Contracts
1-24 K formation WHAT IS A CONTRACT?
3 Parts
1. Mutual assent: an offer & acceptance
2. Consideration or a substitute &
3. No defenses to formation.
– Can have an agreement w/o K
– Can have K w/o agreement
Part of a K § 2-24
1. Offer: § 24 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 is invited and will conclude it.
Durations:
must accept before expiration.
Can be revoked until acceptance.
Contracts § 90 firm offers .
Revocation: what an offeror does to terminate it
Rejection- what an offeree does by express or impliedly communicating disinterst.
Counter-offer is a rejection
Acceptance
reasonable means to communicate acceptance.
Look up acceptance when mailed ruled 2-207 also explaination in book pg. 185
Silence not an acceptance, except when custom & past practice shows reasonable to treat as one.
Must use reasonable means to communicate acceptance.
See battle of the forms
2-207 if there is a definite & seasonable expression of acceptance, there is a K
Counteroffer: § 39
A counter-offer made by an offeree to his offeror r/t the same matter as the original offer and proposing a substituted bargain differeing from that proposed by the original offer.
An offeree’s power of acceptance is terminated by his making of a c/o manifests a contrary intention of the offeree.
Rejection: §38
An offeree’s power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention.
A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement.
Revocation: § 42 An offeree’s power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the propsed K.
Preliminary negotiations: §26 a manifestation of willingness to enter a bargain is not an offer if the person to whom it is addressed knows or has reason to know that the person making it does not intend to conclude a bargain until he has made a further manifestation of assent.
Invitation to make offer
certainty 2-204(3)
Agreement
Sufficient to show agreement
May be found even if the moment of its making is undetermined
Intnentions to make a K even if one or more terms are left open.
Loopholes used now to get clients out of Ks
Performance- if you failed to “substantially perform’ I need not continue to perform
I need not cont to perform if something has happened “ the non-occurance of which was a basic assumption on which the K was made.
Advertisments are usually not offers.
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ment securities
Secured transactions, sales of accounts and chattel paper
Must think about common law along with the UCC. Look 1st to UCC then look to C/L if no displacement to supplement the UCC.
HYPOS.
5k worth of goods.
5k worth of services. How do we deal with a problem?
PREDOMINENT PURPOSE APPROACH: Bonebrake v. Cox case predominant characteristic of the deal. Courts use this. If predominantly services, C/L applies, goods-UCC. So, how do you determine?
i. Cost of each part
ii. NOT: Source of the other part of the deal. If they are predominately the seller of goods. Ex. h20 purchased from home depot vs. from a plumber.
iii. What to do about software? Still grappling with this. UCITA created. This body’s goal was to fill in the gap. Problem-not adopted so sort of died on the vine. You have a license with many regulations to use. May see this revived or another provision added to UCC.
