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call asks for the modern rule
Opposite of the common law
Moral consideration
valid under the modern trend
Debt barred by SOL or bankruptcy?
Creditor will not be paid unless the debtor agrees to payment in writing---debtor will then be obligated in that amount
Course of prior dealing
can show a valid K existing between the parties
Quasi-K
equitable remedies
unjust enrichment problems are covered here
presume there is not a vlaid K, this is how the P can get something when there are no K damages available
Distributorship Ks
May be oral--not sale of goods so not SoF problems
K which can can cancelled at any time
Illusory promise
If can only be cancelled within a reasonable time frame --say on 30 days notice to the other party--not illusory
if a general contractor relied on the bid of a subcontrctor in submitted her bid...
a valid option K has been created and the subcontractor is bound by the terms of the bid
  • contractors are under no obligation to accept the lowest bid--just offers until accepted
3rd party beneficiaries
  • always be mentioned in the K
  • vesting of rights is necessary
  • rights vest when there is reliance on them
  • or when they are sued under
  • a breach of a K party suspends the K and the 3rd party beneficiary is left in the wind
Assignments and delegations generally
  • all Ks are assignable and delgable
  • EXCEPT unique personal service Ks and  long temr requrement Ks
  • If rights are assigned the assignor has no further rights to those benefits
  • if dutiea re delegated the delegator remains secondarily liable on those duties---surety
Perfect tender rules
  • R: S must tender conforming goods
  • shipping non-conforming goods is both performance and breach of the K
  • UNLESS ther eis a notice of accomodation "sorry we cant ship more than 17" then it becomes a counter offer
  • the B can accept or reject the counter offer but if acceots they cant sue
Battle of the forms
  • C/L--mirror image rule
  • UCC: acceptances can change the offer
  • if the changes are significant enough to change the deal then there is no K and it is a counter offer
  • if they are not significant enough to change the deal but are material ---changes to remedy or breach---the terms are not included in the K
  • If not material the K is dictated under the terms of the acceptance
K modification
  • C/L needs new consideration to bind the modification
  • UCC: no new consideration needed, only modifications in good faith
  • oral modifications are ok, unless they bring the K within the terms of the SoF, then they must be in writing
Detrimental reliance
  • Must be foreseeable and anticipated when the K is formed
Acceptance
  • Manifestation of assent to an offer
Offer
  • Must create a reasonable expectation in the offeree that the offeror is willing to enter into a K on the basis of the offered terms
  • must be a promise, undertaking or commitment to enter into a contract with certain and definite terms
  • Looks at surrounding circumstances to find an offer
Anticipatory repudiation
  • Where a promisor, prior to the time set for perfomrance of her promise, indicates she will not perform when the time comes
  • excuses conditions if:
  • there is an executory  bilateral K with executory duties on both sides
  • the words or condict of the promisor unequivically indicate that she cannot or will not perform when the time comes
  • Nonrepudiating party may treat the K as breached and sue immediately
Adequate assurances
  • Writen demand for adequate assurances of due performance if reasonable grounds for insecurity arise with respect for to the performance of the other party, after which the nonrepudiating party can treat the K as repudiated if those assurances are not given within a reasonable time
Unilateral mistake
  • K will not be avoided by unlaterial mistake unless:
  • the nonmistaken party knew or should have known of the mistake
  • Modification merely to correct an error in the original K does not require consideration
  • if insufficient to excuse performance the promisee will be under a prexisting elgal duty and performance of that duty will be insufficient consideration to support a promise to pay additional sums for the performance
Specific performance
  • Available only where the legal remedy is insufficient
  • not available for a K for services--involuntary servitude and judicial administration problems
  • any rights in this (like for land or real estate) are cut off by lease or sale to a BFPV
Mailbox rule
  • Acceptances are effective upon dispatch
  • all other communications are effective upon receipt
  • Option Ks---effective upon receipt
Detrimental reliance
  • promise will be enforced to the extent necessary to prevent injustice if it was made with a reasonable expectation that it would induce reliance and such reliance was in fact induced
Modification of Ks under the UCC
  • Promise to modify an existing K is enforceable even without consideration
  • MUST be made in good faith
Delivery of nonconforming goods

Buyer may:
  • reject them, cancel the K and sue for damages
  • accept any commercial units, reject the rest and sue for damages
  • Once accepted B is bound on the K and cannot cancel but may sue for damages

Acceptance occurs when
  • the B indicates that he will accept the goods after a reasonable opportunity to nspect them
  • fails to reject within a proper time or
  • does any act inconsistant with sellers ownership
Additional terms UCC
  • if the K is between merchants the additional terms are included in the K unless:
  • the additional terms amterially alter the K
  • the offer expressly limits acceptance to the terms of the offer or
  • the offeror objects within a reasonable time
Armadillos From Texas Play Rap Eating Tcos
  • Applicable law
  • formation of contracts
  • terms of contracts
  • performance
  • remedies for unexcused nonperformance
  • excuses for nonperformance
  • third party problems
Unilateral K
Results from an offer that expressly requires performance as the only possible method of acceptance

