Contracts (Offer and Consideration) Flashcards
(25 cards)
Offer
requires an outward manifestation that signals that acceptance will conclude the deal
Ways to Revoke Offer
(1) lapse of time;
(2) death or incapacity of a party;
(3) revocation by the offeror; or
(4) rejection by the offeree
Revocation of Construction Offer
The majority rule is that where a general contractor uses a particular subcontractor’s bid to formulate his own, an implied contract is created via promissory estoppel. This prevents the subcontractor from revoking the bid.
Unilateral Contract
An offer seeking performance in return
Revocation of Unilateral Contract
Once the offeree begins performance, an option contract is created and the offeror may not revoke
* In NY, an offer may be revoked any time before completion of the offeree’s performance.
Bilateral Contract
Offeror and offeree exchange mutual promises (offeror is seeking a promise in return)
Acceptance (Common Law)
Requires that the acceptance
(1) be known by the offeree,
(2) mirror the terms of the offer and
(3) be communicated to the offeror
Acceptance (UCC)
Shipment of non-conforming goods and battle of forms are used. Mirror image rule is not required.
Shipment of Nonconforming Goods
Under the UCC, a seller can ACCEPT a buyer’s offer to purchase goods by:
(1) a promise to ship conforming goods;
(2) a prompt shipment of conforming goods; or
(3) shipment of nonconforming goods
Battle of the Forms
A so-called battle of the forms occurs when a buyer places an order (the offer) and the seller’s acceptance form contains additional or different terms
Additional Terms
In a transaction between merchants, those terms which address an issue or topic not addressed in the original offer.
They become part of the contract unless they materially alter the contract or unless the offer expressly precludes additional terms.
Different Terms
In a transaction between merchants, those terms which address the same topic in a different manner.
Consideration
A promise must be exchanged for something else of value. A bargained-for exchange or a quid pro quo is required for consideration.
Two basic elements of Consideration
(1) Legal detriment, and
(2) Bargained-for exchange
* In NY, consideration consists of either a benefit to the promisor or a detriment to the promisee.
Insufficient Consideration
When the promise is not supported by any form of consideration.
Often uses terms like want of, not supported, or legally insufficient.
Failure of Consideration
When the party has not performed in accordance with his promise.
Adequacy of Consideration
The value of the consideration is irrelevant for purposes of determining if there is consideration.
Illusory Promise
A promise to perform that leaves the performance to the discretion of the promising party. Not consideration.
Gratuitous Promise
Does not constitute consideration
Promissory Estoppel (Definition)
A promisee who reasonably relies to his detriment on a gratuitous promise may be able to enforce that promise. Promissory estoppel allows the enforcement of promises even where there is no consideration.
Promissory Estoppel (Elements)
(1) Promise
(2) Foreseeable Reliance
(3) Actual Reliance, and
(4) An injustice occurs without enforcement
Statute of Frauds (Definition)
The statute of Frauds provides an important exclusion to the general rule that a contract need not be in writing.
Under the SoF, for a contract to be enforceable, the contract must be evidenced by a writing, signed by the party against whom enforcement is sought.
Statute of Frauds (Categories)
MYLEGS: Contracts …
(1) Upon consideration of marriage,
(2) Not to be completed within one year from the formation of the contract,
(3) For the sale of land,
(4) Of an executor for a duty of the decedent,
(5) Of guarantee/suretyship
(6) For the sale of goods and $500 or more.
Main purpose Rule
Where the primary purpose of a guarantor’s promise is to protect or promote his own economic interests (not the debtor’s), then the agreement is not within the Statute of Frauds (i.e., no signed writing needed).
