, firm offers, foreseeable detrimental reliance, part performance on unilateral k
1. Option: when OR has
a. promised not to revoke (to keep it open)
AND
b. this promise is supported by a payment or other consideration (option)
c. Irrevocable even by the party who bought the option, for ex. if he repudiates before time is up

2. UCC “Firm offer rule”: offer cannot be revoked for up to 3 MONTHS if
   1) for goods, 2) signed and writing 2) party is a merchant 3) reasonable time period under 3 months
   d. If no time period stated, courts will supply time period up to 3 months what they think is reasonable
   i. as logn as there’s still a clear offer not to revoke.
   ii. If period longer than 3 mos is provided, court will whittle it down to 3 months
   e. unlike option, you don’t have to have consideration to keep the option open.
3. Reliance – third way offer becomes irrevocable: if
   a. reliance
   b. that is reasonably foreseeable
   c. AND detrimental
   d. “bid” = offer
   i. for ex. subcontractor making a bid that contractor relies on. Irrevocable
4. Unilateral k: start of performance pursuant to offer to enter into a unilateral k makes that offer irrevocable for a reasonable time to complete performance. Mere preparation is not enough to make an offer irrevocable.
   a. acceptance “only by” performance.
   b. Mere preparation is not enough, for ex buying painit in preparation for contract is not enough.

Question 9

Method of acceptance

Answer 9

i. OR can control the method of acceptance (e.g. offer can say acceptance only by performance), or time that a distance acceptance is effective (effective only when received) or whether EE must give notice of acceptance by performance.

Question 10

Is starting to perform an aceptance

Answer 10

i. General rule: start of performance is acceptance. Treated as implied promise to perform. if OR may not find out otherwise, offeree must give offeror notice within reasonable time or offeror may be discharged.

ii. Exception: start of performance is not acceptance of unilateral k offer. COMPLETION of performance is required.
but start of substantial performance of a unilateral k makes that k irrevocable for a reasonable amount of time.
2. Unilateral k cannot be accepted by a promise.
3. EE not contractually obligated to finish performance of unilateral k.
4. If EE stops performing halfway through, not a breach

Question 11

Mailbox rule

Answer 11

i. First: all communications other than acceptance are effective only when received
ii. Second, acceptance is GENERALLY effective when mailed
iii. Third, if a rejection is mailed before an acceptance is mailed, then neither is effective until received
1. for ex: rejection mailed aug 8. aug 9, changes his mind and mails acceptance. whatever arrives first controls.
iv. Fourt, you cannot use the mailbox rule to meet an option deadline

Question 12

Acceptance if seller sends the wrong goods

Answer 12

3. Third possible acceptance fact pattern: the seller sends the “wrong” goods:
   a. General rule: acceptance and breach
   b. Accomodation (i.e. explanation) exceptions: counteroffer and no breach.

Question 13

Who can accept an offer

Answer 13

i. Generally an offer can be accepted only by
1. a person who knows about offer at time of acceptance
a. relevant for rewards and prizes—if you find dog not knowing of reward, not acceptance of offer
2. the person to whom it was made, ORs cannot be assigned, options can be assigned unless the option otherwise provides.

Question 14

Auction contract accpetance

Answer 14

i. Sale by auction complete when the auctioneer so announces by the fall of the hammer.
ii. Auction sale is with reserve unless the goods are explicitly put up without reserve
1. with reserve—means the auctioneer may withdraw the goods at any time until he announces completion of the sale.

Question 15

Legal reasons not to enforce an agreement, list

Answer 15

a. k is more than agreement, some agreements are not enforceable.
b. Legal reasons to not enforce an agreement include

i. lack of consideration for the promise at issue
ii. lack of capacity
iii. SOF
iv. existing laws prohibiting performance
v. public policy
vi. misrepresentations
vii. nondisclosure
viii. duress
ix. unconscionability
x. ambiguity in words
xi. mistakes at the time of the agreement as to the material facts

Question 16

Lack of consideration. What is consideration

Answer 16

7. Reason for non-enforcement: lack of consideration/consideration substitute

a. What is consideration? To determine
i. First, identify the person who is not doing as promised
ii. Second, ask whether that person bargained for something
iii. Third, look at the person who is trying to enforce the promise and ask what their bargained-for legal detriment is
ii. Bargained for: asked for by the promisor IN EXCHANGE for her promises.
iii. Legal detriment: anything that takes away a right, even if it’s not something you’d have done anyways.

