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Contracts 1L Mod 5-6
Contracts 1L Mod 5-6 Things to know
| Question | Answer |
|---|---|
| Termination of an offer prior to acceptance | An offer may be terminated at any time prior to acceptance by: rejection, counter-offer, impossibility (death, incapacity, destruction of subject matter, supervening illegality), lapse of time, revocation |
| Rule for calculating days when there is a lapse of time | In measuring days, the day from which the time is reckoned should be excluded. |
| Delays in the delivery of the offer under lapse of time | aware of the delay,offer is as if received on anticipated day; If duration of acceptance is not stated, it is open for a reasonable time; offer may say terminate upon certain event; so long as conversation is going it terminates when finished. |
| Majority view of death or lack capacity of the offeror or offeree | Offer is terminated even if the offeree is unaware of the offeror's death. |
| Minority view of death or lack capacity of the offeror or offeree | Rule is logical if the offeree is aware of the offeror's death, because knowledge of death would be tantamount to a revocation, but if the offeree is not aware, there does not seem a ny good reason to hold that the offer is terminated. |
| Revocation | The offeror's withdrawal of its offer, communicated either directly or indirectly to the offeree, at any time prior to acceptance. |
| Under revocation - A written communication is received | When the writing comes into the possession of the person addressed, or of some person authorized by him to receive it for him; when it is deposited in some place which he has authorized as the place for this or similar communications to be deposited. |
| Rejection | A rejection terminates the offeree's power of acceptance. |
| Counter-offer | Restatement (Second)- This result also carries out the usual understanding that a new proposal supercedes an earlier proposal; counter offer includes a purported acceptance that adds qualifications or requires performances not contained in the offer. |
| Difference between a counter-offer and a rejection | From a counter-inquiry; a comment on the terms; a request for a modification of the offer; an acceptance coupled w/a request for modification of contract; acceptance plus separate offer; a grumbling assent. |
| Supervening death, destruction, or illegality | Terminated by death or destruction, prior to acceptance, of a person or thing essential to performance of the contract.; also terminated by illegality supervening between the making of an offer and its acceptance. |
| Effect of a late acceptance | If an offer lapses before an acceptance becomes effective, the classical view holds that the late acceptance is an offer that in turn can be accepted only by a communicated acceptance. |
| Additional terms become part of the contract unless | The offer expressly limits acceptance to the terms of the offer; they materially alter it; notification of objection to them has already been given or is given within a reasonable time after notice of them is received. |
| Different terms between merchants | Should be treated as additional terms; cancel out & gap fillers of the code should fill the void; never become part of the contract unless the different terms are accepted by the offeror. |
| If the records do not create a contract | A contract can be created by conduct; if the parties behave like a contract has been formed, then a contract exists. |
| Confirmations | Where an agreement has been reached either orally or by informal correspondence between the parties and is followed by 1 or both parties sending formal acknowledgements with the terms both agreed and additional terms not discussed; or they conflict. |
| Rolling contracts | A contract that continues automatically unless someone decides to end it. |
| Documents that DO NOT follow the lead of the UCC | CISG; UNIDROIT; UCITA |
| CISG | A trivial variation in the acceptance from the terms of the offer does not prevent a contract from being formed unless the offeror objects to the variation. |
| UNIDROIT | Distinguish between agreed terms and standard terms. |
| UCITA | Does not validate oral contracts. |
| Parties at a distance | Revocable offer to a bilateral contract may be revoked at any time prior to its acceptance; parties in the presence of one another. |
| Mailbox rule | The offeror's revocation is not effective until it is actually, physically received by the offeree; an acceptance is effectively communicated when it is put out of the possession of the offeree. |
| Parties in presence of one another | When this happens another acceptance is operative only if the offeror hears it or is at fault in not hearing. |
