Fl Contracts Flashcards

Question

requirement contracts - offers under UCC 2

Answer 1

these apply when a company contracts to purchase "all its requirements" of widgets for five years for 4100k per battery. This is valid because even though we do not know # of batteries to be bought based on the buyers needs so long as it is "exercised in good faith." EXCEPTION: unreasonable or disproportionate increase in the buyer's demand even though we do allow quantity to be measured by the buyer's needs and in good faith the quantity cannot be an "unfair surprise" to seller; we simply cannot hold the seller to this demand.

Answer 2

termination 1- lapse of time 2- revocation 3- rejection 4- death

Answer 3

an offer lapses after a stated term or after a reasonable time has passed (WATCH DATES CLOSELY)

Answer 4

if they give you more than one month it is not reasonable; however, it depends on the offer; steel is different than selling bananas which are perishable and expire in a week watch out for dates separated for more than 1 month

Answer 5

offeror revokes offeree rejects offer

Answer 6

an offer terminates when an offeror revokes an offer; an offer can be revoked at ANY TIME before acceptance UNLESS any of these 4 expections exist where an offer cannot be revoked: (1) option contract (2) firm offer (3) foreseeable reliance (4) starting performance of unilateral k

Answer 7

direct - the offeror indicates directly to the offeree that he has changed his mind about entering the deal indirect - (1) the offeror engages in conduct that indicates she's changed her mind and (2) the offeree is aware if the conduct; (watch for an offeror saying something but the offeree is unaware of the statement therefore the offeror has not effectively revoked; however, if the offeree is told by someone else then now they are aware and thus cannot accept the offer (check out the 4 exceptions where an offer cannot be revoked)

Answer 8

(1) option contract (2) firm offer (3) foreseeable reliance (4) starting performance of unilateral k

Answer 9

(1) option contract - a promise to keep an offer open that is paid for with consideration (if no consideration then revocation is at will); 1- no writing required; 2- acceptance effective when received by offeror 3- the mailbox rule does NOT apply for options contracts 4- option is irrevocable for the period stated - not even the offeror could revoke the offer within a 30 day period (watch for an offeree that gives a counteroffer and then accepts. this does NOT kill the original offer because option is open for 30 days OTHER EXCEPTIONS (1) option (2) firm offer (3) foreseeable reliance (4) starting performance of unilateral k

Answer 10

firm offer - UCC 2 (1) In a sale of goods, (2) a merchant promises in a signed writing to keep an offer open, (3) then the offer is irrevocable even WITHOUT CONSIDERATION (as opposed to options contracts) NOTICE ONLY IF THE OFFEROR IS A MERCHANT; applies to buying or selling Note: Under the UCC 2, the terms "merchant" and "signed" are broadly defined; a merchant is a seller operating the business and a signed writing can be on a letterhead or a fax FOUR EXCEPTIONS (1) option (2) firm offer (3) foreseeable reliance (4) starting performance of unilateral k

Answer 11

assurance in writing may be held as irrevocable as an option k if the offeror could reasonably expect offeree would rely to her detriment and the offeree does rely; period of irrevocability cannot exceed 3 months (90 days) unless stated

Answer 12

under the firm offer, exception, if you want to go beyond 3 months pay consideration to be protected by options contract exception if a time period is not stated, the court will place a reasonable time period but not beyond 3 months

Answer 13

1- This is irrevocable. The court places a reasonable time period but not beyond 3 months 2- yes, it is missing a time frame that the offeree is willing to keep the offer open; language must be explicit. It is revocable if communicated prior to acceptance

Answer 14

option - consideration req, if no consideration then revocation at will, acceptance effective when received by offeror, usually 30 days max (with consideration), mailbox rule does not apply firm offer - goods, merchant, promise to keep open, signed writing, irrevocable, no consideration req, usually 3 months max, if wants more than 3 months then consideration is needed, if promise not to revoke and no time period stated, the court palces a reasonable time period BUT not for more than 3 months (90 days), if merchant makes a signed written offer but not language about keeping the offer open then can revoke if communicated prior to acceptance

Answer 15

In a sale of goods, look first for an option (no limits). If you do not have an option, look for a firm offer (subject to several limitations).

