Term
| The Objective Standard for Determining Assent |
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Definition
| Legal assent to a contract is determined not by trying to ascertain if the parties subjectively believed that they had an agreement, but by having regard to their apparent intent as shown by their overt acts and words. |
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Term
| The Determination of Objective Meaning- The Reasonable Person Construct |
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Definition
The purely subjective understanding of one party is no more relevant the subjective intent of the person who made the promise. Rather, courts look at what a reasonable person would have understood from the words and actions of the other party.
“Reasonableness” must be contextual. It is not an abstract concept. It takes into account a person’s attributes, background, and the relationship between the parties |
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Term
| The Limits of the Objective Test |
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Definition
Test is not absolute; it is tempered by the recognition that there are some situation in which the rigorous application of an objective standard would be unjust and a party’s subjective state of mind is highly relevant
Such as mental disease, extreme intoxication, or in situations of fraud or duress |
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Term
| The Definition of “Offer” |
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Definition
Restatement, Second §24. Offer Defined
i. An offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain invited and will conclude it.
b. Final decision to contract must rest with the offeree, or else there was no offer. |
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Term
| When are you bound in a contract? |
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Definition
Rule: If a reasonable man would believe he was assenting (agreeing), he is bound even if he did not intent to be bound, undisclosed intentions of one party are immaterial
A person cannot say they were kidding or not serious when his conduct would warrant a reasonable person to believe that he intended a real agreement.
Restatement §20 (2)(a), Restatement §201
Case Example: a. Lucy v. Zehmer- a contract is enforced if one party agrees but later claims he didn’t intend to agree. Guys at bar, Zehmer agrees to sell Lucy his farm and he signs in agreement, but later says it was a joke. |
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Term
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Definition
1. Advertisements…are not ordinarily…offers to sell.
2. It is…possible to make an offer by an advertisement directed to the general public, but there must ordinarily be some language of commitment or some invitation to take action without further communication. |
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Term
| Williston, Contracts § 27 |
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Definition
| states that test of whether a binding obligation may originate in advertisements addressed to the general public is “whether the facts show that some performance was promised in positive terms in return for something requested.” Where offer is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer, acceptance of which will complete the contract. |
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Term
| 1. What constitutes an offer? |
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Definition
1. Language
2. Context (second to last statement)
3. Completeness (clear, definite, and explicit, detailed)
4. Number of persons to whom offer is made (to others also means no offer) |
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Term
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Definition
: Yes an Offer
i.Clear, definite, and explicit, nothing left open for negotiation
1. Advertisement to sell coat for $1, first come, first serve (Lefkowitz v. Great Minneapolis Supply Store) |
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Term
| Things which terminate an offerree’s power of acceptance §36 |
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Definition
i. Rejection
ii. Counteroffer
iii. Lapse of time
iv. Revocation by offeror
v. Death or incapacity of either party |
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Term
| What Makes a Proposal an Offer Rather than a Solicitation |
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Definition
a. Lefkowitz v. Great Minneapolis Surplus Store
i. An advertisement could be an offer if, interpreted in context, it would lead a reasonable prospective buyer to understand that an offer was intended
b. Harris v. Time, Inc.
i. An advertisement that promises something to a customer in return for a clear, definite action can be viewed as an offer
c. Leonard v. PepsiCo, Inc
i. An advertisement is not transformed into an enforceable offer merely by a potential offeree’s expression of willingness to accept the offer through, among other means, completion of an order form |
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Term
| Once an offer has been made, there are three possible responses that can be made by the offeree |
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Definition
a. Acceptance (within timeframe and in manner prescribed by offeror)
i. Contract is formed immediately upon acceptance, since the power of acceptance must be held by the offeree or else there is no offer
b. Refusal (or inaction)
i. With an express refusal, the offer is terminated as soon as it is refused. Offer may also expire if the refusal or acceptance is not made within the allotted time.
c. Counteroffer
i. This is, in effect, a refusal of the initial offer and then a new offer made to the first party
d. The offeror in most situation retains the right to withdraw the offer at any time before it is accepted. |
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Term
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Definition
| provides that where the mail is an expressly or impliedly authorized medium of acceptance, a properly addressed acceptance is effective when it is mailed, not when it is received, |
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Term
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Definition
1. In a fixed time if it is specified
2. Or in a “reasonable time.” |
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Term
| Glover v. Jewish War Veterans of United States |
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Definition
| There can be no contract unless the claimant knows of the offer, even if actions of claimant would have indicated agreement to offer |
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Term
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Definition
A definite rejection once communicated extinguishes the power of acceptance.
When you reject it, it is over, even if it was to remain open for 2 more weeks. |
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Term
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Definition
| the usual rule is that if an offeree fails to respond to an offer before it expires, this inaction is a rejection. |
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Term
| 2. Restatement, Second §69. Acceptance by Silence or Exercise of Dominion |
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Definition
i. Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation
ii. Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer.
iii. Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept.
b. An offeree who does any act inconsistent with the offeror’s ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror, it is an acceptance only if ratified by him. |
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Term
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Definition
one the offeree (now offeror) makes a counteroffer, he cannot accept the original offer.