| Mistake in transmission by an intermediary | Telegraph company or publisher is A's agent; results in better business conveinence; 1st party toutilize the telegraph company should bear the risk of loss because the use of the telegraph company makes the 1st party more responsible for the error. |
| Majority view of mistake in transmission by an intermediary | The message as transmitted is operative unless the other party knows or has reason to know of the mistake. |
| Minority view of mistake in transmission by an intermediary | Holds that no contract will arise. |
| What makes an offer irrevocable | By offeror's acceptance of a consideration in exchange for a promise to keep the offer open; under the doctrine of promissory estoppel. |
| Nature of an option contract | Option contract is a hybrid; it is a contract and an offer; once it is determined that an option contract exists, the ordinary rule of offer and acceptance often apply. |
| Termination of irrevocable offers | Lapse of time; death, destruction, legal prohibition; revocation & rejection; Supervening death or incapacity of the offeror |
| Consideration | compensation |
| Elements of consideration | The promisee must suffer legal detriment; The detriment must induce the promise; The promise must induce the detriment |
| Detrimental | Cost |
| What happens with a gratuitous promise | A party gratuitously agrees to raise or lower the contract price to reflect changing market conditions. |
| Donative promise | A promise to make a gift. |
| Doctrine of consideration writs | covenant; debt; assumpsit |
| A covenant was used to | A covenant was used to enforce promises made under seal. |
| Debt was used to | Debt was used to sue for a definite sum owing as a result of performance by the promisee. |
| Assumpsit grew out of cases where | Assumpsit grew out of cases where a promisor had undertaken to do something and had done it carelessly (misfeance) to the detriment of the promisee. |
| What does the notion of the writ of debt require | There must be a benefit to the promisor. |
| What does the notion of the writ of assumpsit require | That there must be detriment on the part of the promisee. |
| Elements needed before a promise is supported by consideration | Promisee must suffer legal detriment; detriment must induce the promise; promise must induce the detriment. |
| The promisee must suffer legal detriment means | That is do or promise to do what the promisee was not legally obligated to do; or refrain or promise to regrain from doing what the promisee is legally privileged to do. |
| The detriment must induce the promise means | The promisor must have made the promise because the promisor wishes to exchange it, at least in part, for the detriment to be incurred by the promisee. |
| The promise must induce the detriment means | The promisee must know of the offered promise and manifest an intent to accept. |
| The promisee incurs legal detriment what happens | The promisor obtains a legal benefit |
| The promise must induce the promisee to exchange the promisee's conduct for the promise which means | The offeree must know of the offer and manifest an intent to accept; the offeree must actually or apparently be induced to act by the promise. |
| Bargained-for exchange | In plain English, if the unread but agreed-to terms objectively contain the appearance of "a bargained-for exchange," consideration is present. |
| Past consideration | Consideration is essentially an exchange and parties cannot bargain for or exchange something that has already occurred. |
| What is the one kind of contract where the courts will review the balance between the value of consideration and the price charged for it. | Lawyer-client retainer |
| Conditions to gift distinguished | Adequacy of detriment is relevant in determining whether the promisor manifests a gift-making state of mind; smallness of the detriment; the happening of the contingency would be a benefit to the promisor. |
| An offer is binding as an option contract | If it is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes and exchange on fair terms within a reasonable time. |
| With respect to a guaranty it reads... | A promise to be a surety for the performance of a contractual obligation made to the obligee is binding if the promise is in writing and signed by the promisor and recites a purported consideration. |
| Modern view of surrender of an invalid claim as detriment | The surrender of an invalid claim serves as consideration if the claimant has asserted it in good faith and a reasonable person could believe that the claim is well founded. |
| Pre-existing duty rule | When a person performs or promises to perform a legal obligation, or promises to refrain from doing or refrains from doing what the person is not legally privileged to do, the person has not incurred detriment. |
