Contract Formation Flashcards
(32 cards)
What is an express contract created by?
Words (oral or written).
What is an implied-in-fact contract created by?
Created by conduct.
What is a quasi contract?
It is restitution that creates a quasi contract to protect against unjust enrichment when contract law yields an unfair result.
What is a bilateral offer?
Where offer can be accepted any reasonable way.
What is an unilateral offer?
Where offer can be accepted only by performance.
Is an advertisement an offer?
No, not unless quantity is given.
Is an open price term too indefinite/vague to be enforced?
Generally no, the court will read in a reasonable price except in a contract for sale of real property
Requirements contract too indefinite/vague to be enforced?
Generally okay under Article 2 despite uncertain quantity. However, even if in good faith, buyer cannot take seller by surprise; any increase must be in line with prior demands
When does an offer lapse?
After a stated term or a reasonable time has passed.
When is an offer revoked?
When offeror revokes offer. This can be via direct or indirect conduct.
What are the four exceptions to revocation?
1) AN OPTION (Promise to keep offer open that’s paid for) in NY, can be written not paid for and enforceable.
2) FIRM OFFER (Article 2, in SOG, if merchant promises in signed writing it is irrevocable)
3) FORSEEABLE RELIANCE BEFORE ACCEPTANCE. ie subcontractors.
4) STARTING TO PERFORM UNITLATERAL (MBE: Cant revoke once I begin, NY can revoke until i complete performance).
When is revocation effective? i.e. what time?
When it is received.
When is an offer rejected?
When offered rejects it.
Is a counter offer a rejection?
Yes it does operate as a rejection but mere bargaining doesn’t.
Is conditional acceptance acceptance?
No!
Can I accept but vary offer?
At common law it must mirror the offer.
Art 2 SOG, doesn’t have to mirror offer, adding/changing term doesn’t prevent acceptance, MUST BE 1) Merchants, 2) No material change 3) No objection in reasonable time
What if I die before accepting the contract?
Death of either party before acceptance terminates a revocable offer.
When is an offer accepted with a bilateral contract?
When you start performance.
When is an offer accepted with a unilateral contract?
Completion is acceptance.
Is silence acceptance?
No.
When is acceptance effective when you are mailing it?
When it is mailed.
What are the 8 defences to an agreement being legal enforceable?
1) Lack of capacity
2) Economic duress
3) Misrepresentation/non disclosure of a material fact
4) Ambiguity/misunderstanding
5) Mistake about material fact, a) mutual mistake or b) unilateral mistake
6) No consideration
7) Public policy
8) Unconscionability
Explain lack of capacity
1) Incapacitated defendant may disaffirm contract BUT
2) but implied affirmation if you retain benefit after regaining capacity.
Is past consideration consideration?
No, not on MBE, it is in NY if expressly stated in writing.
