Term
|
Definition
|
|
Term
|
Definition
| OFFER ACCEPTANCE CONSIDERATION DEFENESES |
|
|
Term
| FORMATION PREFATORY PARAGRAPH |
|
Definition
| In order to establish a valid contract, the following elements are necessary: First to determine the applicable law, and then whether there was 1) a valid offer, 2) acceptance, 3) valuable consideration, and 4) absence of any defenses. |
|
|
Term
|
Definition
| Common law applies where the subject mater is services. |
|
|
Term
|
Definition
| The UCC applies where the subject matter is goods. |
|
|
Term
|
Definition
| goods are moveable tangible objects |
|
|
Term
|
Definition
| A merchant is one whom by their occupation deals in such goods, or by their profession has a special skill or knowledge of such goods. |
|
|
Term
|
Definition
|
|
Term
|
Definition
| IN ORDER TO ESTABLISH A VALID OFER THERE MUST BE THE MANIFESTATION OF PRESENT CONTRACTUAL INTENT, DEFINITE AND CERTAIN TERMS, AND COMMUNICATION TO THE OFFEREE. TO PROVE THE REQUISITE INTENT, THE FOLLOWING FACTORS MAY BE CONSIDERED: WHETHER THERE ARE FACTS OF PRELIMINARY NEGOTIATIONS OR INVITATION TO CONTRACT - OR WHETHER THERE ARE FACTS DEMONSTRATING A PRECATORY EXPRESSION AND SHOWING A DESIRE, REQUEST, OR WISH TO MAKE AN OFFER. |
|
|
Term
|
Definition
| MANIFESTATION OF PRESENT CONTRACTUAL INTENT, CONTAINING DEFINITE AND CERTAIN TERMS, COMMUNICATED TO AN IDENTIFIED OFFER CL: TIME PARTIES SUBJECT MATTER PRICE UCC: QUANTITY |
|
|
Term
|
Definition
| Ads, brochures, and the like are generally regarded as invitations to receive offers. |
|
|
Term
|
Definition
| To prove the requisite intent, the following factors may be considered: whether there are facts of preliminary negotiation or invitation to contract, or whether there are facts demonstrating a precatory expression and showing a desire, request or wish to make an offer. |
|
|
Term
|
Definition
| The quantity term is the buyer's requirements or needs of some goods. |
|
|
Term
|
Definition
| Quantity term is the seller's output of some good. |
|
|
Term
| TERMS - DEFINITENESS AND CERTAINTY |
|
Definition
| Although under common law an offer must contain parties, subject matter, quantity, time, and price, under the UCC only the quantity term is essential. |
|
|
Term
| TERMS - MIRROR IMAGE RULE |
|
Definition
| ACCEPTANCE MUST MIRROR THE OFFEROR'S TERMS, OTHERWISE IT IS A COUNTER OFFER |
|
|
Term
|
Definition
| UCC 2-207 allows an acceptance containing varying terms to be effective. However, the varying terms will not be included in the contract if: They expressly limit acceptance and the offeror does not agree to the new terms; The parties are not both merchants, Merchants, 3. The new terms materially altered the terms of the contract, or if there is no alteration, 4. The offeror expressly and timely objects to the new terms. |
|
|
Term
|
Definition
| AN OFFER IS COMMUNICATED WHEN THERE IS KNOWLEDGE ON PART OF THE OFFEREE |
|
|
Term
|
Definition
| Under UCC 2-2-6, an acceptance, not otherwise conditioned, may be made in a reasonable manor including the shipment or promise to ship either conforming or nonconforming goods. But a shipment of non-conforming goods as an express accommodation is not an acceptance. |
|
|
Term
|
Definition
ACCEPTANCE IS EFFECTIVE UPON DISPATCH
ACCEPTANCE SENT FIRST THEN REJECTION = K
REJECTION SENT FIRST THEN ACCEPTANCE - WHAT EVER ARRIVES FIRST |
|
|
Term
|
Definition
OPTION CONTRACT
WHERE OFFEREE HAS DETRIMENTALLY RELIED
OPTION WITH RESERVE
UCC FIRM OFFER BY MERCHANT
UNILATERAL CONTRACT AFTER PART PERFORMANCE
PLAIN OFFER |
|
|
Term
|
Definition
| Involves a promise to keep the offer open AND the promise is supported by consideration. |
|
|
Term
| TYPE OF K - DETRIMENTAL RELIANCE |
|
Definition
| An offer cannot be revoked if there had been detrimental reliance by the offeree that is reasonably foreseeable |
|
|
Term
| TYPE OF K - OPTION WITH RESERVE |
|
Definition
|
|
Term
| TYPE OF K - UCC FIRM OFFER RULE |
|
Definition
