Contracts Practice Quiz I

Explain the similarities and differences in contracts arising from shrinkwrap, clickwrap, and browsewrap. (See Knapp at 195-196)

"Shrinkwrap terms" are when a purchaser orders a product and receives physical possession, it is wrapped in plastic. The box it came in will have a warning of the seller's contract terms and that using the product constitutes an agreement to those terms. "Clickwrap terms" are when completing the purchase of a product requires the buyer to click on a button stating agreement of the terms. Often this comes with the additional step of scrolling through the seller's terms of sale before clicking the agreement button. "Browsewrap terms," on the other hand, usually involve information made available by internet providers on their websites often free of charge and sometimes involving info that the user has access to but does not always download. In this typical browseware transaction, the provider has posted the terms of use on its website, and it is stated that using the site is agreement to the terms.

Define "bilateral contract" and "unilateral contract". (See Restatement 2d of Contracts Sections 24 and 50)

A bilateral contract is an offer in which acceptance can be completed without further cooperation by the offeror (maybe?, s 45c). A unilateral contract is limited to cases where the offer is limited to acceptance by performance only (s 45a).

What is a "recital of consideration"? (See Knapp at 118 and 145)

A recital of consideration creates a "rebuttable presumption" of consideration that the opposing party would have to refute. The courts should ascertain whether there was actual consideration present.

Define "offer" and "acceptance". (See Restatement 2d of Contracts Sections 24 and 50)

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. Acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer. Acceptance by performance requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise. Acceptance by a promise requires that the offeree complete every act essential to the making of the promise.

In Dohrman v. Swaney, the Illinois Appellate Court held there was no contract because of insufficiency of consideration. Why did the court so hold?

In the case of Dohrmann v Swaney, the court found inadequate consideration in the agreement. Although the court does not like to rule often on the adequacy of the consideration in any given situation, it does find that in cases of gross inadequacy, it is right to deem it not enforceable.

What is the "objective theory of contract manifestation"? (See Knapp at 44)

Objective theory of contractual intent is a point of law that looked for a subjective intention on the part of the promisor. This theory considers the contract obligation by which one is ordinarily bound or not bound is not by any "secret intent" but by the reasonable interpretation of the words and actions. This approach to contract formation was a central tenet of classical contract law. Oliver Wendell Holmes was a proponent of this objective approach and felt that it offered both efficiency and fairness.

What is the scope of the United Nations Convention on Contracts for the International Sale of Goods? (See CISG Article 1.) Does the CISG apply to sales of consumer goods?

The (United Nations Convention on Contracts for the International Sale of Goods UNCISG) applies to the contracts of sale of goods between parties whose places of business are in different states, when the states are Contracting States or when the rules of private international law lead to the application of the law of a Contracting State. The fact that the parties have their places of business in different States is to be disregarded. This convention does not apply to consumer goods unless the seller was unaware that the goods were purchased for personal, family, or household use, unless the seller, at any time before or at the conclusion of the contract, neither knew nor ought to have known that the goods were bought for any such use.

What is the full name of the organization that drafts the Restatements of the Law? What is the purpose of the Restatements? How are they adopted by the states?

The American Law Institute drafts the Restatements of the law. The purpose is the preparation of restatements of law, which is purported to be accurate and authoritative summaries of the rules of common law in the various fields of law. Restatements resemble a statute, consisting of "black-letter" statements in the "general rule." Unlike a statute or court decision, the ALI Restatements are only secondary authority, without the force of "law." All or part of the UCC has been adopted in every state.

How does the Restatement 2d of Contracts define "contract"? "bargain"? "agreement"? (See Sections 1 and 3)

The Restatement 2d defines a contract as a promise or a set of promises for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. It defines a bargain as an agreement to exchange promises or to exchange a promise for a performance or to exchange performances. It defines an agreement as a manifestation of mutual assent on the part of two or more persons.

What is the basic triad and what are the three elements of the basic triad? (See Knapp at 101)

The basic elements of a contact are the requirement of agreement mutual assent and offer, acceptance, consideration. Judges have taken the approach that "A promise is not enforceable unless it is supported by consideration".

What are the three interests that contract remedies protect? (See Knapp at 59)

The conventional approach to contact enforcement is to award relief that will protect the plaintiff's "expectation interest," as in the net value that the plaintiff expected to realize from due performance of the contract at issue and that the defendants breach has denied. Contract remedies also attempt to protect "restitution" and "reliance" interests. The extent to which the defendant has been enriched by or the plaintiff has been injured by the plaintiff's actions in reliance on the defendant's commitment. The simplest form of relief to protect the plaintiff's expectation interest is to award "specific performance": ordering the defendant to cooperate with the plaintiff in exchanging performances as originally agreed upon. Sometimes, this "specific" relief is unavailable and the court will order monetary damages.

What are "mutual assent" and "manifestation of mutual assent" in the Restatement 2d of Contracts? (See Sections 17, 18, and 19)

The manifestation of a contract requires a bargain in which there is a manifestation of mutual assent to the exchange and a consideration. Whether or not there is a bargain, a contract may be formed under special rules applicable to formal contracts or under the rules stated. A manifestation of mutual assent to an exchange requires that each party either makes a promise or begins or renders a performance. This manifestation of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act. The conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents. The conduct of a party may manifest assent even though he does not in fact assent. In such cases a resulting contract may be voidable because of fraud, duress, mistake or other invalidating cause.

Define "consideration" (See Restatement 2d of Contracts Secs. 71 and 72)

To constitute consideration, a performance or a return promise must be bargained for. Consideration has also been used to refer to the elements of exchange without regard to legal consequences. It also refers to an element of exchange which is sufficient to satisfy the legal requirement for sufficient consideration.

What is the scope of Article 2 o the Uniform Commercial Code? (See UCC 2-102)

Unless the context otherwise requires, Article 2 of The Uniform Commercial Code applies to transactions in goods; it does not apply to any transaction which, although in the form of an unconditional contract to sell or present sale, is intended to operate only as a security transaction, nor does this Article impair or repeal any statute regulating sales to consumers, farmers or other specified classes of buyers.

Do you think that the electronic contracts in Question 14 create a bargain? An agreement?

Yes. It is a bargain.