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MBE and FL distinctions
Terms in this set (20)
What is a contract?
a legally enforceable agreement
What governs real estate and service contracts?
What governs contracts dealing with sale of goods?
Article 2 of the UCC
What is the test for contracts with both an element of services and goods?
1. All or nothing rule (unless a divisible contract)
2. Predominant purpose rule
Four big parts of whether an enforceable contract has been formed? (All Contracts Don't Stink)
4. Statute of Frauds
What is an offer?
An offer is a manifestation of a willingness to enter into an agreement (by the offeror) that creates a power of acceptance (in the offeree).
What test governs offer and acceptance?
the objective test
Offer - whether an offeror displays an objectively serious intent to be bound
How specific must an offer?
common law - all essentials terms must be covered in the agreement (parties, subject, price, and quantity)
UCC - UCC gap-fills, it only needs quantity (unless it is requirements or outputs contract)
What is a requirements contract?
The buyer is offering to buy 100% of whatever amount is needed from this individual seller
What is an output contract?
The seller is offering to sell 100% of whatever amount is produced to this individual buyer
What is an invitation to deal?
a preliminary communication that reserves a final right of approval with the speaker. It does not convey a power of acceptance to the other side.
Are advertisements offers?
No, usually understood as an invitation to deal.
Exception: reward advertisements and advertisements that are very specific and leave nothing open to negotiation including how acceptance can occur
How can an offer be terminated?
1. The offeror revokes the offer by express communication to the offeree.
2. The offeree learns that the offeror has taken action that is absolutely inconsistent with a continuing ability to contract (constructive revocation)
3. the offeree rejects the offer.
4. The offeree makes a counteroffer.
5. The offeror dies.
6. A reasonable amount of time passes (exception: revival)
What are irrevocable offers?
2. Firm offer
3. unilateral contract - performance has begun
4. Detrimental reliance
What are requirements for firm offer?
Only a merchant (someone who regularly deals in the type of goods at issue) can make a firm offer. A firm offer must be written, signed by the merchant, and contain an explicit promise not to revoke for a time period not to exceed 90 days.
What is a unilateral contract?
Arises from a promise that requests acceptance by action of the promisee
When does detrimental reliance make an offer irrevocable?
When the offeree reasonably and detrimentally relies on the offer in some foreseeable manner
What is acceptance?
a manifestation of a willingness to enter into the agreement by the offeree
What are the rules for acceptance?
1. the offer must be specifically directed to the person trying to accept it.
2. You must know about that offer in order to accept it.
3. You must communicate your acceptance to the other party in order for it to become effective.
4. Mailbox rule (acceptance sent by mail is effective upon dispatch)
5. Acceptance by silence is possible
6. Implied in Facts contracts (acceptance by gesture or action)
What are the exceptions to the mailbox rule?
1. the offeree sends something back first
2. to other types of communications
3. to option contracts
4. unclear if it applies to fax or email
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