| Signed written promise to keep the offer open by merchant is irrevocable w/o consideration for a reasonable time, not to exceed 90 days. |
|
|
Term
|
Definition
| A signed written offer by a merchant which promises that it will be held open for a time stated without consideration will be held open (or if time is stated then for a reasonable time) taken that the offer does not stay open for more than 90 days. |
|
|
Term
| TYPE OF K - UNILATERAL K AFTER PART PERFORMANCE |
|
Definition
| Offeree gas already started performance. Mere preparation is not enough. |
|
|
Term
|
Definition
EXPRESS TERMS
OPERATION OF LAW
LAPSE OF TIME
DEATH OR DESTRUCTION OF SM
DEATH OR INSANITY OF OFFERER OR OFFERE
SUPERVENING ILLEGALITY
ACTS OF THE PARTIES
REVOCATION OF OFFERER
REJECTION BY OFFEREE |
|
|
Term
|
Definition
| AN OFFER CAN BE EXPRESSLY TERMINATED |
|
|
Term
| OFFER TERMINATION - ACTS OF PARTIES |
|
Definition
| An offer can be revoked by the offeror or rejected by the offeree. |
|
|
Term
| TERMINATION - OPERATION OF LAW |
|
Definition
| An offer can be terminated by death of the offeror or offeree, destruction of the subject matter, or lapse of time. If no date is specified an offer is left open for a reasonable time, usually 30 days. A supervening illegality. |
|
|
Term
|
Definition
| A STATEMENT THAT AN OFFER MAY NO LONGER BE ACCEPTED |
|
|
Term
|
Definition
|
|
Term
| ACCEPTANCE - CAPACITY TO ACCEPT |
|
Definition
| ?? Must have the capacity to accept. |
|
|
Term
| ACCEPTANCE - COMMUNICATED |
|
Definition
| The acceptance can be communicated in any reasonable channel and by any reasonable means. |
|
|
Term
| ACCEPTANCE - SHORT VERSION |
|
Definition
| THE UNEQUIVOCAL ASSENT TO THE TERMS OF A VALID OFFER CONSTITUTES ACCEPTANCE. ALTHOUGH AT CL THE ADDITION OF ANY TERM BY THE OFFEREE CAUSED A CONTEROFFER AND REJECTION OF THE OFFER, UCC 2-207 ESTABLISHES THE ADDITIONAL TERMS MUST MATERIALLY ALTER THE OFFEROR'S TERMS. |
|
|
Term
|
Definition
Acceptance is the unequivocal assent to the terms of the offer. Under common law, any deviation from the offer will result in a termination. However, under UCC section 2-207, acceptance would occur even if there are additional or different terms. An Acceptance which is a seasonable expression of acceptance can contain varying terms from the offer provided the acceptance is between merchants and: 1) The offer doesn’t expressly limit itself to its terms, 2) the offeror doesn’t object to the new terms, 3) the acceptance isn’t conditioned upon accepting the new terms and ,4) the new terms don’t materially affect the offer. |
|
|
Term
|
Definition
|
|
Term
|
Definition
| Consideration is a legally sufficient bargained-for-exchange, that induces current performance, is a detriment to the promise, and a binding obligation on both parties. Consideration is a legally sufficient bargained-for-exchange. |
|
|
Term
|
Definition
| LEGALLY SUFFICIENT BARGAINED-FOR EXCHANGE |
|
|
Term
|
Definition
| Under the UCC, a modification requires mutual assent; no new consideration is required, but the parties must act in good faith. (2006 june fylsx Q2 Ans A) |
|
|
Term
|
Definition
| A preexisting duty is a duty for which one is already legally required to do. Under common law, any modification requires consideration. If no consideration is found, the court would likely find that such modification was not bargained for. However, the UCC allows modification without consideration, as long as the modification was made in good faith. (2003 June fylsx Q1A) |
|
|
Term
|
Definition
| An illusory promise only has the appearance of binding a party. However, under the UCC, the duty of good faith will satisfy the consideration element. In addition, under the UCC the parties have an implied promise of good faith and fair dealing. (2006 june fylsx Q2 Ans A) |
|
|
Term
| DEFENSES TO FORMATION TOPICS |
|
Definition
|
|
Term
|
Definition
| When a party to a contract makes a mistake, and it is a unilateral mistake, which will not prevent enforcement of the contract unless the other party knew or had reason to know of the mistake. |
