Contracts

Question 1

What does common law apply to in contracts?

Answer 1

All contracts except sale of goods

Question 2

What does Article 2 of the UCC apply to?

Answer 2

Sale of goods

Question 3

What does Article 2A of the UCC apply to?

Answer 3

Lease of goods

Question 4

What is an express contract?

Answer 4

A contract created by parties’ words (oral or written)

Question 5

What is an implied-in-fact contract?

Answer 5

A contract created by the parties’ actions

Question 6

What is a quasi-contract?

Answer 6

A quasi-contract. Protects against unjust enrichment whenever
contract law yields an unfair result. Restitution is the remedy of last resort

Question 7

What is a bilateral contract?

Answer 7

Where an offer can be accepted in any reasonable way.

Question 8

What is a unilateral contract?

Answer 8

Where a contract can only be accepted by performing

Question 9

What is the contract process (steps to analyze)

Answer 9

1. Was there a contract?
2. Is it legally enforceable?
3. Has it lapsed? Has it been changed?
4. Has the offer been accepted?

Question 10

When does an offer lapse?

Answer 10

An offer lapses after a stated term or a reasonable time has passed

Question 11

Direct revocation

Answer 11

The offeror indicates directly to the offeree

that he has changed his mind about the deal.

Question 12

Indirect revocation

Answer 12

The offeror engages in conduct that

indicates he’s changed his mind and the offeree is aware of the conduct.

Question 13

In what (4) cases can an offer NOT be revoked?

Answer 13

It can’t be “OFFS”

1. Option (An option is a promise to keep the offer open that is paid for)
2. Firm Offer (Art. 2. In a sale of goods, if a merchant promises in a signed writing to keep an offer open, the offer is irrevocable.)
3. Foreseeable reliance before acceptance
4. Starting to perform in unilateral contract

Question 14

Forms of rejection of offer

Answer 14

1. Counteroffer (Operates as a rejection, but mere bargaining does not)
2. Conditional “acceptance” (NO acceptance!)
3. Acceptance varying offer - under CL, mirror-image rule. Under Article 2, offeree’s changes are included only if both are merchants, no material change, and no objection within a reasonable period of time

Question 15

Starting performance in a bilateral contract

Answer 15

Starting performance is acceptance (and therefore carries with it an implied promise to finish the job).

Question 16

Starting performance in a unilateral contract

Answer 16

Starting performance is not acceptance (so there is no obligation to finish the job). Completing performance is acceptance.

Question 17

What is improper performance in Common Law and under Article 2?

Answer 17

CL: Simultaneous acceptance AND breach
A2: (SOG) Simultaneous acceptance and breach unless seller is sending the goods as an accommodation to buyer.

Question 18

When is acceptance effective?

Answer 18

Acceptance is effective when mailed with some exceptions

Question 19

Exceptions to the mailbox rule

Answer 19

1. Offer states otherwise
2. Irrevocable offer
3. Rejection sent first

Question 20

Ambiguity/misunderstanding as a defense

Answer 20

If both are “innocent” then no contract. If only one is “innocent” his meaning prevails

Question 21

Mistake about material fact as defense

Answer 21

Question is whether the mistake as ACTUALLY material. Value usually is not deemed material

Question 22

Unilateral mistake as defense

Answer 22

One party’s mistake is not a fatal flaw unless other party knew or had reason to know about the mistake.

Question 23

Is past consideration deemed to be consideration?

Answer 23

On MBE: NO
On NYBE: “Past consideration” is consideration if it’s expressly stated in a
signed writing and can be proven

Question 24

When is contract modification ok?

Answer 24

Under CL: New consideration is required to modify a contract. Performing a preexisting duty is not enough
Art 2: Consideration is not required to
modify a contract, but you must show good faith.

Question 25

Destination contract

Answer 25

S agreed to tender goods at particular location. S must, at the destination, put and hold conforming goods at the buyer’s disposition. The seller must also give the buyer any notice of tender that is reasonably necessary and provide the buyer with any documents of title necessary to obtain delivery. Price is due when shipment reaches its destination

Question 26

Shipment contract

Answer 26

The parties intend the goods to be moved by common carrier, but the seller has not agreed to deliver them at a particular destination. In the absence of an agreement otherwise, the seller need not see that the goods reach the buyer, but must: put the goods into the hands of a reasonable carrier and make a reasonable contract for their transportation to the buyer; obtain and promptly tender any documents required by the contract or usage of trade or otherwise necessary to enable the buyer to take possession; and promptly notify the buyer of the shipment. Price is due when shipment put in hands of carrier.

Question 27

Noncarrier case

Answer 27

parties did not intend that the goods be moved by carrier. In a proper tender of delivery, the seller must put and hold conforming goods at the buyer’s disposition for a time sufficient for the buyer to take possession. The seller must give the buyer notice reasonably necessary to enable her to take possession of the goods.