Contracts (Grossman) All Cards
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298 Terms
The four basic elements required to form a valid contract are
…
…
… and
…
offer
acceptance
consideration
no valid defense
⭐!!!! An offer is a manifestation of an intent to enter into a […]
contract
For an offer to be valid, it must contain […] terms.
specific
The more specific the terms in a communication, the more likely it is a valid […]
offer
Generally, advertisements are considered […] to offer, not offers themselves.
invitations
Advertisements are typically not offers because they are not specific enough as to the […] and […]
party, terms
⭐An advertisement can become an offer if it is highly specific about what?
terms, offeree
An ad stating "the first 25 people to arrive will receive a product for $10" is considered an […] because its terms and offerees are specific.
offer
Once a valid offer is made, the other party gains the power to […]
accept
⭐⭐The power of acceptance can be terminated in four ways:
…
…
… and
…
offeror dies
offeror revokes
offeree makes counteroffer or rejects
time lapses
The power of acceptance is terminated by the […] of the offeror.
death
An offer can terminate due to a lapse of time, which is either the time stated in the offer or a […] amount of time.
reasonable
An offer is terminated if the offeror […] it before acceptance.
revokes
A rejection or a […] by the offeree terminates the original offer.
counteroffer
A response like "I'll give you $7,500" to a $10,000 offer is a […] that terminates the original offer.
counteroffer
A counteroffer terminates the original offer and creates a […] one.
new
A simple rejection by the offeree […] the offer.
terminates
T/F: Once an offer is made, it cannot be taken back by the offeror.
F (default = revocable before acceptance)
The default rule is that offers are freely […] by the offeror at any time before acceptance.
revocable
⭐Direct revocation occurs when the offeror communicates the revocation directly to the […]
offeree
Indirect revocation occurs when the offeree learns from a […] source that the offeror has taken action […] with the offer.
reliable inconsistent
⭐An example of indirect revocation is when an offeree learns the offeror […] the subject of the offer to someone else.
sold
T/F: An offeror's promise to keep an offer open is always legally binding.
F
Common Law: New consideration
UCC: Firm Offer requirements
An offer becomes an irrevocable option contract under common law if the offeror promises to keep it open and that promise is supported by […]
separate consideration
An option contract is an irrevocable offer for a period of time, supported by […]
separate consideration
⭐Option contracts under the common law typically apply to contracts for [..1..] and [..2..]
services, real estate
If an offeror promises to keep an offer open but receives no consideration for that promise, the offer is not an […] and remains revocable.
option contract
The UCC rule for irrevocable offers is called the […] offer rule.
firm
The UCC Firm Offer rule applies to contracts for the sale of […]
goods
⭐An offer becomes an irrevocable firm offer if:
…
…
Merchant makes the offer
In a signed writing
Under the UCC firm offer rule, if a time is stated in the writing, the offer remains open for that time. If no time is stated, it remains open for a reasonable time. The open time may never exceed […]
three months
T/F: When the time period for a UCC firm offer expires, the offer automatically terminates.
F (it just becomes revocable)
A unilateral contract is a […] in exchange for […]
promise, performance
In a unilateral contract, the offeror's offer becomes irrevocable once the offeree […]
begins performance
When an offeree begins performance on a unilateral contract, the offeror must allow a […] time to complete performance.
reasonable
In a unilateral contract, the contract is not formed until performance is […]
complete
A bilateral contract is a […] in exchange for a […]
promise, promise
A bilateral contract is formed as soon as the […] are exchanged.
promises
Under the common law, the […] rule requires that the acceptance must exactly match the terms of the offer.
mirror image
Under the mirror image rule, if an acceptance changes or adds terms, it is considered a rejection and a […]
counteroffer
If an offeror specifies a required manner of acceptance, the offeree […] use that method for the acceptance to be valid.
must
If an offer does not specify a manner of acceptance, any […] means will suffice.
reasonable
Performing the act requested in an offer can constitute […], especially in unilateral contracts.
acceptance
⭐T/F: An offeree's silence can never be considered a valid acceptance of an offer.
F (prior dealings or circumstances may indicate acceptance)
⭐⭐The exception to the rule that silence is not acceptance occurs when [...] or circumstances suggest the parties would understand silence as acceptance.
prior dealings
The […] rule states that an acceptance sent by mail is effective once sent.
mailbox
An acceptance is effective when it is […] if sent by mail.
sent
The mailbox rule does not apply if an offeree sends a [..1..] first, and then sends an [..2..]
rejection, acceptance
When an offeree sends a rejection then an acceptance, whichever communication […] first controls.
arrives
Under the UCC, an acceptance with different or additional terms […] create a contract.
can
In a UCC contract between [..1..], new terms in an acceptance are treated as [..2..] for addition to the contract.
merchants
proposals
Under the UCC, new terms will be included in the contract UNLESS they [..1..] the original contract, the offeror [..2..] to them, or the offer expressly [..3..] acceptance to its terms.
materially alter, objects, limits
⭐The mnemonic for when new terms are excluded under the UCC is M-O-L, which stands for what?
