Contracts

Which Act did the English Parliament enact in 1677? A. The Statute of Frauds. B. The Fraudulent Conveyance Act. C. The U.K. Companies Act. D. None of the above.

A. The Statute of Frauds

Which, if any, of the following did the American Law Institute (ALI) formally adopt in 1932? A. The Uniform Commercial Code B. The Revised Article 2A of the Uniform Commercial Code C. The Restatement of Contracts D. None of the above.

C. The Restatement of Contracts

If the offeree's manifestation of assent contains different terms, it really constitutes a counteroffer. By contrast, if the offeree's manifestation of assent contains additional terms, it constitutes an acceptance plus an offer to enter into an additional agreement, and therefore at least one contract is formed. T/F?

False

The Convention on the International Sale of Goods (CISG) applies to Transactions between consumers, but only if both parties reside in different countries and only if both countries are parties to the CISG. T/F?

False

In Drennan v. Star Paving Company, the plaintiff accepted defendant's offer before the defendant could attempt to revoke it. T/F?

False; As soon as the defendant made the offer the plaintiff used it to make his offer, but before the plaintiff could accept the offer, the defendant attempted to revoke it.

The so-called mailbox rule applies even where the offeror has expressly stated that he must receive the acceptance for it to be effective. T/F?

False; Basically the offeror can reject the mailbox rule and say **** you this contract isn't legit until right when I get my money - it isn't legit just because the money is in the mail.

An intended meaning, even one that is recognized by the other party, never trumps the reasonable meaning of the speaker's words.

False; EX: Colorblind guy owns A and B and tells friend he wants to sell him A. He means that he wants to sell B and his friend understands that he wants to sell B, so despite what one would reasonably interpret from the outside regarding the contract, the recognized meaning between the friends is what counts in determining the contract's legitimacy.

A contract does not come into existence if the offeror is secretly unwilling to enter into the contract. Whether the offeree could have recognized this is immaterial. T/F?

False; EX: No, we look mostly at manifestation in deciding if a contract is legit - see the reasonable interpretation standard. So it doesn't matter if you are secretly unwilling, as we're looking at what you actually said.

According to the Restatement, an offer can be accepted only by the person who will receive the performance. T/F?

False; EX: poor guy wants to rent a car. Seller says sure but only if you wife promises to pay. In this case the poor guy is getting the service of the rented car, but the offer has to be accepted by the wife before the contract is legit.

A statement cannot constitute an offer if one or more terms of the proposed bargain are left open or uncertain.

False; I guess you can have a legit contract where all of the terms are uncertain. Maybe an example would be I promise to do Y if you do X. I could not make clear how I'm going to go about doing Y or how I want X to be done, so long as both things are done, I guess the details don't matter, and it could still be a valid contract.

Under the CISG, it is the offeror rather than the offeree who bears the risk that the acceptance does not arrive. T/F?

False; It is the offeree who bears the risk - it would be stupid otherwise. The offeror could be eternally ****ed if the offeree haphazardly sent the acceptance or whatever to the wrong address, as he wouldn't have any onus to fix things, as the offeror would.

Under the terminology created by Kaplow, standards are norms whose meaning is clear even before you go to court ("ex ante"), whereas rules are norms whose meaning is determined only ex pose by the courts. T/F?

False; It's the other way around.

Once an offer has been made, it cannot be revoked. T/F?

False; Offers can be revoked, but there are rules that govern whether a revocation is legit. Off the top of my head, the revocation isn't legit if the offeree has already dispatched a mailed acceptance. At that point, the revocation is too late.

In James Baird Co. v. Gimbel Bros., the plaintiff could not claim detrimental reliance because he could have withdrawn his own bid before the Department of Highways accepted it. T/F?

False; The crucial point is that by the time the defendant alerted the plaintiff to the mistake in the defendant's offer, the time had passed for the plaintiff to submit another bid.

When the offeror has made an offer than can only be accepted by performance, the offeror, as a general rule, is free to revoke his offer at any time until the offeree has rendered the complete performance.

False; once the offeree begins performing, the contract is binding.

In James Baird Co. v. Gimel Bros., the court came to the conclusion that the plaintiff accepted defendant's offer by putting in a bid to the Department of Highways. T/F?

False; the court notes "it seems entirely clear that the contractors did not suppose that they accepted the offer merely by putting in their bids."

An offer may be binding as an option contract despite the fact that it only cites a purpported consideration, but no consideration has actually been given. T/F?

True

As a general rule, the creation of a contract requires both mutual assent and consideration. T/F?

True

In order for the so-called "firm offer rule" under the UCC to apply, the offeror must be a merchant. T/F?

True

Samuel Williston was the Reporter for the original Restatement of Contracts. T/F?

True

Section 45 does not apply where the offeree has only taken steps to prepare his performance. T/F?

True.

In Lonergan v. Scolnick, California District Court of Appeals came to the conclusion that the advertisement that the defendant had placed in the paper was a mere request for an offer. T/F?

True; Again the district court thought it was an offer, but rejected plaintiff's argument on the grounds that he didn't respond fast enough. While the App. court rejected plaintiff's argument on the grounds that there was never any final purpose offer.

As a general rule, the manifestation of assent required to form a contract can, but does not have to be, made by written or spoken words. T/F?

True; EX: going to a fast food restaurant and pointing at a #1 and completing the transaction w/o saying anything. In that case you're making a contract w/o words.

According to the CISG, an otherwise revocable offer cannot be revoked once an acceptance has been dispatched. T/F?

True; I guess at that point the contract has basically already been completed.

It is up to the offeror to specify how long his offer shall remain open. T/F?

True; Restatement Section 41 says the power of acceptance is terminated either within the time the offeror has allowed, or in a reasonable time. In either case, how long that is is determined by the offeror.

In case of doubt, the offeree can accept an offer either by performance or by promise, whichever he prefers. T/F?

True; See Restatement SS 32.

Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance. T/F?

True; See Restatement SS 62(1)

Under article 16 of the Convention of Contracts for the International Sale of Goods, if an offer states that it is irrevocable, then it cannot be revoked. T/F?

True; This is one of the cases in which offers are irrevocable under art. 16 of the CISG.

In James Baird Co. v. Gimbel Bros., the Court finds for the defendant on the ground that there is no contract and the doctrine of promissory estoppel does not apply. T/F?

True; Under the second restatement, this case has to be solved differently, though. Section 87 II could be applied.

In Longergan v. Scolnick, the plaintiff sought specific performance or damages in the event that specific performance was impossible. T/F?

True; Yeah, he wanted to first get the contract legitimized so he would get the land from the offer he paid money for, or else get damages in the amount of the money he lost by paying for the land he never got.

If the offeror prescribes a certain manner of acceptance, then, in order to constitute a valid acceptance, the acceptance has to comply with this prescription, even if the prescription is not reasonable. T/F?

True; Yep - see example about writing the acceptance in some crazy ass language. If that isn't done and it's requested, there's no contract.

Sometimes, the beginning of performance constitutes acceptance, and sometimes the beginning of performance creates an option contract. T/F?

True; in cases where an offer can only be accepted by rendering the whole performance, the beginning of performance creates an option contract under SS 45.

An offer can create a binding option contract despite the fact that the offeree has not yet manifested his assent. T/F?

True; the one where it's written down and consideration only has to be purported and assent is not necessary

A tells B: "Hi B, I hereby offer you $500 for washing my car." B starts washing A's car. But then B stops and refuses to continue because he has been offered a better-paid job elsewhere. Now A wants to sue B for breach of contract. Does A have a claim against B for breach of contract?

Yes; when B started to wash A's car, this operated as a promise to render the whole performance.