Contract Law Midterm

Question 1

Applicable Law

Answer 1

Common Law is the transaction of services, real property, and employment. Uniform Commercial Code is the transaction of goods. Goods is defined as an object that is tangible, movable, and identifiable.

Question 2

1. deals in good
2. occupation in goods
3. hires an agent or broker that has knowledge in goods

Answer 2

Merchant under the UCC

Question 3

When there is both goods and real property/services. _________ determines if UCC or Common Law apply.

Answer 3

Predominant Purpose Test

Question 4

In order for a promise to be enforceable in court, the party must manifest an intent to be legally bound to their promises.

Answer 4

Intent to be legally bound

Question 5

Any missing term or terms that promise to agree at a later date is not an enforceable promise.

Answer 5

Under intent to be legally bound:
Promise to Agree at a Later Date:
Traditional Common Law

Question 6

Agreement with missing terms may be enforced if the missing terms can be implied with reasonable certainty.

Answer 6

Under the Intent to be Legally Bound:
Missing Term:
Modern Common Law

Question 7

there is no problem implying missing terms.

Answer 7

Under intent to be Legally Bound
Missing Term:
UCC

Question 8

the intent is determined by looking to the external or objective appearance of the parties’ intentions as manifested by their actions.
What would a reasonable person understand the parties’ manifestations to mean?

Answer 8

The objective theory of Contracts

Question 9

the manifestation of willingness to enter into a bargain.

what elements need to be shown?

Answer 9

Offer

1. Commitment Language
   a. I will
   b. I offer
2. Contains definite and Certain terms
   a. Q-quantity
   b. T- time of performance
   c. I-identity of Parties
   d. P- price
   e. S- Subject matter
3. Communicated to an identified offeree.

Question 10

They are not considered an offer, unless they invite acceptance without further negotiations.

Answer 10

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Question 11

Acceptance must be within the time given in the offer. If the offer does not state a time then acceptance must be communicated at a reasonable time

Answer 11

Has an offer died?

Lapse

Question 12

What is a reasonable time to accept an offer?

Answer 12

1. In person: when the conversation ends and the parties walk away.
2. On the phone: when the call is over
3. Email: at midnight.

Question 13

When the offeror receives from the offeree a refusal of the terms of the offer.

Answer 13

Has an offer died before Acceptance?

Rejection

Question 14

An offeree’s power of acceptance is terminated when the offeree receives notice that the offeror wants to decline their offer.

Answer 14

Has an offer died before Acceptance?

Revocation

Question 15

the offeree hears from a third person that the offeror changed his mind and does not want to do the offer

Answer 15

Has an offer died before Acceptance?

Indirect Revocation

Question 16

reject the original offer and make the offeree now the offeror with new terms.

Answer 16

Has an offer died before Acceptance?

Counteroffer

Question 17

when someone dies it revokes an offer.
Does the fact of death have to be communicated to the offeree to make it an effective termination of the offer?
What is the only thing that can cancel this term?

Answer 17

Has an offer died before Acceptance?
Death or Incapacity
No
Option Contract

Question 18

separate contract with only one purpose: to make an offer irrevocable. Death of the optioner will not revoke the offer.
When the offeree gives the offeror something (usually money) to keep the offer open.

Answer 18

Has the offer been kept alive?

Option contract

Question 19

An offer by a subcontractor that was used by a general contractor to compute bids submitted for a construction job may not be revoked.

Answer 19

Has the offer been kept alive?

Reliance in Construction Contract

Question 20

1. if a merchant makes a
2. written offer
3. giving assurance that the offer will be held open and irrevocable
4. and is signed
5. makes the offer irrevocable for a reasonable time not to exceed three months.

Answer 20

Has the offer been kept alive?

Firm offer only under the UCC

Question 21

Unless the offeror manifests a contrary intention, an offeree who learns of an offer after he has rendered _______ requested by the offer may accept by completing the requested performance.

Answer 21

Has the offer been kept alive?

Part performance

Question 22

Performance or assent must be done with knowledge of the offer.

Ex?

Answer 22

Has the offer been accepted?
Acceptance with notice of offer

ex: If there is a reward on a missing dog and you return the dog without knowledge of the rewards then they do not have to give you the reward.

Question 23

in order to be effective, the acceptance must be a willful act by the offeree

Answer 23

Has the offer been accepted?

Volitional Acceptance

Question 24

Acceptance must be in the manner invited by the offer

Ex?