Materially alters
Offeror objects
Limited (offeror limited acceptance to the offer’s exact terms)
⭐!!!! Consideration is defined as a […]
bargained-for exchange
⭐Consideration requires each party to incur a […]
legal detriment
Legal detriment means doing something one is not legally [..1..] to do or refraining from something one has a legal [..2..] to do.
obligated, right
T/F: Courts will not enforce a contract if they feel the consideration is inadequate, such as a "peppercorn"
F (Courts do not question the adequacy of consideration as long as a bargain exists)
A promise to pay for an act that has already been performed is considered […] consideration and is not enforceable.
past
A promise where the promisor retains complete discretion to perform is an […] promise and not valid consideration.
illusory
⭐What kind of promise is this an example of: "I'll sell you my car if I feel like it."
illusory promise
⭐Modern courts try to avoid the illusory promise doctrine by enforcing the promise if there is any way to read a […] into the facts.
commitment
⭐⭐⭐A promise to make a gift is a […] promise and is unenforceable due to a lack of consideration.
gratuitous
⭐Usually, can a gift that’s already been given be taken back?
No
⭐⭐A new promise to pay a debt barred by the […] is enforceable even without new consideration.
Statute of Limitations
⭐A new promise to pay a debt that was discharged in […] is enforceable without new consideration.
Bankruptcy
A promise not to sue on a claim—known as […]—can be valid consideration.
forbearance to sue
⭐Forbearance to sue is valid consideration if the promisor had a […] belief in the validity of the claim.
good faith
⭐⭐The mnemonic for promises enforceable without new consideration is S-B-F
Statute of Limitations
Bankruptcy
Forbearance to sue
[…] is a doctrine used to enforce a promise even when there is no consideration.
Promissory Estoppel
Promissory estoppel is a […] for consideration, not a form of it.
substitute
⭐!!!! The elements of promissory estoppel are:
…
…
… and
…
a promise
reasonable expectation of detrimental reliance
actual detrimental reliance, and
injustice absent enforcement
⭐The element of promissory estoppel where the promisee relies on the promise is called […] reliance.
detrimental
⭐⭐Accord and satisfaction is an agreement to accept a [..1..] performance to [..2..] an existing duty.
different
discharge
⭐A debt where both parties agree on the amount owed is called an undisputed or […] debt.
liquidated
⭐T/F: Cashing a check for a lesser amount marked "paid in full" for an undisputed (liquidated) debt discharges the entire debt.
F (The creditor can still sue for the remaining balance)
A debt where there is a good-faith dispute over the amount or existence of the debt is called a disputed or […] debt.
unliquidated
⭐⭐In an unliquidated debt situation—where the the amount is [..1..]—if the parties negotiate a settlement—known as [..2..]—and the debtor pays it, the original debt is discharged.
uncertain
an accord
⭐For a disputed debt, cashing a check for a lesser amount marked "paid in full" operates as an […] and […], discharging the debt.
accord, satisfaction
A contract entered into with a minor is considered […], not void.
voidable
A contract involving a minor is voidable at the option of the […]
minor
Upon reaching the age of majority, a person can […] a contract they made as a minor, making it fully enforceable.
ratify
T/F: Once a minor ratifies a contract upon reaching the age of majority, it can still be voided.
F (ratification makes it fully enforceable)
A contract entered into with a person who is legally insane is considered […]
void
A contract with a minor is [..1..], whereas a contract with a legally insane person is [..2..]
voidable, void
⭐Duress arises when a party is [..1..] to enter a contract through a wrongful [..2..] or [..3..]
induced
act
threat
Duress involves a wrongful [..1..] or [..2..] that overcomes the other party's [..3..]
act
threat
free will
Undue influence occurs when there is an […] in the bargaining positions between parties.
unevenness
In a case of undue influence, one party uses their superior position to take advantage of a […] party.
vulnerable
⭐Unlike duress—which focuses on an explicit wrongful act or threat—undue influence focuses on the [..1..] process and [..2..] between the parties.
negotiation, relationship
⭐Factors indicating undue influence include:
…
…
…
a party's vulnerability
pressure to make a quick decision
negotiating in an unusual location
The defense of […] applies when the result of enforcing a contract is so one-sided that it "shocks the conscience."
unconscionability
⭐Unconscionability focuses on the [..1..] and [..2..] of the deal itself.
substance, outcome
A mutual mistake occurs when [..1..] are mistaken about a [..2..]
both parties, a material term of the contract.
T/F: A mutual mistake regarding a material term is a valid defense to contract enforceability.
T
The typical remedy sought for a mutual mistake is […] of the contract.
rescission (not reformation)
A unilateral mistake occurs when only […] party is mistaken about a term.
one
The general rule is that a unilateral mistake is […]
not a valid defense to enforceability.
⭐⭐⭐An exception to the unilateral mistake rule exists if the non-mistaken party [..1..] In which case, the non-mistaken party is entitled to [..2..]
knew or should have known about the mistake
rescission
⭐A unilateral mistake can be a defense if it was the result of a […]
clerical error
⭐When an exception to the unilateral mistake rule applies, the remedy may be […] of the contract to correct the error.
reformation