|
|
Term
|
Definition
| Under the SOF, certain contracts must be evidenced in writing to be enforceable. Where one merchant sends another merchant a memo confirming an agreement that the other merchant has a reason to know of and understand, the memo suffices as a writing under the SOF. |
|
|
Term
|
Definition
| Under parole evidence, oral or written evidence of prior or contemporaneous terms are not admissible if the writing was fully integrated. |
|
|
Term
|
Definition
Novation requires an agreement by both parties to original K. Substitute third party or K. Promisee can only sue third party,
|
|
|
Term
|
Definition
|
|
Term
|
Definition
| Once all conditions are either satisfied or excused, both parties will be under an absolute duty to perform, they must perform, discharge their duty, or be in breach. |
|
|
Term
|
Definition
| A condition is an event that determines if an when a duty arises or is extinguished. Time is not a condition. |
|
|
Term
|
Definition
| The condition has to occur before the duty arises. |
|
|
Term
|
Definition
| Both parties have a condition precedent to each other. |
|
|
Term
|
Definition
| There is already a duty to perform, but the condition occurs extinguishing the duty. |
|
|
Term
|
Definition
EXPRESS - expressed by the parties
IMPLED - implied by the facts
CONSTRUCTIVE - implied by law. |
|
|
Term
| CONDITIONS - PARTY'S SATISFACTION |
|
Definition
Satisfaction based on personal taste or judgement
subjective
need not be reasonable
good faith |
|
|
Term
|
Definition
Full performance
Substantial performance
Doctrine of divisibility |
|
|
Term
|
Definition
| When a contracting party indicates they will not perform as promised when the time of performance is due under the contract, the other party can declare an immediate breach of contract, suspend performance, and immediately seek damages. |
|
|
Term
|
Definition
| Under the Perfect Tender Rule of the UCC, where the buyer receives defective merchandise, the Buyer can exercise three options: 1. Accept the Whole 2. Reject the Whole 3. Keep any Commercial Unit or Units and reject the rest. |
|
|
Term
|
Definition
|
|
Term
|
Definition
|
|
Term
|
Definition
| An assignment is the right to receive. A party in a contract may assign their rights to another to receive as long as the contract does not state otherwise. Even if the contract does state otherwise the party has the power to assign the right to receive. Under UCC, a valid assignment automatically carries with it the delegation of duties under the contract. A delegation is the right to perform under the contract. (2007 oct fylsx Q3 ans A) |
|
|
Term
|
Definition
F.O.B. - “FREE ON BOARD.” The seller is
required, at the seller’s risk and expense, to
transport the goods to the destination following
the F.O.B. designation (UCC 2-319) |
|
|
Term
|
Definition
F.A.S. - “FREE ALONGSIDE.” The seller is
required, at the seller’s risk and expense, to
transport the goods to the vessel or dock at the
named port following the F.A.S. designation
(UCC 2-319) |
|
|
Term
|
Definition
C.I.F. - “COST OF THE GOODS, INSURANCE,
AND FREIGHT.” The seller is required, at the
seller’s risk and expense, to transport the goods to
the destination following the C.I.F. designation
and to insure the goods. |
|
|
Term
| THIRD-PARTY BENEFICIARIES |
|
Definition
| Third-party beneficiaries may recover for breach of contract if they are intended beneficiaries. Intended beneficiaries are those whom the promise intends to benefit. They are usually named in the contract, performance is to run directly to them, and have a relationship with the promise. All other beneficiaries are incidental beneficiaries. |
|
|
Term
|
Definition
| Under UCC 2-201, a contract for the sale of goods worth $500 or more must be in writing, signed by the parties against whom the contract is to be enforced. But between merchants, a sales confirmation by one listing quantity will bind both parties if the receiving party does not object within 10 days. |
