Contracts and Sales Distinctions Final Review

A comprehensive set of vocabulary flashcards covering the formation, termination, defenses, and remedies of contracts with specific Georgia points of law and UCC distinctions based distinctions.

Offer

An objective manifestation of willingness by the offeror to enter into an agreement that creates the power of acceptance in the offeree.

GA Point of Law (Offeror Mastery)

The offeror is the master of his offer, so an offeree’s failure to comply with the precise terms of the offer is generally fatal to the existence of a valid contract.

Common Law Essential Terms

The parties, subject matter, price, and quantity must be covered in the contract.

GA Point of Law (Service Contracts)

Any automatic renewal provision in a service contract or offer must be clearly and conspicuously disclosed, or the provision is void and unenforceable.

UCC Essential Terms

The only essential term is quantity, and the UCC will \"fill the gap\" if other terms are missing.

Unilateral Contract

A contract formed when an act is requested in return for a promise; the offeror cannot revoke once the offeree has begun performance.

Option Contract

A contract where consideration is paid to keep an offer open for a specified period, preventing the offeror from revoking.

UCC Firm-Offer Rule

An offer is irrevocable for a reasonable time (not exceeding $3$ months) if the offeror is a merchant and assurances are made in an authenticated writing that the offer will remain open.

GA Distinction (Merchant Definition)

The definition for a merchant does not include any businessperson in a commercial transaction.

Mailbox Rule

A rule applying almost exclusively to bilateral contracts where acceptance is effective when sent (not upon receipt), unless the offer provides otherwise.

CL Mirror-Image Rule

The acceptance must mirror the terms of the offer exactly; any change or addition acts as a rejection and a new counteroffer.

UCC Battle of Forms (Additional Terms)

Between merchants, additional terms are automatically included unless they materially alter the contract, the offer expressly limits acceptance, or the offeror objects within a reasonable time.

UCC Knock-out Rule

Different terms in an offer and acceptance nullify each other, and the court uses Article 2’s gap-filling provisions to patch the holes.

GA Distinction (Valuable Consideration)

Founded on money or something that can be converted into money, though marriage is also considered valuable consideration.

GA Distinction (Contracts Under Seal)

These raise a rebuttable presumption of consideration, but any nominal consideration will suffice to defeat a defense of failure of consideration.

Preexisting-Duty Rule

Under common law, performing a duty one is already contractually obligated to do does not qualify as consideration unless something additional is given or the duty is varied.

Accord and Satisfaction

An agreement (accord) to accept different performance to satisfy an existing duty, which is discharged once the performance (satisfaction) is complete.

GA Point of Law (Mutual Mistake)

A contract cannot be enforced if it was executed based on a mutual mistake of law or fact.

Fraud in Factum

A fraudulent misrepresentation that prevents a party from knowing the character or essential term of a transaction, rendering the apparent contract void.

Fraud in Inducement

A fraudulent misrepresentation used to induce another to enter into a contract, making it voidable by the adversely affected party.

GA Distinction (Duress)

Duress can be by imprisonment, threats, or other acts and must be such that it overcomes the mind and will of a person of ordinary firmness.

GA Distinction (Capacity for Infancy)

Individuals under $18$ do not have the capacity to contract, but contracts for necessaries or those made while the minor is engaged in business are binding.

Implied Warranty of Merchantability

An implied warranty that goods are fit for their ordinary purpose, applicable whenever the seller is a merchant dealing in goods of that kind.

GA Distinction (Third-Party Beneficiary Standing)

For a third party to have standing to enforce a contract, it must clearly appear that both parties intended for that third party to be a beneficiary.

UCC Statute of Frauds

Contracts for the sale of goods for at least $500$ must be in writing, identify parties, contain a quantity term, and be signed by the party to be charged.

GA Distinction (Additional SoF Categories)

Required writing includes a promise by an executor to pay damages from their own estate, promises to revive debts barred by SoL, commitments to lend money, and agreements to modify/rescind contracts in these categories.

Anticipatory Repudiation

A clear and unequivocal repudiation of a promise before performance is due, which the nonbreaching party may treat as an immediate breach.

Expectation Damages

Damages intended to put the nonbreaching party in the same position as if the contract had been performed, calculated as: loss in value + other loss − cost avoided − loss avoided.

GA Point of Law (Punitive Damages)

Punitive damages are not available in contract actions unless otherwise provided by law.

UCC Right to Reclaim Goods

A seller may reclaim goods from an insolvent buyer if they make a demand within $10$ days after the buyer receives the goods.

UCC Statute of Limitations

An action for breach of any sales contract must be commenced within $4$ years after the cause of action has accrued.