Answer 16

Foreseeable reliance before makes the offer irrevocable Therefore, unforeseeable reliance does not even if offeree relied; the offeror could not reasonable foresee when an offeree makes an expensive foundation for a machine People expect the offeree to accept the offer before the offeror accepts the offeree would rely EXCEPTION BIDS: a subcontractor cannot revoke because he knows upfront that the general contractor will rely on SC offer to bid which was incorporated to compute the GC bid; the SC must give reasonable time for the bid to be reviewed OTHER EXCEPTIONS (1) option (2) firm offer (3) foreseeable reliance (4) starting performance of unilateral k

Answer 17

under a unilateral k, offer is accepted by starting performance even if a small start but NOT mere preparation; once performance is started the offer is irrevocable by offeror for reasonable time it takes to perform the work (for example, reasonable time to paint the house) mere preparation to perform - offeree not performed so offeree not protected; anything before performance is not start of performance BUT EXCEPTION #3 applies foreseeable reliance OTHER EXCEPTIONS (1) option (2) firm offer (3) foreseeable reliance (4) starting performance of unilateral k

Answer 18

CL: a revocation is effective on receipt [no mailbox rule]; once an offer has been accepted it is too late to revoke. Revocations are NOT effective when sent but upon receipt. Offeree can sue for breach. (CL only?) receipt of revocation by offeree or person authorized to receive or deposited in an authorized place UCC: notice is rec'd when it comes to their attention, delivered to a place of business where communication was made or another communication was held out by that person as a place of receipt of such communication. Rec'd when brought to offeree's attention or should've been brought to attention

Answer 19

``` Remember the big picture: Formation Step 1 Offer - define 1- Ads 2- Indefiniteness 3- Open Price Terms in Sales K UCC 2 v. Common Law 4- Requirements Contracts UCC 2 ```

Answer 20

Remember the big picture: Formation Step 2 Termination 4 Methods of Termination 1- Lapse of Time ``` 2- Revocation a- Option b- Firm Offer c- Foreseeable Reliance Before v. After Acceptance d- Starting to Perform a Unilateral k ``` 3- Rejection* a. Counteroffer b. Conditional Acceptance c. Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule) 4- Death

Answer 21

Remember the big picture: Formation Step 2 Termination 4 Methods of Termination 1- Lapse of Time ``` 2- Revocation a- Option b- Firm Offer c- Foreseeable Reliance Before v. After Acceptance d- Starting to Perform a Unilateral k ``` 3- Rejection* a. Counteroffer b. Conditional Acceptance c. Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule) 4- Death

Answer 22

an offer terminates when the offeree rejects it (an "inappropriate response") WATCH OUT for offeree responses that look like acceptance but are actually rejections: counteroffers, conditional acceptances, and additional terms 3- Rejection* a. Counteroffer b. Conditional Acceptance c. Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule)

Answer 23

``` #1 of 3 Counteroffer Operates as a rejection, but "mere" bargaining" does not EXAM TIP: Look for punctuation at the end of the offeree's response. If offeree ends response with a period that is a counter offer. If it ends with a question mark, it is mere bargaining. ```

Answer 24

``` #2 of 3 Conditional Acceptance Operates as a rejection AND counteroffer NOT AN ACCEPTANCE because it is conditional ``` WATCH FOR words like "on the condition that"

Answer 25

``` #3 of 3 Accepting Adding Terms/Varying Offer (CL v. UCC Mirror Image Rule) aka BATTLE OF THE FORMS CL differs from UCC 2 ``` CL - acceptance MUST mirror the offer. Known as the Mirror Image Rule. If the offeree adds terms it is a rejection UCC - NO Mirror Image Rule! The offeree adding or changing a term does not prevent acceptance under UCC 2. However... Offeree's term is included ONLY IF: 1- both parties are merchants 2- addition is NOT a material change 3- offeree does not object to the change within a reasonable time EXAM TIP: The offeree's term sometimes does not make it into the contract. EXAM TIP: If the added term is CUSTOMARY in the industry, it's not material