Question 17

Promise as consideration

Answer 17

one promise can be consideration for another promise. for ex promise to sell and promise to buy

1. unless it’s an illusory promise.
   a. illusory promise—one you have the right to terminate at time. “I promise to do this unless I change my mind.” not a promise.
   i. never the right answer on bar
   b. A need to give advance notice is a bargained for detriment, tho

Question 18

Adequacy of consideration

Answer 18

nominal/sham consideration not on bar. amount is irrelevant.

Question 19

Past consideration

Answer 19

1. General rule: not consideration.
   a. for ex: A saves B’s life. C then promises to pay $3k for saving life, but C changes his mind. no consideration. no bargained for exchange.
2. Exception: expressly requested by promiser AND expectation of payment by promisee
   a. For ex: if C sees B in danger and asks A to save B, knowing that A will expect to be paid. Later C promises 3k, and yes k

Question 20

Preexisting contractual or statutory duty rule

Answer 20

a. To modify contract, generally requires new consideration. Because doing what you already are legally obligated to do –> not new consideration

c. Exception: 3p promise to pay.
i. or 3P agrees to pay the additional amount is allowed, even if no new consideration.
but suretyship must still satisfy SOF

d. Exception: something unexpected happened after the contract made.
i. for ex. in concert hall speakers stop working, and A offers B $5k more to still perform.

2. Article 2: does not have a preexisting legal duty rule. New consideration is not required to modify a sale of goods contract. Good faith is the test for changes to an existing sale of goods k.
   a. merchants often know real price, might mess up. they do biz w each other a lot. want them to be able to bind themselves instead of breaching.

Question 21

Part payment as consideration for release, i.e. promise to forgive balance of debt:

Answer 21

If due and undisputed, then part payment is NOT consideration for release.
1. there’s no new detriment for D.

If not yet due or disputed
early payment or part payment of disputed debt MAY be consideration for release.
early payment/ giving up dispute is a legal detriment

Question 22

Consideration substiutes

Answer 22

i. substitutes:
1. a written promise to pay an obligation for which there is a legal defense is enforceable without consideration
a. for ex defense of SOL, but D promises C he’ll pay anyways. still enforceable k.

2. Promissory estoppel– leading someone to detrimentally rely will sub for consideration
   1) promise and 2) reliance that is reasonable, detrimental and foreseeable

b. Comparison of consideration and promissory estoppel
i. look for consideration first and only then go to promissory estoppel.
ii. an act/ detriment may not be bargained for, but it may still be promissory estoppel.
1. someone does something they weren’t asked to do. but the other party should have anticipated you’d do it anyways/

Question 23

LAck of capacity, who lacks capacity

Answer 23

Reason not to enforce
a. Who lacks capacity to k?

i. infants—under 18
1. lack capacity to enter, may gain capacity if the turn 18 over course of performance
2. otherwise must disaffirm w/in reasonable time after turning 18.
3. Disaffirming discharges all liability.

ii. mental incompetents—lacks ability to understand agreement or
iii. intoxicated persons, IF OTHER PARTY HAS REASON TO KNOW

Question 24

Consequences of incapacity

Answer 24

i. Right to disaffirm by person without capacity
1. only the incapacitated person can disaffirm
2. so even if the incapacitated person performs, the other party can’t refuse to perform in response by claiming incapacity.

ii. Implied affirmation by retaining benefits after gaining capacity.
1. for ex Buyer is 17, Buyer does not pay but continues to retain the benefits.

iii. Quasi-k liability for necessaries.
1. person who doesn’t have capacity is legally obligated to pay for things that are necessary such as food, clothes, meds, or shelter. but that liability is based on quasi-k law, not k law.
i. NO K LIABILITY even for necessaries if lacks capacity.
1. will have to pay only FMV

Question 25

SOF defense

Answer 25

SOF is a statute designed to prevent fraudulent claims of the existence of a k.