|
|
Term
|
Definition
Acceptance is the unequivocal assent to the terms of the offer. At common law, the acceptance had to be the mirror image of the offer. Under UCC 2-201, additional or different terms may be included unless the offeror expressly limits the contract to the terms
in the offer, the offeree objects within 10 days, or the acceptance alters a material term. |
|
|
Term
|
Definition
An offer is freely revocable at any time prior to acceptance. Revocation is effective upon
receipt. |
|
|
Term
|
Definition
Where the promisee reasonably, foreseeably and substantially relies to her detriment on
the promissor’s offer, the promise will be enforceable to the extent necessary to avoid
injustice. |
|
|
Term
|
Definition
Mistake
When a party to a contract makes a mistake, it is a unilateral mistake, which will not prevent enforcement of the contract unless the other party knew or had reason to know of
the mistake. |
|
|
Term
|
Definition
Modification
Under the UCC, a modification requires mutual assent; no new consideration is required,
but the parties must act in good faith. |
|
|
Term
|
Definition
Breach of Contract
A breach of contract occurs when one party to the contract indicates that they will not perform according to the terms of the contract, i.e., their agreed performance. A breach can be minor or major (material). Upon breach, the non-breaching party can suspend (minor) or cancel their own performance (major) and sue for damages. |
|
|
Term
|
Definition
IMPLIED TERMS
Usually courts will look to course of dealing, course of performance, or usage of trade to imply a term under a sales contract. |
|
|
Term
|
Definition
Assignment of Contract
An assignment is the right to receive. A party in a contract may assign their rights to another to receive as long as the contract does not state otherwise. Even if the contract does state otherwise the party has the power to assign the right to receive.
Under UCC, a valid assignment automatically carries with it the delegation of duties under the contract. A delegation is the right to perform under the contract. |
|
|
Term
|
Definition
Demand of Assurance
Under UCC, if a merchant has reason to believe that the contracting party will not perform under the contract, then he may demand assurance of their performance. If the other party does not respond back within 30 days, then the party can presume by their conduct that they do not intend to perform, creating an immediate action for breach of contract. |
|
|
Term
|
Definition
Indirect Revocation
Knowledge received by an offeree from a reliable source that the offeror does not intend to enter into the contract is an indirect revocation and ends the power of acceptance by the offeree. |
|
|
Term
|
Definition
| Novation: A novation is an agreement among all of the parties to an agreement that an assignment and/or delegation of rights/duties is acceptable. |
|
|
Term
|
Definition
| A third-party beneficiary is one who receives rights or a benefit through a contract between two or more other parties who, while forming the contract, intended to benefit the 3rd party. |
|
|
Term
|
Definition
| Privity: Normally, only those in privity have rights within a contract. |
|
|
Term
|
Definition
| Vesting: In order for a 3rd Party to be able to enforce any potential rights under a contract for which they became the 3rd P Beneficiary, they must first be vested. Typically, for creditor beneficiaries vesting occurs on notice (some jurisdictions notice and assent). |
|
|
Term
|
Definition
Delegation
A delegation of duties is possible where it’s not prohibited by contract nor it is too personal. |
|
|
Term
|
Definition
Implied warranty of merchantability is when the seller represents that the goods
are of fair and average quality for normal use.
Implied warranty of fitness is when the seller knows of the buyer’s intended use
and the buyer justifiably relies on the seller’s knowledge and skills. |
|
|