Classical contract law required the mirror image rule, the offer and acceptance had to match identically or there was no contract. |
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Term
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Definition
| defines “goods” to mean “…all things that are movable at the time of identification to a contract for sale…” |
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Term
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Definition
| defines a sale as “…the passing of title from the seller to the buyer for a price…” |
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Term
| R 2d §50 Acceptance Defined; Acceptance by Performance; Acceptance by promise. |
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Definition
| a. Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer. |
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Term
| 1. R 2d §1 – Contract Defined |
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Definition
| a. A contract is a promise or set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. |
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Term
| iGoods or services? UCC 2 |
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Definition
1. Predominant factor test
a. Look to language of contract, in light of situation of parties and surrounding circumstances
b. Consider final product the purchaser bargained to receive, and whether it may be described as a good or a service
c. Examine the cost involved for the goods or services, and whether the purchaser was charged only for a good, or a price based on both goods and services
i. If the cost of the goods is but a small portion of the overall contract price, such fact would increase the likelihood that the services portion predominates
2. Gravaman test
a. Looks to that portion of transaction upon which complaint is based, and whether that portion is predominantly goods or services |
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Term
| Give three examples of Contracts |
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Definition
| Option, Unilateral, Bilateral |
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Term
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Definition
| An option Contract is a promise which meets the requirements for the formation of a contract and limits the promisors power to revoke the offer. |
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Term
| Define Unilateral Contract |
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Definition
| A contract in which only one party makes a promise or undertakes a performance. |
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Term
| Define Bilateral Contract |
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Definition
| A contract in which each party promises a performance so that each party is an obligor on that party's own promise and an obligee on the other's promise; a contract in which the parties obligate themselves reciprocally, so that the obligationa of one party is correlative to the obligation of the others |
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Term
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Definition
| a promise is a manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promise in understanding that a commitment has been made. |
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Term
| How many types of promises are there? List. |
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Definition
| Three; Illusory, Gratuitous, Implied |
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Term
| Define an illussory promise |
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Definition
| An apparent promise that is so promise that is so qualified, or in respect of which such wide discretion is reserved, that the apparent promisor actually makes no binding commitment at all |
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Term
| Define Gratutious Promise |
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Definition
| A promise made in exchange in exchange for nothing; a promise not supported by consideration. |
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Term
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Definition
| A promise created by law to render a person liable on a contract so as to avoid fraud unjust enrichment |
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Term
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Definition
| A consideration is something (such as an act. a forberance, or a return promise) bargained for and received by a promisor from a promisee; which motivates a person to do something. |
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Term
| How many types of consideration are there? Please list. |
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Definition
| 4, Nominal, Illegal, Adequate, Past |
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Term
| Define Nominal Consideration |
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Definition
| Nominal Consideration is consideration that is so significant that is so insignificant as to bear no relationship to the value of what is being exchanged |
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Term
| Define Illegal Consideration. |
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Definition
| Consideration that is contrary to law or public policy or prejudicial to public interest. |
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Term
| Define Adequate Consideration |
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Definition
| COnsideration that is fair and reasonable under the circumstances of the agreeement |
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Term
| Define Past Consideration |
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Definition
| An act done or a promise given by a promisee before making a promise sought to be enforced. Past consideration is not consideration for the new promise because it has not been given in exchange for this promise. |
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Term
| Define Shrink wrap License |
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Definition
| Terms and conditions printed on the outside of a software package to advise the buyer that opening, the buy becomes legally bound to abide by the term of the license. |
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Term
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Definition
| is the retention of a benefit conferred by another, with offering compensation is reasonably expected |
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Term
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Definition
| is the principle that a promise made withput consideration may nonetheless be enforced to prevent injustice if the promissor should have easonable expected the promisee to rely on the promise and if the promisee did actually rely on the promise to her detriment |
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Term
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Definition
| Preexisting duty rule holds that the perfromance of a promise to perform an existing duty cannot qualify as consideration |
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Term
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Definition
| raditional K doctrine favors the party who fires the “last shot” in the battle of the forms. Performance makes it clear there is a contract, and since each subsequent form is a counter offer, rejecting any prior offer of the other party, the resulting contract must be on the terms of the party who sends the last counteroffer. |
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Term
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Definition
A legal substitute for a contract
It is used when a court wishes to create an obligation upon a non-contracting party to avoid injustice and to ensure fairness. |
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Term
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Definition
| A person who voluntarily, and without request or pre-existing legal duty, interjects herself into the affairs of another, and then seeks remuneration for services or reimbursement. |
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Term
| Rejection of an Irrevocable Offer |
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Definition
Rejection does not kill the offer
Under the UCC if you reject the firm offer – it does not necessarily die
The offer remains to be open for the time agreed upon. |
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Term
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Definition
Removes the mirror image if the acceptance adds terms or varies the offer
UNLESS – acceptance is made EXPRESSLY conditional on the offeror’s assent to the new terms
IMPORTANT – if the acceptance does not take all the offeror’s terms, it is still operative under the UCC. |
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Term
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Definition
No place for delivery buyer must go to seller. 2-308
If contract does not provide a time for delivery it is a reasonable time 2-309
No time for payment it is due at time of receipt of goods 2-310
No price - court can impose price 2-305
If parties have not agreed on quantity it is NOT A CONTRACT - indefiniteness |
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Term
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Definition
Two types:
1. Fraud by Concealment
Depends on the subject of non-disclosure.
Basically, it needs to be material.
In other words, it would affect a reasonable person’s decision to enter into the contract.
2. Fraud by Misrepresentation
You might be able to get tort damages – more money!!!
However, you will have to prove scienter – knowledge or recklessness with regards to the truthfulness of the |
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