Contract

Describe an offer

M + W = J O A = C

Contract

What would be a valid offer

Expression of committment

+  Definite in its terms

+ Communicated to offeree

(Created power if acceptance)

Contract

Offer in paper (Adverts) maybe no

Sub contractors to Contractor - If relied

CONTRACT

Describe when an offer which is based upon mistaken calculations or an error in transmission is capable of acceptance.

When an offer that is made on mistaken calculations or an error is so obvious that the offeree should have realized the mistake had been made, and are not capable of acceptance.

1.  Look at closest amount (To next offer)

2.  The offerors prior experience (Previous dealings- Should show mistake in low offer)

Contract

Describe a firm offer

How long can it be held open

UCC section 2 what/.......

A firm offer is a offer that can only be made by a merchant, and which pertains to the sale of goods, is made in writing by the merchant and ensures the offeree that it will be held open.

A firm offer is held open for the time stated, or a reasonable time, but no more than three months

UCC Section 2-205

Contract

Describe a firm offer

A firm offer is a offer (signed writing) that can only be made by a merchant, and which pertains to the sale of goods, is made in writing by the merchant and ensures the offeree that it will be held open.

A firm offer is nonn revocable for the time stated, or a reasonable time, but no more than three months

UCC Section 2-205

Contract 

Describe the requirement that the offer be sufficiently definite as to its material terms

a)  Common law

b) UCC

At common law contract has to be suffiently definite as to its material terms in order to be capable of acceptance. At common law, the offer must articluate the material terms of the bargain or else the offeree would have no idea what to accept.

Under UCC art 2 - 204(3) terms can be supplied

Price, place of delivery and time of performance can all be implied into agreement (UCC - 2 - 305/308/309)

Contract

Describe an offer for a unilateral contract

A unilateral contract is a contract that can only be accepted by completion (Carrying out a specific act) or (Refraining from a specific act)

Contract

If it is unclear whether a offer is a unilateral or bilateral contract acceptance may be made by either a promise OR performance

COntract

Unilateral or bilateral - Why is it important

Whether a offer and acceptance constitutes a uniliateral or bilateral contract may be the difference between whether a offeree who wishes to escape a contract can do so - If it is determined that a contract is a unilateral contract, and there has been no substantial beginning towards performance (Contract second restatement), then a offeree could revoke.

Contract

Describe the obligations of an offeree under an offer for a unilateral contract

An offeree under a unilateral contract ordinarily has no obligations to the offeror until his performance is completed.

Some jurisdictions, where offeror is aware that offeree under a unilteral contract has begin performance, and (2) relied on teh completion of such undertaking, the offerees conduct may be construed as an implued promise to complete performance

Contract

Describe an acceptance

An acceptance     is a expression     of a present     unequivocal      unconditional       assent by the

offeree        to each and every term of the offer.

Unless the offeror specifies a particular mode of acceptance, it can be made in any reasonable manner

Contract

Describe the mirror image rule at common law

What about UCC

The mirror image rule exists at common law, and requires that a contract at common law have the offer in its eact form accepted by the offeree.  If the purported acceptance varies from the offer in any way, it will be construed both as a rejection of the original offer, and being a fresh (Counter offer)

Under UCC terms can be impied, so mirror image rule not applicable - UCC - 2 -207

Contract

Describe the UCC (Sale of goods) rule pertaining to additional terms contained in an acceptance or confirmation.

Under the UCC, additional terms contained in an acceptance or confirmation between merchants can become part of the contract UNLESS:

a)  the expression of acceptance was made conditional on assent to the additional terms

b)  The offer explicitly limited acceptance to its terms

c)  The additional terms materially alter the contract

c)  Notice if objection to the additional terms is not given within a reasonable time.

Contract

Describe the 'lapse; rule pertaining to termination of an offer

An offer lapses when:

1.  automatically after the time stated on the contract for acceptance.

2.  Where no time is stated, a reasonable time (Reasonable time 3 months)

Contract

When does offer made face to face or over the telephone expire

Contract

What is the effect of a rejection or counter- offere by the offeree

Contract

What happens when offer and rejection sent to offeror - 

Control

Describe how a offer is terminated by revocation

A contract is terminated by revocation when the offeree receives notice that the offer has been withdrawn before she accepts the offer (or)

hears from a relyable source that the offeror is not intending to sell to your employer.

Note;  Offer NOT withdrawn just because offeror made similar offer to others

what are the two types of contract law (Majority)

PLUS Third type NY Only

Common law

UCC Article 2

NY Only - UCC Article 2A (UCC For lease of goods )

1.  What does UCC Art 2 apply to

2.  What does common law apply to

UCC Art 2 - Applies to the sale of goods - (Movable personal property)

Common law - Real property, services and loans (Not covered by UCC)

A contract that can only be ACCEPTED by the completion of the task (Total delivery) (Can be accepted only by performance)

1.  Define offer

(PUC)

2.  What CANT a offer be

Manifestation of intention to be bound, created by words or conduct.

Communication of an offer must be a promise, undertaking of committment 

Cannot be mere invitation to negotiate

An offer MUST be open in order to be accepted - So look at whether the offer has been revocated.

Explain

An offeror may revoke an offer directly or indirectly

a)  Direct revocation - Offeror unambiguously indicates directly to offeree that he has changed his mind

b) Indirect revocation - offeror engages in conduct that unambiguously indicates he changed his mind AND the offeree is aware of the conduct.

If offeree becomes aware of offereor conduct that offer is revoked, then offeree knows of an indirect recovation (Offeree finds offeror sold item)

When is revocation effective

What about MAIL

REvocation effective on receipt

Mail rule does NOT apply to revocation - Effectice only when received.

