Contract Formation Principles Flashcards

Karen advertises a reward of $200 for the return of her lost dog. Leo, unaware of the reward, finds and returns the dog. Can Leo claim the reward?

Answer: No, because he did not know about the offer when he performed.

A person who performs the requested act without knowledge of the reward offer cannot accept an offer they didn't know existed, so no contract is formed.

Mark and Nancy form a contract for the sale of Nancy's land. No price is stated. Under common law, this contract is:

Answer: Unenforceable because price is an essential term that must be agreed upon.

Under common law, a contract for the sale of land must include a price; without it, a material term is missing and the contract fails.

Oscar sends Patrice an offer by email. Patrice sends her rejection by email (received Monday) but then sends her acceptance by mail (dispatched Sunday). Which communication controls?

Answer: The rejection controls because it was received first.

When a rejection is received before an acceptance is received, the rejection controls, even if the acceptance was dispatched first.

Quinn, a contractor, begins building a deck for Rita based on preliminary discussions but before a formal contract is signed. Rita later refuses to pay. Quinn's best claim is:

Answer: Unjust enrichment or quasi-contract to recover the reasonable value of services.

Quasi-contract (unjust enrichment) allows recovery for the reasonable value of services when one party would be unjustly enriched by retaining benefits without paying.

Steve and Tracy agree that Steve will perform landscaping services 'for a fair price to be determined later.' A dispute arises. Under contract law, this agreement is:

Answer: Unenforceable as an agreement to agree, with no definite price term.

An 'agreement to agree' on an essential term like price is too indefinite to be enforceable under common law.

Under the UCC, when merchants exchange forms with different terms (the 'battle of the forms'), the general rule is:

Answer: A contract is formed and conflicting terms drop out, replaced by UCC gap-fillers.

Under UCC § 2-207, a contract is formed despite differing terms; conflicting terms cancel out and UCC gap-filler provisions apply.

Uma and Victor enter a contract that is legal when formed but becomes illegal due to a change in law before performance. The contract is:

Answer: Discharged because subsequent illegality makes performance impossible as a matter of law.

Subsequent illegality is a form of impossibility that discharges both parties' obligations under the contract.