Makes it harder to have a false or fraudulent claim. Must have objective proof before claimant gets its day in court (other than just testimony that a k exists). Proof required of either

performance
or a writing signed by the ∆.

SOF is in essence a barrier bw a litigant asserting a k claim and having a whole trial on whether a k even exists.

But times have changed, courts have limited SOF a lot. Judges think they’re smart enough to tell whether there really was a k in the first place. Also judges want people to get their day in court.

Mylegs: marriage, year, land, executors hip, goods over 500, suretyship

Question 26

SOF: promises to answer for the debts of another

Answer 26

1. the promise must be COLLATERAL to another’s promise to pay.

remember: no new consideration is needed to modify to add a suretyship

Main purpose exception: If the main purpose of the suretyship obligation is actually for the promisor’s own economic interest, then it is a main purpose, and not subject to statute of frauds.

a. For ex: B is a painter who buys paint to paint C’s house, and C provides surety of the purchase.
i. main purpose is to get C’s house painted.
ii. means that we don’t need a writing.
iii. no SOF defense.

Question 27

SOF k: service k not capable of being performed within a year from the time of the k

Answer 27

ii. Service contract not “capable” of being performed within a year from the time of the k.
1. Specific time period, more than a year.
a. for ex. must have in writing an agreement to work for 3 years. not capable to be finished within one year.
b. BUT, if the 3-yr employment is capable of termination.
i. yes w/in SOF, not capable of being performed in a year.
ii. bc it may be terminated in any way (death also) but wont be performed until at least 3 years.

2. At a specific time, more than a year from a k
   a. for ex. jan 15 2017 contract to perform on dec 24, 2018. cannot be finished within year of date of the k.
3. Task (nothing said about time) – SOF doesn’t apply. “Not capable of being performed” within a year. “Capable” = theoretically possible with unlimited resources.
   a. for ex POSSIBLE to cut all trees on Ds lands
4. Lifetime—SOF doesn’t apply.
   a. theoretically possible they die within a year. could die in a year, then theyd have worked for life

Question 28

Types of ks where SOF may be a defense

Answer 28

Mylegs: marriage, year, land, executors hip, goods over 500, suretyship

i. promises to answer for the debts of another [suretyship]:
ii. Service contract not “capable” of being performed within a year from the time of the k.
iii. Transfers of interest in real estate (with exception for leases of year or less)
iv. Sale of goods for $500 or more,

Question 29

SOF: Sale of goods for $500 or more

Answer 29

1. if something is within SOF and there’s no writing, a court will grant the motion to dismiss unless ∆ has objective proof of agreement
2. UCC 2-201: If both parties are merchants, memo of the terms of sale sent by one party satisfies the SOF unless the other party objects within 10 days.

Question 30

How SOF is satisfied

Answer 30

if an agreement is within SOF then the ∆ can file a MTD or MSJ based on a SOF defense. But π can still get her day in court by providing objective evidence of the k to satisfy concern of fraud. IF π succeeds, SOF is satisfied and no defense.
BUT ∏ JUST GETS DAY IN COURT, DOESN’T WIN

i. Performance:
2. Writing:
3. Delay in responding.
4. Judicial admission:
5. Estoppel:

Question 31

Performance to satisfy SOF

Answer 31

1. SOF can be satisfied by performance. 5 rules for satisfaction of the SOF by performance vary depending on whether the k is a real estate k, services k, or sale of goods k

a. Performance and transfer of real estate (performance rule 1)
i. part performance satisfies SOF in transfers of real estate. Requires any two of the three
1. improvements to the land
2. payment
3. possession

b. Performance and services ks
i. Full performance by either party satisfies SOF
ii. Part performance of a services k does NOT satisfy the SOF
1. can’t recover under k law.
2. BUT may recover under quasi-k law.
a. only through equity

c. Part performance and sale of goods contracts:
i. Seller’s part performance—ordinary goods
1. part performance satisfies SOF to the extent of the performance
a. delivered—no SOF defense
b. undelivered—yes SOF defense.

