Governing law of a K
- the common law governs a contract that deals with services or real estate
- the UCC governs a contract that deals with the sale of goods
Predominant purpose test
- the predominant purpose of the contract determines whether the common law or UCC governs.
- If the predominant purpose involves the purchase or sale of goods, the UCC applies.
- If the predominant purpose involves services or real estate, the common law applies
indivisible Ks and what law governs
- the UCC and common law cannot both govern one indivisible contract at the same time
- mixed contracts must fall into either UCC contracts or common law contracts
- there is a limited exception for divisible contracts, which divide the goods and services portions into separate mini-contracts
requirements to form a valid K
a traditional, enforceable contract is formed when there is
- mutual assent (a valid offer + acceptance)
- consideration (a bargained for legal detriment or promise)
- no defenses to formation that would invalidate the contract
Requirements to form a valid offer
to form a valid offer, the offeror must
- manifest an objective willingness to enter into the agreement; AND
- create a power of acceptance in the offeree
Objective test for offers
Offers are governed by an objective test, which means that outward apparances of words and actions are determinative, not subjective hidden intentions
requirement for specific offeree
- generally an offer must be directed toward a specific offeree
- however, there is a limited exception for contest offers and reward offers that promise something to anyone who completes a certain task
Required terms in a CL contract
Under the common law, all essential terms must be specified in the offer. Generally, this includes:
- the parties
- subject matter of the K
- quantity
- price
Requriements for terms in UCC offer
Under the UCC, only three terms are required under the UCC
- parties
- subject
- quantity
When is quantity not required in a UCC contract
- requirements and output contracts are valid under the UCC even though they do not specify an exact quantity
requirement K
in a requirement K, the seller agrees to sell as much as the buyer would require
output K
in an output K, the seller agrees to sell his entire production to the buyer
