What is a Contract?
A Legally enforceable agreement
What is an Express Contract?
A contract created by words, oral or written
What is a Contract implied in fact?
A contract Created by the parties conduct
Bilateral Contract
Offer can be accepted in any reasonable way
Unilateral Contract
Offer Can only be accepted by performing
What is an Offer
A manifestation of an intention to be bound
Indefinite Terms in a Contract
If any of the terms are too indefinite the contract cannot be enforced.
Is a contract legally enforceable with Open Price term
the court will read in reasonable price, except in sale of real property
What is a Requirements Contract?
A contract for the sale of goods can state the quantity of goods to be delivered under the contract in terms of; 1. the buyers requirements, or, 2., the seller's output, or, 3., in terms of exclusivity
When does the offer Lapse?
An offer lapses after a stated term, or, reasonable time has passed.
Effects of Death of a party Prior To Acceptance
Death or incapacity of either party after offer, but before acceptance, terminates offer; except irrevocable offers
Revocation of an offer
An offer terminates when the offeror revokes the offer
When can an offer be revoked?
An offer can be revoked anytime before acceptance
What is a Revocation by words or conduct of the Offeror
1., Unambiguous statement by the offeror to offeree of unwillingness or inability to contract; or 2., unambiguous conduct by offeror indicating an unwillingness, or inability to contract, that offeree is AWARE of.
Indirect revocation
Offeror engages in conduct that indicates that he changed his mind AND the offeree is AWARE of conduct
Direct Revocation
The offeror indicates directly to the offeree that he has changed his mind about the deal
When is a revocation effective
A revocation is effective only when it is received
When is revocation of an offer through mail effective
Revocation of an offer sent through the mail is not effective until received
Revocation after acceptance
An offer cannot be revoked after it has been accepted.
State 4 kinds of irrevocable offers
1. Option; 2. UCC firm offer rule; 3. Foreseeable Reliance Before Acceptance; and 4. Starting to perform in a Unilateral Contract
Option Contract exception to revocation
Offeror promises to keep the offer open that is supported by consideration
UCC Firm Offer
An offer to buy or sell goods can't be revoked for up to three months if, 1. party is a merchant; and 2., promises in a signed writing to keep offer open;
Foreseeable Reliance Before Acceptance
An offer can't be revoked if there is 1., reliance that is, 2., reasonably foreseeable, and 3., detremental
Starting Performance in a Unilateral Contract
The start of performance pursuant to an offer to enter into a unilateral contract, makes that offer irrevocable, for a reasonable time, to complete performance.
M.B.E. vs. NY Rules regarding Starting to Perform on Unilateral Contract
M.B.E.; Once performance starts, the offer becomes irrevocable;
New York: an offer can be revoked until performance is completed.
Does Mere Preparation make an offer irrevocable?
Mere preparation does not make the offer irrevocable, although preparation can be foreseeable reliance
What is the effect of Rejection of an offer?
An offer terminates when an Offeree rejects it
How can an offer be Rejected?
Words or conduct of the Offeree can terminate an offer
List three methods of indirect rejection
1., the counter offer; 2., Conditional Acceptance; and 3., Additional Terms
Indirect Rejection by Counter Offer
Counteroffer always terminates the offer and becomes a new offer. Mere bargaining does not terminate an offer. (e.g. questions)
Indirect Rejection by Conditional Acceptance
Conditional Acceptance terminates the offer and becomes a new offer. Look for words like accept followed by "if," "only if," "provided," "so long as," "but," "on the condition that.