ii. Seller’s part performance—specially manufactured goods
1. if goods are specially manufactured, then SOF satisfied as soon as seller makes “substantial beginning” i.e. enough work that she is working on a custom made/ made to order

Question 32

Writing to satisfy SOF

Answer 32

reqs of SOF can be satisfied by a writing. BUT
not every writing satisfies reqs and
reqs can be satisfied without a writing.
a. SOF other than article 2
i. look at the contents of the writing or writings—all material terms test. must include
1. all material terms
2. must be signed AT LEAST by the ∆, i.e. the person who is asserting the SOF defense (doesn’t matter if the π signed)

b. Article 2 of SOF: requirements to satisfy writing
i. indication that there is a k for sale of goods and contain the quantity
ii. must by signed by the ∆
1. exception: txs bw two merchants where there is a delay in responding.

Question 33

Delay in responding to satisfy SOF

Answer 33

a. When one merchant receives a signed writing from another asserting a k to buy or sell stated # of goods, the recipient’s failure to timely respond that ther is no k provides objective evidence that satisfies the SOF.
b. If one biz person gets a letter that looks like a one sided k, they’d answer the letter. failure to respond is basically the objective proof.

Question 34

Judicial admission to satisfy SOF

Answer 34

a. if the ∆ is asserting a SOF defense admits in a pleading or testimony that he entered an agreement with π (eg. we agreed but never put anything in writing) the purpose of the SOF is satisfied – no SOF defense.

Question 35

Estoppel to satisfy SOF

Answer 35

a. some cases hold that the π reliance on the ∆ oral promise to put the agreement in writing, then the ∆ can estop the ∆ from asserting a SOF defense

Question 36

Written proof of authorization to enter into k for someone else: SOF

Answer 36

i. Issue is when do the rules of law require that a person have written authorization in order to execute a K for someone else.
ii. Rules of law require that the authorization must be in writing only if the k to be signed is within the SOF, i.e. the authorization must be of equal dignity with the k.

Question 37

Written proof of K modification: SOF

Answer 37

a. if deal with alleged change would be within SOF→ alleged modification must be in writing
i. for ex. orig lease is 1 year, L claims it was later increased to 3 year. YES need written evidence of alleged modification
ii. contra. orig lease for 3 years. T later claims they reduced lease from 3 years to one year. K law doesn’t require written evidence of the alleged modification.

iii. k of wine for $600, later claim they reduced price to $3. NO NEED FOR WRITTEN EVIDENCE.
1. but may be hard to convince the court that the deal has been changed.

Question 38

K provisions requireing written modification

Answer 38

k says all modifications must be in writing
i. Under common law, k provisions requiring that all modifications be in writing are not effective -> ignore k language.

ii. Under UCC, k provisions requiring written modifications are effective unless waived.

Question 39

Illegality

Answer 39

a. Illegal subject matter—if subject matter is illegal, agreement is not enforceable.
i. for ex. hit man ks

b. Illegal purpose—if subject is legal, the agreement is enforceable if the π did not have reason to know of ∆’s illegal purpose
i. for ex. D contracts with Delta for ticket from LA to Chi to go kill someone. if D doesn’t pay, Delta can recover.

Question 40

Public policy to bar enforcement

Answer 40

a. Courts can refuse to enforce an agreement bc of public policy. Look for an
exculpatory agreement that exempts intentional or reckless conduct from liability or
a covenant not to compete without reasonable need or reasonable time and place limits.

Question 41

Misrepresentation to bar enforcement

Answer 41

i. a statement of fact before the k. FACT not opinon)
ii. by one of the contracting parties or her agent
iii. that is false
iv. that is fraudulent or material
v. AND that induces the k.

