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Questions and Answers
What is the primary focus of the UCC?
What is the primary focus of the UCC?
What do the provisions of the Restatement aim to generalize?
What do the provisions of the Restatement aim to generalize?
Which of the following elements is NOT necessary for a valid and binding contract?
Which of the following elements is NOT necessary for a valid and binding contract?
What does the term 'mutual assent' refer to in contract formation?
What does the term 'mutual assent' refer to in contract formation?
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Which section of the UCC includes provisions for acceptance?
Which section of the UCC includes provisions for acceptance?
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Under the Restatement, which of the following is required for mutual assent?
Under the Restatement, which of the following is required for mutual assent?
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Which of the following best describes the nature of the UCC?
Which of the following best describes the nature of the UCC?
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In the context of contracts, promissory estoppel is significant because it relates to which aspect?
In the context of contracts, promissory estoppel is significant because it relates to which aspect?
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What is essential for the formation of a contract according to the Objective Theory of Contract?
What is essential for the formation of a contract according to the Objective Theory of Contract?
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How does the concept of 'mutual assent' manifest according to the content provided?
How does the concept of 'mutual assent' manifest according to the content provided?
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Which statement best describes the role of intention in contract formation?
Which statement best describes the role of intention in contract formation?
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What does a Letter of Intent typically signify regarding a contract?
What does a Letter of Intent typically signify regarding a contract?
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What could prevent the formation of a contract despite a promise being made?
What could prevent the formation of a contract despite a promise being made?
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What is suggested about written documents in terms of contract negotiations?
What is suggested about written documents in terms of contract negotiations?
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Which of the following statements regarding contract formation is accurate?
Which of the following statements regarding contract formation is accurate?
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What is implied by R2K 21 regarding the intention of parties in a contract?
What is implied by R2K 21 regarding the intention of parties in a contract?
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What happens if a price is left for future agreement and is not set due to the fault of one party?
What happens if a price is left for future agreement and is not set due to the fault of one party?
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In an online contract, what factor indicates that a user is bound by the standard contract terms?
In an online contract, what factor indicates that a user is bound by the standard contract terms?
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Which clause describes a situation where nothing was said about price in a contract?
Which clause describes a situation where nothing was said about price in a contract?
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When may a price be fixed by the seller or buyer?
When may a price be fixed by the seller or buyer?
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What is the underlying principle if the parties do not act in good faith regarding price fixing?
What is the underlying principle if the parties do not act in good faith regarding price fixing?
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What is necessary for a user to show unambiguous assent in an online contract?
What is necessary for a user to show unambiguous assent in an online contract?
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Which of the following statements is true regarding a price set by an external objective standard?
Which of the following statements is true regarding a price set by an external objective standard?
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If a party is not at fault in failing to fix a price, what is their recourse?
If a party is not at fault in failing to fix a price, what is their recourse?
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What constitutes an offer according to R2K § 24?
What constitutes an offer according to R2K § 24?
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Which of the following statements is true regarding advertisements?
Which of the following statements is true regarding advertisements?
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Under what condition is a late acceptance treated according to R2K § 70?
Under what condition is a late acceptance treated according to R2K § 70?
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What is the effect of silence in relation to an offer according to R2K § 36?
What is the effect of silence in relation to an offer according to R2K § 36?
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What occurs under R2K § 41 when an offer specifies a duration?
What occurs under R2K § 41 when an offer specifies a duration?
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Which case exemplifies that an advertisement listing goods at a certain price is not an offer?
Which case exemplifies that an advertisement listing goods at a certain price is not an offer?
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In a unilateral contract, what type of acceptance is required?
In a unilateral contract, what type of acceptance is required?
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What is the outcome if an offer is rejected according to R2K § 38?
What is the outcome if an offer is rejected according to R2K § 38?
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What is required for consideration to be valid in a contract?
What is required for consideration to be valid in a contract?
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Under what condition can a pre-existing duty be considered valid consideration?
Under what condition can a pre-existing duty be considered valid consideration?
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In the context of illusory promises, when is a promise considered not to be valid consideration?
In the context of illusory promises, when is a promise considered not to be valid consideration?
