contracts elements

What is the objective test for mutual assent?

Whether a reasonable person would think a contract was formed based on words or conduct

Are advertisements offers?

No, unless they are clear, definite, explicit, and leave nothing open

When can a price quote be an offer?

When it is sufficiently detailed and signals that assent alone will form a contract

What terminates an offer?

Rejection, revocation, lapse, death/incapacity

When is revocation effective?

When received by the offeree

What is indirect revocation?

Offeror takes definite action inconsistent with the offer and offeree learns from a reliable source

When does acceptance become effective under the mailbox rule?

When properly dispatched

What is required for proper dispatch?

Correct address and proper postage

When does the mailbox rule NOT apply?

Option contracts → acceptance effective only upon receipt

Can silence be acceptance?

Generally no, unless exception applies

When is silence acceptance?

1. Benefit knowingly accepted 2. Offer says silence counts and offeree intends it 3. Prior dealings make it reasonable

What makes a promise illusory?

One party retains unrestricted discretion to perform or not

What saves an illusory promise?

Good faith or objective limits on discretion

Does consideration require equal value?

No, courts do not weigh adequacy

What is peppercorn consideration?

Fake or nominal consideration used as a pretense for a gift

Is past performance valid consideration?

No, because it was not bargained for

When can forbearance be consideration?

The claim may be uncertain or even wrong, but the person honestly and reasonably thinks it could be valid

What is the exception to the pre-existing duty rule?

New or different consideration OR modification under UCC (good faith)

What is the pre-existing duty rule?

Performing a duty you already owe is not consideration

What is required for promissory estoppel?

Reasonable + foreseeable reliance

What limits promissory estoppel damages?

Justice may limit remedy (often reliance damages)

What is the “material alteration” rule under 2-207?

Terms that would surprise or hardship the other party do not become part of the contract

What happens to additional terms between non-merchants?

They are proposals only, not automatically included

What happens to different terms under 2-207?

Usually knocked out and replaced with gap fillers

What is the knockout rule?

Conflicting terms are removed and replaced with UCC gap fillers

What is required under the statute of frauds for goods?

Writing + quantity term

What is the merchant confirmation rule?

Between merchants, writing binds unless objected to within 10 days

What is the exception for specially manufactured goods?

No SOF writing required if goods are not resellable and seller has begun work

What is the main purpose rule (suretyship)?

Oral promise enforceable if promisor’s main purpose is personal benefit

When is a contract within the one-year provision?

Only if it is impossible to perform within one year

What is the perfect tender rule?

Buyer may reject goods for any nonconformity

What must a buyer do to reject goods?

Notify seller within a reasonable time

When can a seller cure?

Before deadline OR after if reasonable belief goods were acceptable

What is required for an express warranty?

Affirmation of fact, description, or sample that becomes part of the bargain

What is puffery?

Opinion or sales talk → not a warranty

What is required for implied warranty of merchantability?

Seller is a merchant of that kind and goods are fit for ordinary purpose

What is required for implied warranty of fitness for a particular purpose?

1. Seller knows the buyer’s particular purpose 2. Seller knows the buyer is relying on seller’s skill or judgment 3. Buyer actually and reasonably relies on that skill or judgment

How can implied warranties be disclaimed?

Conspicuous language, “as is,” or buyer inspection

What is a condition?

An event that must occur before performance is due

What is the difference between condition and duty?

Condition affects whether duty arises; duty is an obligation to perform

What is a material breach?

Breach that allows the other party to withhold performance

What is a minor breach?

Party must still perform but may seek damages

What is required for liquidated damages to be valid?

Reasonable estimate + difficult to measure damages

What makes a liquidated damages clause a penalty?

Unreasonably large or not tied to actual harm

What is foreseeability in damages?

Loss must be foreseeable at time of contract formation

What is mitigation?

Non-breaching party must take reasonable steps to reduce damages

What is certainty requirement?

Damages must be reasonably calculable, not speculative

What is the rule for assignment?

Rights are freely assignable unless exception applies

When is assignment not allowed?

If it materially increases risk or is prohibited

What is the rule for delegation?

Duties can be delegated unless there is a substantial interest in original performer

What is novation?

Substitution of a new party that releases the original obligor