Contract Law and Formation Flashcards

Under the mailbox rule, an acceptance transmitted by mail is effective at what point?

Answer: When it is properly dispatched by the offeree

The mailbox rule makes acceptance effective upon dispatch (dropping in the mailbox), not upon receipt by the offeror.

A contract formed under duress is best described as:

Answer: Voidable at the option of the coerced party

Duress renders a contract voidable, not void; only the coerced party may elect to affirm or rescind it.

Which doctrine prevents a party from using the statute of frauds as a defense when the other party has substantially performed in reliance on an oral contract?

Answer: Promissory estoppel

Promissory estoppel can bar the statute of frauds defense when injustice can only be avoided by enforcement of the oral promise.

An advertisement in a newspaper is generally treated as:

Answer: An invitation to make an offer

Advertisements are generally invitations to make offers, not offers themselves, because they lack specific quantity and addressee.

Which of the following is an example of an illusory promise that negates contract formation?

Answer: 'I will buy your car if I feel like it.'

A promise conditioned solely on the promisor's own whim or desire is illusory because it commits the promisor to nothing.

Under UCC Article 2, a contract for the sale of goods of $500 or more must generally be in writing under:

Answer: The statute of frauds

UCC § 2-201 requires a writing signed by the party to be charged for contracts involving goods of $500 or more.

Which element distinguishes a bilateral contract from a unilateral contract?

Answer: A bilateral contract is formed by an exchange of mutual promises

A bilateral contract is formed when two parties exchange promises to perform, whereas a unilateral contract is formed by performance in response to a promise.