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Which situation would allow modification of a contract without needing new consideration under UCC?
Which situation would allow modification of a contract without needing new consideration under UCC?
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When can past consideration be enforceable according to the Material Benefit Rule?
When can past consideration be enforceable according to the Material Benefit Rule?
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What must be true for a promise to be enforceable under promissory estoppel?
What must be true for a promise to be enforceable under promissory estoppel?
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Which of the following describes 'nominal consideration'?
Which of the following describes 'nominal consideration'?
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How does the common law view modification of contracts in comparison to the UCC?
How does the common law view modification of contracts in comparison to the UCC?
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Study Notes
Intent
- Courts use the Objective Theory of Contract, meaning they focus on how a reasonable person would interpret the parties' outward conduct, not their subjective intent.
- Manifestation of mutual assent requires each party to make a promise or begin performance.
- A party's true intention, even if different from their outward conduct, doesn't matter unless they clearly show they don't want the promise to have legal effect.
Letters of Intent
- Letters of Intent can sometimes be legally binding on limited terms but usually not for the entire deal.
- Courts will consider if the parties intended to be bound, looking for factors like:
- Whether price was discussed
- If price was left for future agreement and parties couldn't agree
- If price was to be set by an external standard and it didn't happen
- If parties acted in good faith
Online Contracts
- Users are bound by standard contract terms if they:
- Had a reasonable opportunity to review the terms, and
- Unambiguously manifested assent to the transaction.
Offer & Acceptance
- Preliminary Negotiations: The offeror must manifest an intention to be bound. Otherwise, it's just negotiation.
- Offer: A manifestation of willingness to enter into a bargain that justifies another person in understanding their assent is invited and will conclude the contract.
- Ads: Typically considered invitations to receive offers, not offers themselves.
- Offeree: Has the power to accept the offer.
- Unilateral Contract: Promise for an act (e.g., a reward for finding a lost dog).
- Bilateral Contract: Promise for a promise (e.g., a promise to sell a car for a promise to pay).
Duration of Offers
- Termination: Offers are terminated at the specified time, or after a reasonable time.
- Late or Defective Acceptance: Can operate as a counteroffer.
- Silence as Acceptance: Typically not acceptance, unless prior dealings or trade custom create that expectation.
Methods of Termination of Acceptance
- Rejection: Must be clear and unambiguous; boilerplate language subject to further agreement may not be enough.
- Counteroffer: Operates as a rejection and creates a new offer. Materially altering terms can lead to surprise or hardship.
- Lapse of Time: Offer lapses after a reasonable time.
- Revocation: Offeror can revoke an offer before accepted.
- Death or Incapacity: Of the offeror or offeree, terminates an offer.
Consideration
- A bargained-for exchange of legal value that is sought by the promisor and given by the promisee.
- Legal Value: Doesn't need to be market value, but there must be something of value that justifies the promise.
- Nominal Consideration: Not enough unless part of an option contract.
- Benefit-Detriment Test: Benefit to the promisor or detriment to the promisee.
- Illusory Promises: When the promisor reserves a choice of performances, without each alternative being valuable on its own or a substantial possibility of meaningful choices remaining.
Pre-Existing Duty Rule
- Performing a pre-existing duty is not consideration, unless it differs substantially from the original duty.
- Rule is being questioned in some jurisdictions.
Consideration for Modification
- Common Law: Requires new consideration or exceptions (statute, promissory estoppel, mutual agreement).
- UCC: No new consideration needed, but modifications must be made in good faith.
Past Consideration
- Majority Rule: A promise to pay for a benefit received in the past is unenforceable (moral obligation is not enough).
- Material Benefit Rule (Minority): A promise to pay for a past benefit is binding to prevent injustice, especially where the promisor received a material benefit.
Promissory Estoppel
- A promise that induces action or forbearance by the promisee is binding if injustice can be avoided only by enforcement.
- Promisor must reasonably expect the promise to induce action or forbearance.
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Description
Explore the principles of contract law including the Objective Theory of Contract, mutual assent, and the implications of Letters of Intent. This quiz will assess your understanding of how courts interpret outward conduct and the binding nature of online contracts.