Answer 26

CL - a conditional acceptance is still rejection under CL; mere proposal is not a part of the k UNLESS offeror accepts UCC - court may add gap fillers (terms that do not materially change the original term of offer) but NEVER quantity; when both parties are merchants an acceptance with additional terms does not constitute a rejection and counteroffer, but rather is an effective acceptance UNLESS offer expressly limits acceptance to the terms of the offer, OR the offeror has already objected to the term OR objects in reasonable time.

Answer 27

when one party is a merchant and the other is not and an acceptance proposes additional terms, a contract is formed under the terms of the offer UNLESS BOTH parties are merchants. The additional term are mere proposals to modify the contract. They are not a part of the K unless offeror expressly agrees. ASK - SO THIS MEANS THAT THE TERMS OF THE OFFER REMAIN WITHOUT THE ADDITIONAL TERMS?

Answer 28

Requirements and output contracts do not requires a quantity because (1) requirements - based on buyer's good faith needs (2) requirements k - quantity measured by seller's ability to k

Answer 29

a material change is the type where adding the change would cause unfair surprise or hardship affecting money, risk, or remedy. example: disclaimer of warranties What is NOT a material change: a term that is CUSTOMARY IN THE INDUSTRY or a small change like delivery date

Answer 30

Death of either part BEFORE acceptance terminates a REVOCABLE offer. BUT: death does NOT automatically terminate a CONTRACT (think mortgage with offer, acceptance, and consideration), NOR an IRREVOCABLE offer

Answer 31

Step 3 Acceptance of Formation 1- language of the Offer controls the Manner of Acceptance 2- Starting Performance as Acceptance: Need to Distinguish Between Bilateral v. Unilateral K Offers 3- Improper Performance as Acceptance 4- Offeree's Silence as Acceptance 5- Timing of an Acceptance

Answer 32

When the offeror controls the method of acceptance, most offers can be accepted by return promise to perform but not when offeror controls in a manner of acceptance (example_ acceptance by reporting to work on MondaY)

Answer 33

Bilateral K Starting performance is acceptance and carries with it an implied promise to finish the job; these K's leave open to accept in any reasonable manner Unilateral K Starting performance is NOT acceptance; only COMPLETING PERFORMANCE is acceptance; irrevocable (by offeror) when offeree starts performing, BUT offeree need not finish because completion is acceptance (think Brooklyn Bridge Hypo)

Answer 34

3- Improper Performance as Acceptance CL: Simultaneous acceptance and breach (offeror says to paint house green but you paint the house purple) UCC: accommodation sent with a note are counteroffers NOT acceptance (getting Gaga CD instead of Beyonce as ordered)

Answer 35

4- Offeree's Silence as Acceptance general rule: silence is NOT acceptance exception: CUSTOM creates a duty to speak when merchants have been dealing in a certain was and accepting any change requires speak. (eel skin case)

Answer 36

5- Timing of an Acceptance Gen rule: acceptance is effective when MAILED even if letter is lost in mail (must have stamp and addressed correctly (Mailbox rule) Mailbox rule is effective UNLESS: (1) offer stipulates that acceptance is not effective until received OR (2) and OPTION K is involved (because offeree is already protected by the option to accept within the timeframe) When a revocation is sent first and then an acceptance... whatever letter arrives first dictates Policy: Protects the offeree against revocation once she has mailed an acceptance; Rem: a rejection is upon receipt BUT an acceptance is upon dispatch; if an acceptance is mailed and then offeror revokes by phone that is still a K because offeree accepted when he dispatched the letter.