| Duties imposed by law | Applies not only to a modification of an existing contract but to a duty imposed by law. If the promise was supported by consideration, it should be enforceable; the parties should have rights both under the statute and under the contract. |
| Contract Duties | There is the initial agreement of recission by which each party gave up something, and finally the subsequent employment agreement. |
| Contract duties exception | Exception recognized by some jurisdictions is that a modification will be upheld even if it is without consideration if the modification is made after unforeseen difficulties have arisen in the performance of the prior agreement. |
| Cardinal change doctrine | Where major changes are demanded and performed; for these cardinal changes a contractor is entitled to the contract price plus compensation for the reasonable value of the changes. |
| Best theory adopted to defeat the pre-existing duty rule | Based on the idea that a person incurs legal detriment in giving up the legal right to breach the contract. |
| Classical view of three-party cases | If a person is merely promising to perform a contractual obligation, the agreement is void. Result is different if the third party bargains for it causes the original contracting parties to refrain from rescinding their previous agreement. |
| Part payment cannot satisfy a debt | Part payment by a debtor of an amount here and now undisputedly due is not consideration to support a promise by the creditor to discharge the entire amount due. |
| 3 parts when there is a question of accord and satisfaction | Have the parties gone through a process of offer & acceptance (accord); has the accord been carried out (satisfaction); whether the offer & acceptance is supported by consideration. |
| IF the offer & acceptance is supported by consideration. | If yes, there is a binding accord & satisfaction; if no, there is no accord & satisfaction. |
| Intent of the creditor under the holdings that an accord and satisfaction is formed | The creditor must either refuse the check, even though it is in an amount conceededly due, or cash it & forgo the balance of the claim. |
| Payment in full on a check that isn't the full amount...Creditors try to avoid this result by | Striking out the words "payment in full" or by notifying the debtor that the check will be accepted in part payment. |
| If the check is inadvertently cashed the UCC provides | Article 3 of the UCC provides detailed rules by which creditors can guard against full payment checks by preemptive notice & by tendering the return of the funds represented by the checks. |
| Discuss the STATUTES OF FRAUDS. | The requirement that certain kinds of contract be memorialized in a signed writing with sufficient content to evidence the contract. (i.e. Marriage prenuptial agr., Wills) |
| Define MIRROR IMAGE RULE. | The rule states that an offer must be accepted exactly as written/stated without modifications. |
| Name the 3 ELEMENTS OF COMMON LAW ACCEPTANCE. | Has to be a committment; has to be communicated the "rigth way"; and, effective upon dispatch. |
| Name the 4 EXCEPTIONS TO THE MAIBOX RULE. | Can't use MAILBOX RULE: If the offer says you can't; Can't use is OPTION CONTRACTS to stradle the end of the option; if the rejection is received first by the OFFEROR and acted upon; and, based on what is read first-the rejection or acceptance. |
| Define SHRINKWRAP. | Where shrinkwrap packaging indicates "if you unwrap the product you consent to the terms herein." (i.e. software disks) |
| Define a ROLLING CONTRACT. | Where payment before the revelation of the full terms. (i,e. Insurance policies or airline tickets). |
| Define BROWSEWRAP. | Situations where the computer user is merely told that the terms and conditions that apply are available elsewhere other than on the page currently being examined. |
| Ehat 3 things must the OFFEREE do in order to accept an offer? | Must know of the offer; Must exchange a requested performance or promise for the OFFEROR'S promise; and Must manifest and intent to accept the offer. |
| Discuss the PAROL EVIDENCE RULE. | Prevents a party to a contract fro introducing any oral or written amendments or terms that contradicts the final written agreement. |
| List the 3 elements of the CONSIDERATION DOCTRINE. | The promisee must suffer legal detriment; The detriment must induce the promise; and, The promise must induce the detriment. |
| Define LEGAL DETRIMENT. | An assumption of duties or liabilities not already imposed on the person. |
| Define the PEPPERCORN THEORY. | The theory that the smallest detriment can serve as onsideration-may have very little economic value but will have significant legal value. |
Created by:
Rochelle28nm
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