When can a offeror NOT revoke

(3)

1.  Option - WITH CONSIDERATION

2.  Reasonable reliance (Contractor)

3. In a Unilateral contract beginning of performance (Getting ready to begin not sufficient)

NOTE NY - Can revoke up to performance complete

What is the mirror image rule

How does it differ under UCC.

Under the mirror image rule (Common law) acceptance on all terms

Under UCC - additional terms do not prevent acceptance because policy of trying to facilitate contract

1.  Between merchants

2. Term is not a material change

Offeror does not object within a reasonable time

Note:  Not if offeror said accept as per exact terms (or)

Offeree says will accept ONLY of accept these additional terms.

If Bilateral - Acceptance

If Unilateral no effect

(However note that some jurisdictions would view that offeree bound to complete if started and offeror relied )

What is the significance of improper performance

(Color)

1.  Explain mailbox rule

What area of law does it apply to

2.  By contrast explain revocation

3.  What exceptions can there be to mailbox rule.

1.  Mailbox rule - Accepting an offer by mail, constitutes an acceptance the moment the offer is posted

This rule applied only to law of contracts

2.  Revocation - Only effective when RECEIVED by offeree and only effective if received by offeree BEFORE offeree accepts offer. 

3.  Mailbox rule does not apply when offeror says offer has to be accepted by a specific date, OR where there is a option that expires on a specific date - Mailbox does not apply

Agreement:  REVIEW

1.  Was there an   .....(Add, req, open price t ...)

2.  Was offer ..T....................... (If so .....x)

(1)  Did the offer L...........

(2)  Did O .......   R ............

(Was there O, F R, or a F O under Art 2, or did offeree start performance in a U C  (Not NY)

3.  Was offer Rej  ( By I R)

Did offeror DIE - If so effect (Revocable/irrevocable)

Was offer A - If yes - AGREE

Q - Is it U or B

Consider method of A - Mailbox

Was there an offer - Look out for ad, a requirement contract and a open price term

Was teh offer terminated - If so its dead

(1) Lapse:  occurs after stated time or reasonable time has passed

(2) Revocation by offeror - Generally offeror can reject unless you have an option, forseeable reliance, or firm offer under Art 2, or offeree starts performance in a unilateral contract on MBE

(3) rejection by offeree - Inappropriate response

(4) Death before acceptance - That will terminate revocable offer but not an irrevocable one

c)  Was the offer accepted - IF so you have an agreement

i) unilateral or Bilateral :  In a uniliateral, acceptance only by performance, in a bilateral contract any reasonable way

2) Mailbox rule - Acceptance effective when mailed in order to protect offeree

1. Under 18

2. Intoxicated

3. Mentally incompetent

Remember - In question you must think DEFENDANT and PLAINTIF (Not offeror/offeree)

So competancy is a issue for the DEFENDANT to raise as a defense

Question:  Explain how a contract can be affirmed

(Three points)

Answer

1.  Retains the benefit (and)

2. Without complaint

3. After gaining (or regaining) capacity

DURESS (Economic duress big topic)

What can you NOT do to enter into a contract

1.  Threaten physical harm

2.  Threat to break EXISTING contract unless..

(If other party agrees because needs first contract and no reasonable alternatives )

What is affect of ambiguity of term

(Peerless)

If neither party aware of ambiguity - No contract

If ONE party aware of ambiguity - Contract will be on innocent parties terms.

What is effect of mistake

What about crutial aspect (Artist)

What about unilateral mistake

Mutual mistake - No contract (House burnt down)

If crutial aspect - and not - Not enforceable

if unilateral, parties bound UNLESS other party knew he was making mistake

1.  Define consideration

B F L D/B that can take the form of a P, P or F.

2.  What about past consideration.

3.  What about NY

Bargained for legal detriment or benefit that can take the form of a promise, performance or forbearance.

Past consideration is NO consideration

In NY past consideration is good consideration if excpressly stated in a signed writing and it can be proven

1.  What is the PED rule

2.  What effects at common law

3.  What effects under UCC

Pre existing duty rule 

The pre existing duty rule is that where a contract is already formed (And both parties have obligations to perform) without further consideration the contract cannot be modofied to add additional terms.

1.  At common law there MUST be consideration to modify a contract

UNLESS :  NY - If agreement without consideration but in writing can be enforced.

Third party cannot raise PEDR as a defense  (So cant rely on not paying - autograph- if added autograph to existing contract to sing between OTHER parties)

2.  At UCC -  No considration required BUT modification has to be in good faith (Say price increase in supply etc)

Part payment effects - Explain and NY

(Credit cards)

What if in dispute

If agree to pay less WITHOUT consideration, even if company agree - NO - Can still sue for balance

If the amount is in dispute then YES, as law favours settlement of disputed claims

NY - No consideration if promise to forgive balance of debt is in a signed writing

1.  Illegal subject matter

2.  Public policy - (Look for covenant not to compete or exculpotary clause)

Note:  Court will invalidate or narrow a covenant not to compete that operates as a restraint of trade

3.  Exculpotary clause - Can elimiate liability for negligence but not GROSS negligence nor intentional torts

DEFENCES - REVIEW

a. I

b. D

c. M

d. A

e. M

f. L

g. I

h. P

i. U

a,  Incapacity of defendant - look for implied affirmation

b, Duress - look for economic compulsion

c, Misrepresentaion/ non disclosure - Even if honest

d, Ambiguity of term - Innocent party rules

e, Mistake about a material fact - Value mistake not material

f, Lack of consideration - Must have a bargain (Consider PEDR)

g, Illegality - Look at subject matter of contract

h, Public policy - look for non compete or exculpotary clause

i, unconcionability - does it shock the consciousness of the court.