Answer 37

bargained for legal detriment or benefit. Can be a promise in exchange for a promise (dog), performance or even forbearance. illusory means no considerations on either side. forbearance - if you give up the right to do something you could do legally that is consideration

Answer 38

an act that occurs in the past that is now being recognized with an unenforceable gift promise lacking consideration; you cannot bargain for what has been done in the past Adequacy of Consideration is irrelevant even if nominal (even a mere peppercorn will suffice example - new consideration could be a minor ratifying a voidable K upon reaching the age of majority

Answer 39

courts say irrelevant BUT nominal is a sham and unenforceable (selling 100k home for $1 to son) even a mere peppercorn will suffice for consideration

Answer 40

Common Law: requires NEW consideration because of the preexisting duty is not enough; can modify original consideration even if slightly. EXCEPTION: modification is fair and equitable in light of unanticipated circumstances, Example: Beyonce is pregnant but scheduled for a contract; HOWEVER, a 3rd party who promised to pay may not use the preexisting duty rule as a defense. Example: Kanye says he will pay Beyonce the extra $5K to perform at concert. This is a new K so preexisting rule not a defense for him. UCC - consideration is a mere technicality and not needed to modify a contract for the sale of goods if the modification is done in good faith

Answer 41

- partial pmt of debt due and undisputed no new consideration needed because you owe $3K and agree to pay less; however, if she agrees to pay the debt early or there is a good faith dispute that she owed less could agree to liquidate less.

Answer 42

- exception: time-barred debt A promise to pay a debt collection of which is barred by the SOL is enforceable even without consideration the creditor cannot enforce the original debt because SOL, it can enforce a later written promise to pay even though there's no consideration.

Answer 43

- promissory estoppel as a substitute for consideration Foreseeable reliance may make a promise enforceable even without consideration 1- promise made 2- reasonable foreseeable detrimental reliance 3- justice requires enforcement of the promise ONLY THE RIGHT ANSWER WHEN THERE IS NO CONSIDERAITON

Answer 44

* Lack of capacity (implied affirmation after gaining capacity; exception is necessaries) minors under 18, mentally incompetent, and voluntary intoxication where the party must be so intoxicated that party does not understand the nature or significance of the promise. an incapacitated defendant has the right to disaffirm the contract if she wants to. only a MINOR is able to enforce contract with adult, adult cannot enforce against a minor. minor is able to ratify k upon reaching the age of majority implied affirmation after gaining capacity - minor retains the benefit after gaining capacity exception is necessaries - the incapacitated person is liable for necessaries but only for their reasonable value, not the contract price FL SPECIFIC - minor incapacity removed when: - minor marries although spouse dies or divorce - 16+ may borrow money for their education - eligible minors participate in the Home Farm & Business Loans Act - minor to k for medical services of her child or her pregnancy

Answer 45

Ambiguity/Misunderstanding there is a mutual misunderstanding because there is NO meeting of the minds regarding a material ambiguity *If one party knew of should have known there is ambiguity argue there is a contract based on the innocent party's terms. Subjective intention controls

Answer 46

*Mistake (bilateral or unilateral) bilateral - mutual mistake about the subject matter allows cancellation or modification of the contract but mutual mistake of VALUE is not a mistake of material fact so contract is enforceable unilateral - employs the caveat buyer beware and usually not a defense UNLESS non-mistaken party knew or should have known of the mistake. If so, relief is granted to the non mistaken party to avoid taking advantage of buyer An error in judgment by one of the parties at work the value or quantity of the work done or goods contacted four will not resolve any voidable contract even if the mistaken party knows or has reason to know of the mistake made by the other party

Answer 47

*unconscionability Allows the court to refuse to enforce all or part of a contract by applying TWO test tested at the TIME the agreement is made NOT after: 1- unfair surprise and 2- oppressive terms when HOWEVER, long-term contracts that now looks one-sided is NOT unconscionable

Answer 48

economic duress one party to the contract makes an improper threat and the other party has no reasonable alternative