Only one person has made a promise

  • reward
  • prize
  • contest
Bilateral K
Everything that isnt a unilateral K--usually silent on method of acceptence


Each person makes a promise
Quasi K equitable remedy
  • P has conferred a benefit on D and
  • P reasonably expected to be paid and
  • D will be unjustly enrished if P is not compensated

Measure of rcovery-- Benefit conferred on D with K price as the cieling if P has defaulted
Applicable law
  • Common law: majority rules (real estate, services K)
  • UCC: sales of goods (tangible personal property)
Mixed deal, services and goods
  • All or nothing rule: the more important deal determiens the law
  • Exception: if the K divides payment, apply UCC to the goods and C/L to the rest
Formation of a K
A K is an agreement that is legally enforceable
Offers
An offer is a manifestation of intent to K, words or conduct showing a commitment
  • would a reasonable person in the O/ees position believe that her assent creates a K?
Content requirements
  • Sale of real estate: price and sufficient description required for an offer
  • Sale of goods: no price requirment but vague or ambiguous material terms do not form an offer --must state quantity
Appropriate, fair, reasonable--vague and ambiguous language
Requirement/output K content
  • A K for the sale of goods can state the quantity of the goods to be delivered under the K in terms of the buyers requirements or the sellers output --all, exclusively, solely
Requirement / output Ks increases
  • Buyer can increase requirments so long as the increase is in line with prior demands
  • No unreasonably disproportionate increases are allowed
Advertisiments
General rule: not an offer
Exceptions:
  • An ad can be an offer if it is the nature of a reward
  • An ad can be an offer if it specifies quantity and expressly indicates who can accept
Termination of offers: 4 methods
An offer cannot be accepted it is dead
  • Lapse of time: an offer will lapse after time stated in the K or aftr a reasonable time ~30 days
  • Death of  a party prior to acceptance: death or incapacity of either party after the offer but before acceptance terminates the offer EX irrevocable offers
  • revocation: words or conduct of the O/or revoking the offer
  • Rejection: words or conduct by the O/ee
Revocation

Only the O/or can revoke an offer
  • Unambiguous statement by the O/or to the o/ee  of an unwillingness or inability to contract: O/ee must know of the revocation
  • Unambiguous conduct by the O/or indicating an unwillingness or inability to contract that the O/ee is aware of---may learn from source other than O/or
Multiple offers to multiple people are not revocations
Irrevokable offers--Option Ks
cannot be revoked
  • Options K: an offer cannot be revoked if the offeror has not only made an offer but also (i) promised not to revoke AND (ii) the promise is supported by payment or other consideration
Irrevokable offers--UCC
Firm offer rule

An offer cannot be revoked for up to 3 months if:
  • offer is to buy or sell goods
  • signed, written promise to keep the offer open AND
  • the O/or is a merchant
NO consideration is required

If no time is fixed by the K it will be set by the ct not to exceed 3 months
Irrevokable offers--detrimental reliance
An offer cannot be revoked if:
  • there has been a reliance that is both
  • reasonably foreseeable and
  • detrimental
Irrevokable offers--strating performance
The start of performance pursuant to an offer to enter into a unilateral K makes that offer irrevocable for a reasonable time to complete performance
  • mere preperation: does not make the offer irrevokable but it can create detrimental reliance
Rejection termination fo the offer
Words or conduct of the offeree to terminate the offer
Indirect rejection:
  • counteroffer
  • conditional acceptance
  • additional terms (NOT UCC)
Indirect rejection--counteroffer
Kill and replace

Counteroffers generally terminate the offer and becomes a new offer.

N/A to option Ks

No express K unless the counteroffer has been accepted

Bargaining---DOES NOT terminate the offer
Indirect rejection: Conditional acceptance
A conditional acceptance temrinates the offer
UCC: conditional terms are never part of the K

Look for a response containing the words: if, only if, provided, so long as, but, on condition that
Indirect rejection: additional terms
C/L only--mirror image rule
  • Under common law a response to an offer that adds new terms is treated like a counter offer rather than ana cceptance
Additional terms under UCC
Stiall an acceptance--seasonable expression of acceptance
  • Under the UCC a response to an offer that adds additional terms (but does not make the new terms a condition of aceptance) is generally treated as an acceptance
  • The additional term is part of the K only if: (i) both parties are MERCHANTS and (ii) additional term is not material and (iii) the additional term is not objected to by the offeror
Methods of acceptance--generally
the offer can control the method of acceptance, the time that a distance acceptance is effective or whether the offeree must give notice that it has accepted by performance
Acceptance by performance
  • Start of performance is acceptance. Starting to perform is treated as an implied promise to perform and so there is a bilateral K
  • EX: start of performance is not acceptance of a unilateral K--completion of performance is required as unilaterla Ks cannot be accepted by promise
If the offer requires performance for acceptance then performance for purposes of the acceptance of that offer means completion of performance
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