Answer 24

Has the offer been accepted?
Manner of Acceptance
ex: if the offeror sends the offer through letter than it must be accepted through letter

Question 25

Both parties are giving up something and receiving something in return

Answer 25

Bilateral Contract

Question 26

Only one person promises to give the other person something and they accept it through performance. Does the offeree have to tell the offeror that they completed the performance?

Answer 26

Unilateral Contract Only if the offeror isn't present to see the performance being done.

Question 27

Acceptance must be exactly as stated in the offer.

Answer 27

Has the offer been accepted? | Traditional Manner of Acceptance AKA Mirror Image Rule

Question 28

If unstated, an offer invited acceptance in any manner and by any medium reasonable in the circumstances.

Answer 28

Has the offer been accepted? | Modern Manner of Acceptance

Question 29

A shipment of non-conforming goods does not constitute an acceptance if the seller seasonably notifies the buyer that the shipment is offered only as an accommodation to the buyer

Answer 29

Has the offer been accepted? | Acceptance of Non-Conforming Goods under the UCC

Question 30

Acceptance must be communicated to offeror

Answer 30

Has the offer been accepted? | Requirement of Notice of Acceptance

Question 31

when in previous dealings it is reasonable that the offeree should notify the offeror if the offeree does not intend to accept.

Answer 31

Acceptance by Silence

Question 32

You are free to take your item back as long as the auctioneer hasn't dropped the hammer.

Answer 32

Has the offer been accepted in an auction transaction? | Auction Contract with Reserve

Question 33

only the highest bid can take this item when the auctioneer begins

Answer 33

Has the offer been accepted in an auction transaction? | Auction Contract without Reserve

Question 34

A sale by auction is complete when the auctioneer announces by the fall of the hammer or in other customary manner Where a bid made while the hammer is falling in acceptance of a prior bid the auctioneer may in his discretion reopen the bidding or declare the goods sold under the bid on which the hammer was falling.

Answer 34

Has the offer been accepted in an auction transaction? | Acceptance of Auction Contract

Question 35

1. a definite and seasonable expression of acceptance or a written confirmation which is sent with a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon. 2. Additional terms are only proposals unless there are 2 merchants then merchants are bound unless? 3. conduct by both parties which recognize the existence of a contract is sufficient to establish a contract for a sale although the writings of the parties do not otherwise establish a contract.

Answer 35

Has the offer been accepted even though the acceptance includes additional terms? Battle of the Forms 2. a. statute of limitation: limiting amount to sue someone b. Arbitration: you can't take them to court only arbitrary c. limit on remedies: your recovery is limited

Question 36

What happens with the printed forms in your package? Do they become part of the agreement?

Answer 36

Last Shot

Question 37

1. All the writing on preprinted forms | 2. the terms that are always there when you get your package

Answer 37

Boilerplate

Question 38

When you change the terms on the boilerplate ex: change the price, bargained over, terms handwritten on the form - cost - services - the parties

Answer 38

Dickered Terms

Question 39

The agreement must be 1. bargained-for-exchange of 2. legal value

Answer 39

Consideration

Question 40

Quid pro quo: my promise is motivated by your return promise

Answer 40

Bargain-for-exchange in Consideration

Question 41

is there a benefit to the promisor or detriment to the promisee

Answer 41

Legal Value in Consideration

Question 42

Courts will not weigh consideration Exception: Consideration is not sufficient if it is the transfer of money or fungible goods as consideration for a promise to transfer at the same time and place a larger amount of money or goods of the same quality.

Answer 42

Sufficiency of Consideration Exception: Like-for-like exchange of fungible goods

Question 43

an employer can fire you at any time for any reason. Exception: 1. race, religion, skin color 2. discharge of violation of company handbooks constituting a unilateral contract. 3. Discharges in violation of covenant of good-faith and fair dealing.

Answer 43

Is there an offer for "permanent employment" Presumption of At-Will Employment

Question 44

If you are required to already do something and someone offers you something to do that thing than they do not have to give you what they offered because you are already suppose to be doing it.

Answer 44

Pre-Existing Duty

Question 45

A contract that gives no certainty of getting to fulfil the performance and once the performance is fulfilled then it is a unilateral contract.

Answer 45

Illusory Promise

Question 46

agreements for the seller to sell as much of an item as the buyer requires

Answer 46

Requirement contract

Question 47

the buyer agrees to purchase all of a suppliers output

Answer 47

Output Contracts

Question 48

new contracts that require new considerations

Answer 48

Traditional Common Law Modifications

Question 49

1. the parties voluntarily agree 2. if the promise modifying the original contract was made before the contract was fully performed by either side, 3. the underlying circumstances which prompted the modification were unanticipated by the parties 4. it is fair and equitable.

Answer 49

Modern Common Law Modifications