Answer 49

TIP: Look for an oral agreement to trigger defense The purpose of the SOF is to prevent fraud. While most oral contracts are enforceable, only certain kinds that fall within the SOF need to be in writing to be enforced (MYLEGS). Contracts... M- in consideration of MARRIAGE (but not a promise to marry) example: prenuptial agreements Y- which CANNOT POSSIBLY be completed in ONE YEAR OR LESS from the date of contract formation (look for dates); it does not matter if performance actually takes more than 1 year as long as full performance within 1 year was theoretically possible then no writing is required) Example issues: providing care for life, employment for life okay because person can get better or die before 1 year. L- LAND SALE/TRANSFER of an INTEREST in real property. (like mortgage or lease more than 1 year). To be enforceable, a contract for the sale of land must be in writing signed by the party sought to be charged (D), reasonable describe the land, and the price. If owner authorizes an agent to sell the property, a writing is required under the EQUAL DIGNITY RULE because the underlying contract is a sale of real estate subject to the SOF Therefore, the authorization MUST be as well. E- promises by Executor of an estate to pay the estate's debts from his personal funds G- for the sale of GOODS $500 or more must be in writing, specify the quantity, and signed by the party to be charged (the defendant) S- that give a promise to ANSWER FOR (guarantee) the debt of another BUT not a mere promise to pay (which is not subject to SOF) EXTRA FLORIDA Ks SUBJECT TO SOF - 6 - healthcare guarantees - newspaper subscriptions - debts barred by the SOL - home solicitations - home improvement k - credit agreements

Answer 50

SOF exceptions exist because there is a chance of LESS FRAUD - lease 1yr OR less - part performance of requires ALL THREE: full or partial payment of property, possession, AND improvements - full performance of services (NOT partial performance but when you reach an unfair result argue restitution quasi-contract to fashion a remedy for reasonable value or work rendered not based on the k price but on the fmv of the partial work completed.) - suretyship if the "main purpose" in making promise is benefitting self no writing is required because their is less chance of fraud when a person ensuring the payment is also the one receiving the benefit UCC 2 - goods $500 or more that are accepted or paid for by the buyer (example brady footballs versus boat) - when making custom goods seller must show a SUBSTANTIAL BEGINNING to satisfy the SOF and that the goods are custom-made/not suitable for sale to others - judicial admission - if a D admits under oath that she had a deal then she will lose the SOF defense - Merchants' Confirmatory Memo is used to confirm an oral agreement. One party can use its OWN signed writing to satisfy the SOF AGAINST the other party binding himself and the recipient IF: (1) BOTH parties are merchants (2) writing claims an AGREEMENT and has QUANTITY AND (3) there is no WRITTEN objection within 10 DAYS

Answer 51

A misrepresentation is a false assertion of facts. It is a fraudulent if it is intended to induce a party to enter into a contract and the maker knows or believes the assertion is false or knows that he does not have a basis for what he states or implies with the assertion a fraudulent assertion can be inferred from conduct like concealment or sometimes even non disclosure may be considered a misrepresentation. fraud in the inducement - If a party induces another to enter into a contract by using fraudulent misrepresentation such as asserting information she knows is untrue, the contract is voidable by the innocent party if she justifiably relied on the fraudulent misrepresentation. fraud in the factum - if one of the parties was tricked into giving assent to the agreement under circumstances prevented her from appreciating the significance of her action agreement cannot be enforced it is void SOL begins when person learns of the fraud

Answer 52

An act of concealment intended to prevent another from learning a fact is the equivalent of asserting that the fact does not exist. If a party frustrates an investigation by the other party or falsely denies knowledge of the fact it can be considered a misrepresentation. Nondisclosure without concealment usually is not considered a misrepresentation UNLESS the nondisclosure is either material or fraudulent. Note however that a party has a duty to disclose any facts necessary to correct any prior assertions that he made when necessary to prevent those statements from becoming misrepresentations

Answer 53

Undue influences unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relationship between them is justified in assuming that the person will not act in a manner inconsistent with his welfare. elements Undue susceptibility to pressure by one party and excessive pressure by the other. Consider also: unfairness of the resulting bargain and the availability of independent advice

Answer 54

-words (parol evidence unless typo, establish a defense, interpret a vague or ambiguous term, added to a partially integrated document UNLESS k has a merger clause/4 corners); no later events