Contracts Flashcards
The UCC governs ___
Common law governs ___
UCC governs the sale of moveable goods. Common law governs land sale contracts and contracts for service.
Offer
An offer is the objective manifestation of willingness to be bound to reasonably certain terms communicated to an offeree and grants the power of acceptance in the offeree
An offer is terminate by…
Revocation
Rejection
Counteroffer
Offers are generally revocable unless they are…
Option K, Firm Offer, Unilateral K
Option K
A contract with additional consideration to keep an offer open for a period of time
Firm offer
An offer from a merchant, in writing, signed, promising to hold the offer open.
No additional consideration needed.
Unilateral K
A promise for performance. Once you begin performing, the offer becomes irrevocable.
Acceptance is…
An express intent to be bound
Mirror image rule
The common law follows the mirror image rule, so acceptance must be identical to the offer, otherwise no contract is formed
Deviant acceptance
The UCC follows the rule of deviant acceptance so a contract is formed even if the acceptance contains additional or different terms
If one party is not a merchant and the acceptance contains additional or different terms… what happens?
the additional or different terms are proposals and are not part of the K (the K was accepted, the additional/different terms are not enforceable)
If both parties are merchants and an acceptance contains additional terms… what happens?
The additional terms become part of the K unless:
1) they materially alter the K;
2) the offer expressly says its contingent on acceptance as the offer is; or
3) the offeror completely rejects the additional terms.
If both parties are merchants and the acceptance of an offer contains conflicting terms… what happens?
UCC knock out rule applies–the conflicting terms in the offer and acceptance are both not incorporated.
Mailbox rule
Acceptance is effective when sent
If offeree sends rejection letter first, then an acceptance letter
Mailbox rule does not apply, whichever letter arrives first will be effective
If offeree sends acceptance letter first, then a rejection letter
The mailbox rule applies unless the offeror receives the rejection letter first and changes their position in reliance on it.
Consideration
A bargained for exchange. FL uses the legal detriment test.
Promissory Estoppel
when one party promises the other party, and the party relies on the promise to their detriment
When do you raise promissory estoppel?
When there is no consideration but there was a promise that another party relied on to their detriment
Modification of Ks under common law
Under common law, modification is not enforceable unless there is additional consideration. In FL, any change in performance is sufficient consideration for modification.
Modification of Ks under the UCC
A modification is enforceable if it is done in good faith
Mistake
Defense to K formation
A mutual mistake by both parties is a defense if the mistake is:
- a basic assumption of the K;
- has a material adverse effect on the agreed upon exchange; and
- the adversely affected party did not assume the risk of mistake.
Statute of Frauds
Ks that must be in writing
M- Marriage
Y- Ks that cannot be performed in less than 1 year
L- land sale Ks
E- executor
G- grantor
S- sale of goods > $500
Exception to Statue of Frauds
Part performance in land Ks where there is payment + possession of the land + improvements.
For all other Ks, there must be some sort of performance.
