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Bar Exam Outline

Law Outlines > Contracts Outlines

This is an extract of our Bar Exam document, which we sell as part of our Contracts Outlines collection written by the top tier of U.C. Berkeley School Of Law (Boalt Hall) students.

The following is a more accessble plain text extract of the PDF sample above, taken from our Contracts Outlines. Due to the challenges of extracting text from PDFs, it will have odd formatting:

CONTRACTS ONE SHEET FREQUENTLY TESTED TOPICS: formation of contracts, performance and breach OFFER AND ACCEPTANCE Offer = outward manifestation (oral, written, conduct), signal that acceptance will conclude deal.
? Commercial advertisement = invitation for an offer, except when language identifies who receives limited supply
? Auctions = invitation for an offer, except when held "without reserve."
? If open offer to multiple offerees and someone performs without knowing about the offer - not entitled to promise in the offer To Terminate Power of Acceptance
? Lapse - to determine reasonable time, consider market conditions, urgency, means of transmission.
? Death/incapacity
? Revocation: must be revoked before acceptance and communicated to offeree (okay if offeror takes action inconsistent with intention to continue sale and offeree learns from reliable source). o If multiple offerees: revoke in functionally equivalent way offer was made. Valid regardless of offeree's knowledge. o Dickinson v. Dodds - offeror can revoke regardless of express promise to keep offer open (absent consideration) o Prevented by: Option K, Firm Offer o Applied to Unilateral Ks
? Common law: offeror free to revoke up until moment of full completion
? Modern/Restatement: once offeree begins performance (not prep), option K is created and offeror may not revoke. (even court split)
? Rejection: Under common law: nonconforming acceptance is a rejection. Mirror image rule. Common Law Option Contract: underlying offer + promise to keep offer open + enforceability (consideration).
? Majority: false recital = rebuttable presumption of consideration
? Minority: false recital = irrebuttable presumption of consideration (K will be enforced)
? Promissory estoppel: sometimes courts will enforce subsidiary promise if there has been detrimental reliance
? Construction Ks: subcontractor's option K enforceable without consideration if general contractor relied on estimate in submitting bid UCC Firm Offer: Section 2-205. Merchant can make irrevocable offer without consideration when: 1) offer made by merchant; 2) offer made in writing, signed by merchant; and 3) offer expressly states by its terms that it will be held open.
? Offer remains open for term stated in K or reasonable time if not term stated. Offeree's negotations do not revoke the firm offer.
? Shelf life: 3 monts. If longer, need Common law option K Common Law Acceptance: 1) mirror terms of offer (de minimis variation may be okay, especially if contesting party brings it in bad faith to get out of the K); and 2) communicated to offeror (by means used/equivalent to means used by offeror, or customarily used in similar transactions) 1

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Acceptance by silence: when offeree takes benefits of offeror's services despite reasonable opportunity to reject and reason to know compensation expected; or offeror gives reason to understand that acceptance okay through silence (offeree must have intent to accept); previous dealings Unilateral: acceptance only through performance Mailbox rule: acceptance effective on dispatch if properly addressed. Offeror bound even if mail lost. Can K around.

UCC Acceptance: 1) promise to ship goods conforming to offer terms; 2) prompt shipment of goods conforming; 3) shipment of nonconforming goods (breach if no accommodation) UCC Battle of the Forms - 2-207
? Transaction w/ consumer: additional and different terms are mere proposals
? Transaction between merchants: o Additional terms automatically become part of K (unless express language in offer, offeror's prompt rejection, or material alternation); o Different terms: Majority = knockout rule; Minority = mere proposals for addition
? Written confirmation: because the K has already been formed, parties are bound, regardless of differing versions of written confirmation o If there's a non merchant, additional/different terms are mere proposals o If both merchants - additional are automatically added (unless prompt rejection or material alteration). Differing terms are mere proposals (unless both write confirmations - then knockout rule)
? Conditional Acceptance = made expressly conditional on assent to additional or different terms. Counter offer, not K. o Majority: Conditional acceptance even when located in boilerplate o Minority: Conditional acceptance must be clear communication to offeror that offeree is unwilling to proceed until offeror agrees.
? Ks formed through conduct (offer, conditional acceptance, no communication, seller ships, buyer accepts = writings do not form K, but conduct does) o Terms of K = common terms + UCC default terms
? Shrinkwrap: Majority = applies 2-207 so that terms are mere proposals; Minority = consumer accepts terms if she retains and uses goods CONSIDERATION AND PROMISSORY ESTOPPEL Consideration
? INSUFFICIENT CONSIDERATION = NO CONSIDERATION/ inadequate = bad deal o Promise to drop legal claim that bargainer knows to be invalid = INSUFFICIENT
? Illusory promise = leaves performance to discretion of promising party = not enforceable
? False recital = not enforceable (minority: enforceable in option K)
? Past or Moral Consideration: promise for something already given/performed not consideration. Exceptions: 1) written promise to pay debt barred by statute of limitations or after bankruptcy; 2) Modern, but minority - Material Benefit test (not to third party, not already K'd for) Promissory Estoppel = recoverable when: promise + foreseeable reliance + actual reliance + injustice without enforcement STATUTE OF FRAUDS 2

MYLEGS
? Year: measured from date of making K, not date beginning performance. Whether it's possible. If it takes longer than a year actually, it won't fall within the statute. If it was predicted to take longer than a year but actually takes less, it won't fall within the statute. Lifetime/permanent employment does not fall within statute because it's possible to die within year.
? Land: present conveyance of land for money, real estate brokerage agreement, (some jx) leases under a year ? fall outside of statute.
? Guaranty/Suretyship: exceptions = 1) creditor discharges original debt in reliance on third party's promise; 2) main purpose doctrine Common Law Writing Requirement
? Memo okay. Written offer okay. Signed by party K being enforced against.
? Required terms: identity of parties, nature and subject matter of K, essential terms of agreement (price, date of performance)
? Land - traditionally need legal description, modern jx allow address/reasonable description Performance to Satisfy SoF: only satisfies SoF in land Ks, one-year Ks, sale of goods
? Land: requires at least 2: payment of all/part of purchase price; taking possession; making substantial improvements
? One-year: if fully performed, oral K becomes enforceable
? Sale of goods: part performance okay UCC Statute of Frauds
? Only term required in writing: quantity (or requirement/output K, or express way of measuring quantity). Must afford basis for believing oral evidence rests on real transaction. (Check "for boat" =
okay).
? Written offer insufficient - because doesn't show that a K has actually been made. Exception: written firm offer enforceable against offeror.
? Merchant's confirmation okay, if sent within reasonable time of K formation. Recipient must sned written notice of objection within 10 days to keep SoF defense.
? Admitting Memorandum satisfies SoF against sender. So does in-court admission (only enforceable up to quantity admitted)
? Partial performance satisfies UCC SoF when good or payment sent and accepted. If K involves indivisible goods, partial performance renders K fully enforceable.
? Specially manufactured goods: SoF satisfied as long as: 1) goods specially made for buyer; 2) goods not suitable for sale to others in ordinary course of seller's business; 3) seller substantially began manufacture or made commitments related to manufacture before receiving buyer's revocation Promissory Estoppel
? Common Law o Always applies when party relies on other's promise to satisfy statute by drafting K o When reliance on substance of K only: slim majority = PE available if strong evidence of reliance; substantial minority = PE preempted by SoF
? UCC o Majority: PE available when strong evidence; Minority: PE preempted by SoF o Gen Ks always protected from Sub Ks 3

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