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Contract Formation - Coggle Diagram
Contract Formation
Offer & Acceptance: (1) manifestation of mutual assent. (2) objective theory. (3) implied-in-fact. (4) clear, definite, non-negotiable, and explicit. (5) Offeror is master of the offer.
Modes of Acceptance: Restatements 53, 54, 56, 62, 63, 69.
Problems: (1) silence as acceptance - generally not. (2) Battle of Forms UCC 2-207. (3) Non-conforming goods UCC 2-206. (4) Duty to Read - generally yes. (5) Shrinkwrap & Clickwrap OK, Browsewrap not OK (6) Notice of Acceptance - not required by default. (7) Relational Contracts. (8) Gap-filling - UCC 2-204 and 2-305. Will gap fill service contract price after performance only. UCC doesn't gap fill quantity. (9) pre-contractual liability - no good faith requirement, promissory estoppel available.
Type of Contract Created: (1) Bilateral. (2) Unilateral. (3) Option Contract. (4) Forward/Futures. (5) Implied-in-Fact. (6) Quasi-Contract. (7) Requirements. (8) Output.
Performance Rules: (1) Good Faith requirement - mandatory but can specify level. (2) Conditional Satisfaction - ok if done in good faith. (3) Conditions Precedent - must complete to create a duty. (4) Conditions Subsequent - complete to discharge a duty. (5) state of mind, fair dealing, opportunism, or inefficient behavior
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Breach
UCC = Perfect Tender Rule, otherwise Substantial Performance
Material Breach = failure to perform when due. Election of whether to cancel or get damages (total or partial breach)
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Terminating Offers: (1) option contracts irrevocable. (2) notice - actual or constructive. (3) rejection. (4) counter-offer. (5) lapse of time. (6) death or incapacity
Consideration: bargain theory, mutuality of obligation, reciprocal inducement. Both parties must exchange promises but adequacy not needed.
Problems with Consideration: (1) gratuitous promise is unenforceable. (2) Intent for consideration isn't consideration. (3) The seal does not bind without consideration. (4) Nominal Consideration is not sufficient consideration. (5) Sham consideration is not consideration. (6) Moral Consideration is no consideration.... UNLESS needed to prevent injustice or in support of a previously conferred benefit. (7) Emotional language unenforceable. (8) ideas as consideration need not be novel. (9) Preexisting Duty Rule. (10) One-sided modification rule UCC 2-209 and Restatement 89. (11) Illusory promise unenforceable
Consideration Substitute: (1) Promissory Estoppel - reliance to detriment, reasonable reliance, foreseeable reliance. (2) Unilateral Contracts - performance as consideration.
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