Essay Approaches

Question 1

Mixed Contract

Answer 1

When a contract includes both goods and services, whichever one predominates will determine the governing law.

Question 2

Merchants include:

Answer 2

• A person who regularly deals in the type of goods involved in the transaction;
• A person who by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction;
• In some instances, any business person when the transaction is commercial in nature

Question 3

Formation of Contract

Answer 3

A valid contract requires offer, acceptance, consideration, and no defenses.

Question 4

Offer

Answer 4

An offer requires a promise, terms, and communication to the offeree.

Question 5

Promise

Answer 5

A promise is a statement indicating a present intent to enter into a contract.

Question 6

Terms

Answer 6

CL: All essential terms must be provided (parties, subject matter, price, quantity)
UCC: The essential terms are parties, subject matter, and quantity

Question 7

Place for delivery

Answer 7

If the contract is silent, the default place for delivery under the UCC is the seller’s place of business.

Question 8

Communication

Answer 8

The buyer must know of the offer

Question 9

Bilateral contract

Answer 9

Contract in which parties exchange promises; can be accepted by a promise OR by beginning performance.

Question 10

Unilateral contract

Answer 10

Contract in which the offeror makes a promise and the offeree must perform; can only be accepted by complete performance.

Question 11

Irrevocable Offers

Option contracts (CL)

Answer 11

• An offer where the offeror promises to hold the offer open for a certain period of time.
• The offeree must pay consideration to the offeror to hold the offer open.

Question 12

Firm Offers (UCC)

Answer 12

A firm offer exists if:
* The offeror is a merchant; and
* The offeror gives assurances that the offer will remain open in a signed writing

Irrevocability cannot exceed 90 days

Question 13

Termination of Offer

Revocation

Answer 13

An offer can be terminated if the offeror revokes the offer prior to acceptance.

• Revocation is effective when received.

Question 14

Constructive Revocation

Answer 14

If the offeree acquires reliable information that the offeror has taken definite action inconsistent with the offer, the offer is automatically revoked.

Question 15

Irrevocable Offers

Unilateral Contract

Answer 15

If the offeree has started to perform, the offeror cannot revoke.

Question 16

Rejection

Answer 16

If the offeree rejects the offer, it will be terminated

Question 17

Counteroffer

Answer 17

Acts as a rejection of the original offer and creates a new offer.

• A “mere suggestion” of a different term or a “mere inquiry” about changing the terms is not a counteroffer and will not terminate the original offer.

Question 18

Lapse of Time

Answer 18

If an offer is not accepted within a reasonable amount of time, it is deemed terminated.

Question 19

Death of the offeror

Answer 19

If the offeror dies before acceptance, the offer is terminated.

Question 20

Acceptance

Answer 20

Acceptance is the objective manifestation by the offeree to be bound by the terms of the offer.

Question 21

Manner of Acceptance

Answer 21

• Any reasonable means of acceptance is allowed, unless governed by the offeror.
• Silence is generally not acceptance, unless the offeree has reason to believe that silence will constitute an acceptance.

Question 22

UCC counteroffers

One or both parties are not merchants:

Answer 22

• An acceptance from the offeree with changes or additions will be a valid acceptance.
• However, the contract will not include the changes or additions unless the offeror agrees to them.

Question 23

UCC counteroffers

Both parties are merchants:

Answer 23

• An acceptance from the offeree with changes or additions will be a valid acceptance.
• The contract will include the changes or additions unless:
  (a) They materially alter the terms of the original offer;
  (b) The original offer limits acceptance to the terms of the offer; or
  (c) The offeror objects to the changed or new terms.

Question 24

Mailbox rule

Answer 24

• An acceptance is valid when placed in the mail
• Exception: If there is an option contract or firm offer, the acceptance is only valid when received before the offer expires.
• Special Issue: If a party mails a rejection of an offer and then mails an acceptance to the offer, the first communication to be received is effective.

Question 25

Consideration

Answer 25

Requires a bargained-for exchange in the legal position between the parties. Both sides must have a legal detriment.

Question 26

Legal detriment

Answer 26

Can take the form of a promise to do/not do something, or performance/refraining to perform.

Question 27

Adequacy of consideration

Answer 27

A court will not look to the adequacy of the consideration.

Question 28

Gifts

Answer 28

A gift from one party is not supported by consideration because the receiving party is not suffering a legal detriment.

Question 29

Preexisting duty rule

Answer 29

A promise to perform a preexisting legal duty will not qualify as consideration because the promisor is already required to perform by the promisor.

Question 30

Material benefit rule

Answer 30

A promise not supported by consideration may be enforceable if it is made in recognition of a significant benefit previously received by the promisor.

Question 31

Promissory estoppel

Answer 31

• The promisor should reasonably expect the promise to induce action or forbearance,
• The promise actually induces action or forbearance, and
• Injustice can be avoided only by enforcement of the promise.