Question 42

Nondisclosure to bar enforce

Answer 42

a. not tested as much as misrepresentations. typically don’t matter b/c no general obligation to disclose.

b. Generally, person making a k has no duty to disclose what she knows. Look for fiduciary-like relationship or concealment as exceptions to the general rule.
i. for ex rust on car so I paint whole thing orange.
ii. or for ex. nondisclosure bw close friends.

Question 43

Duress or undue influence to bar enforcement

Answer 43

a. Physical duress. - excused
b. Economic duress 1) improper threat + 2) no reasonable alternative for the other party

ii. ex of economic duress.
1. D and P have k to sell 100 pounds for 2k. D refuses performance until P pays 2500. P has no other source so agrees to pay.
a. p can get out f the agreement to pay the additional 500

c. Undue influence
i. special relationship bw the parties
ii. improper persuasion of the weaker by the stronger

Question 44

Unconscionability to bar enforcement

Answer 44

ii. empowers court to refuse to enforce all or part of an agreement. Two part test:

1. procedural unconscionability
   a. For ex: inconspicuous shifting of risk provisions of risk that is usually borne by one side to the other, esp if it’s in fine print
   ii. take it or leave it or contracts of adhesion, and no other option (for ex, there’s no possible way to get a car bc all dealers have these kinds of ks.)
   iii. exculpatory clauses for intentional wrongful acts (negligent acts ok, as long as they are conspicuous)
   iv. limits on remedies—not unconscionable unless inconspicuous.
   d. Must also have great differences in bargaining power for something to be unconscionable.
   unfair surprise

b. AND substantive unconscionability —harshness of the terms.
must have both procedural and substantive.
2. must be unconscionable at the time the k was made.
a. for ex. if something becomes unconscionable because of changed circumstances, then not unconscionable

if unconscionable WHENMADE, court may

i. refuse enforcement
ii. enforce the remainder without the unconscionable clause
iii. limit the application of a clause to avoid an unconscionable result.

Question 45

Ambiguity in the agreement as a reason not to enforce

Answer 45

a. no k if
1) material term with at least 2 reasonable meanings, 2) each party has different interpretation 3) neither party knows of the other’s interpretation

b. there must be a word in the k that has two different meanings!!
i. for ex. k for cotton on the peerless. there are 2 peerlesses. neither knows there are two ships, one in October one in December.
ii. But if one party knows there are two ships named peerless.
1. then there is a k.
2. that party has obligation to clarify the term.
3. we go with the version understood by the person who DIDN’T know of the two meanings

Question 46

Mistake as a reason not to enforce

Answer 46

a. Unilateral mistake
- generally no relief for mistake if you bear the risk (everyone bears risk of OWN mistake).
- UNLESS (palpable mistake exception): the other party knows or had reason to know of the mistake
1. ex. big gap between offered prices in a bid
c. Unilateral mistake and modification: if one party modifies but loses out because of modification–> cannot recover.

b. Mutual mistake
i. Relief for mutual mistake only if both parties are mistaken (not just uncertain) about existing facts. Even if both are mistaken, no relief if the person seeking relief bears the risk of the mistake
Who bears the risk–> anyone who is cheapest cost provider of information (contractor v. homeowner for ex.) or if parties were consciously aware of ignorance.
ii. ex. B buys cow from S and they both are certain it is barren, but a vet could have determined that it was fertile;
1. no relief: there is a mutual mistake but S assumed the risk (b/c could have determined whether it was fertile, so it was S’s own mistake)
2. relief possible if nobody could have determined the cow was fertile, and parties were justifiably certain it was not

3. Mistake in value does not equal a defense
4. the mistake that matters is that of the breaching party
5. the breaching party bears the risk of their own mistakes

v. mutual mistake of material fact allows a rescission remedy

Question 47

Consideration for modification

Answer 47

1. Modification of k terms:
   a. generally: k cannot be modified unless supported by new consideration.
   i. modification is due to circumstances that were unanticipated by the parties when the k was made

c. UCC: allows good faith promises of new and different terms to be valid even without consideration.
d. BUT if the NEW K falls within the SOF → must be in writing.

Question 48

Discharge by impracticability

Answer 48

if one party has 1) extreme and unreasonable difficulty/ expense + 2) nonoccurence was a basic assumption of the parties (was this an unassumed risk?)

b. UCC–> Seller discharged to the extent of impossibility or impracticability
ii. Things like shortage of raw materials, or inability to provide because of war, strike, embargo or unforeseen shut down of major supplier. Catastrophic crop failures.

Question 49

Discharge by mutual recession: unilateral k

Answer 49

a. Mutual recission: express agreement to rescind. This is its own k supported by consideration.
i. BUT if rights of 3rd party have already vested, the k cannot be discharged by mutual recission by the OR and EE

1. Unilateral k—for an effective recission, the recission must be supported by one of the following
   a. Offer of new consideration by the nonperforming party
   b. Elements f promissory estoppel
   c. Manifestation of intent by the original offeree to make a gift of the obligation owed her.

Question 50

Discharge by mutual recission: bilateral k

Answer 50

2. Partially performed bilateral k—usually enforced when bilateral k has been partially performed. Whether the party who has partially performed is entitled to compensation depends on terms of recission.

Question 51

Formalities of mutual recission

Answer 51

iii. can mutually rescind orally. Even if writing says can only be rescinded in writing, unless the k is under SOF, or is for sale of goos (UCC requires a written recission)

Question 52

SOF and ks for marriage

Answer 52

v. Contracts for marriage must be in writing

prenups and postnups

Question 53

Types of ks

Answer 53

a. Express contract—formed by language, oral or written
b. Implied in fact k—formed by manifestations oof assent other than oral or written language, i.e. by conduct
c. Quasi-k or implied in law—constructed by courts to avoid unjust enrichement by allowing π to bring an action in restitution to recover the amount of the benefit conferred on the ∆

Question 54

Four ways to reject an offer

Answer 54

d. Direct rejection with words
i. 3 methods of indirect rejection
1. counteroffer
2. conditional acceptance
3. additional terms (CL only)

Question 55

First method of indirect rejection: counteroffer

Answer 55

1. general terminatin and creation of new offer.
2. counteroffers do not terminate options. even if a counteroffer for option, can still accept original offer
3. mere bargaining is NOT a counteroffer
   a. words of suggestion, asking questions about changing price

Question 56

ii. Second method of indirect rejection—CONDITIONAL ACCEPTANCE

Answer 56

1. accept but then goes own to use conditions of acceptance
   a. for ex, I accept “if” “only if” “provided” “so long as” “but” or “on condition that

b. CL: conditional acceptance is a rejection and counteroffer that can be accepted by conduct.
i. new term becomes part of the k

c. UCC: rejection but not a counteroffer that can be accepted by conduct.
i. conditional acceptance is never an acceptance
ii. if the other party sends the goods and the buyer pays for the goods, there’s a contract, but its based solely on the conduct of both parties.
iii. new term is NOT included in the contract.

Question 57

iv. Third method of indirect rejection: Additional terms to non- UCC k.

Answer 57

AKA : Mirror image rule.

1. CL: requires that a response to an offer that adds new terms is treated like a counteroffer rather than an acceptance.
   a. AND once you add terms/ change the k, the offer is dead. there’s indirect rejection.
   b. If language added by T was immaterial—facts must be clear it’s truly a minor change, AND it’s common law, then the change is ok.

When there is acceptance but one party throws in another term, without conditioning acceptance on that term–> Can still form a k if sale of goods UCC 2-207. “Battle of the forms” :
a. if there’s a response to an offer that adds additional or different terms, but doesn’t make the new terms a condition of acceptance—generally treated as an acceptance→ a seasonable expression of acceptance. Whether the parties are merchants is irrelevant.

2. Second: is the ADDITIONAL term a part of the k?
   a. Yes–> if both parties are merchants, + new term is not material AND not objected to
   d. Material change—anything that substantialy affets the economic benefits/ risks of the k. Or it changes the usual remedy for breach of k.
   i. Arbitration is a material change

Battle of the forms rephrased. Additional term that is not conditional is added unless

• there is a non-merhant
• a party expressly objects
• the term is material