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The common law of contracts is what doing what?
the default law that governs K relations
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What are sales transactions according to the UCC?
transactions in which the S transfers title of goods to a B
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Sales are not what according to the UCC?
leases, bailments, or any other X short of a sale
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What are goods according to the UCC?
any moveable item
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What are examples of goods in the UCC that may not be readily apparent?
- (1) growing crops
- (2) uncut timber
- (3) unborn animals
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Goods do not include what according to the UCC?
- (1) intangibles
- (2) money
- (3) assignment of legal claim
- (4) services
- (5) real property
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What is a hybrid case?
a K which involves both the sale of goods and services
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What is the majority rule regarding hybrid cases and which source of K law to apply?
utilize the predominant purpose test
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What are the 2 sources of K law?
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What are the 3 factors used to determine the predominant purpose of a K?
- (1) language of the K
- (2) nature of the supplier's business
- (3) relative values of the goods versus the services
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What is the minority rule regarding which source of K law to apply in hybrid cases?
partition the K and apply the UCC to the goods poriton and the CL to the services portion
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Besides the case of a hybrid X, what is another hard case in deciding which source of K law to apply?
computer software
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What is the majority rule regarding which source of K law to apply in computer software cases?
treated as goods under the UCC
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Even in a sale of goods, the CL will apply to fill in the gaps of the UCC unless what?
the UCC provides contrary provisions
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What are some examples of CL filling in UCC gaps?
defenses such as fraud, duress, incapacity
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What are examples of the UCC displacing the CL?
firm offers & battle of the forms
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What are the 3 general categories of K obligations?
- (1) express
- (2) implied in fact
- (3) implied in law
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When are express K obligations found?
where the parties make oral and written expressions of their commitments
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What are implied in fact K obligations?
agreements formed by conduct rather than words
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When does an implied in law K obligation arise?
where one party bestows a benefit on another and it is unjust for the recipient to retain the benefit w/o paying
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What is the traditional definition of quantum meruit?
CoA for an implied in fact K brought to recover the reasonable value of the benefits provided
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What is the recent usage of quantum meruit?
courts have allowed this to be used in applied in law claims as well
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When dealing with electronic contracting, are electronic signatures legally effective?
yes in the vast majority of US jurisdictions
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In electronic contracting, do emails and the like satisfy the writing requirement?
yes
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What is the key question to be answered when dealing with the formation of a K and the communication volley?
at what point do the parties have a legally enforceable K?
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What are the 2 requirements that a party's communication must meet to constitute an offer?
- (1) outward manifestation
- (2) signal that acceptance will conclude the deal
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An offer is not about inward thoughts or subjective intentions unless what?
they are reasonably apparent to the other party
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Do communications that withold the privilege of further assent constitute an offer?
no
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What are 2 categories of communications that aren't offers because they w/hold the privilege of further assent?
- (1) preliminary negotiations
- (2) invitation for an offer
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When does a multiple offerees issue arise?
when a question involves a party's communication proposing a deal to 2 or more persons at the same time
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What are the 3 situtations in which a multiple offeree issues is likely to arise?
- (1) commercial advertisments
- (2) reward offers
- (3) Auctions
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What is the American advertising rule?
ads, catalogs and price lists are NOT offers but are instead invitations for offers
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What is the rationale for the rule that ads aren't offers but are instead invitations for offers?
b/c responses may exceed the available supply of goods/services
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What is the exception to the rule that ads aren't offers but are instead invitations to offers?
language that identifies who gets the limited supply of goods if there is an excess of demand
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What are the 2 types of reward offers?
- (1) self-limiting rewards
- (2) open field rewards
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What is a self-limiting reward?
offers that indicate that the task to be performed can only be performed once
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What is an open field reward?
offers that the task to be performed can potentially be performed by multiple parties
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What is an exception to the general rule that open field rewards can be performed by multiple parties?
when the language in the offer specifies a limitation on how many can accept the offer
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What is the general rule regarding auctions & offers?
the auctioneer is inviting offers and the responsive bids are the offers
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When is an auctioneer making an offer to sell to the highest bidder?
when the auction is held w/o reserve
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What is the legal effect of an offer, what does it create?
the power of acceptance in the offeree
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What are the 4 ways to terminate the power of acceptance?
- (1) lapse of time
- (2) death or incapacity
- (3) revocation by the offeror
- (4) rejection by the offeree
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When does an offer lapse?
after the time stated in the offer or if no time is stated then after a reasonable time
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The reasonable time determination of lapse is based on what 2 factors?
- (1) subject matter and market conditions
- (2) degree of urgency and means of transmission
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What is the face to face conversation rule regarding lapse of an offer?
an offer made in a face to face conversation generally lapses at the end of the conversation unless the OFR specifies otherwise
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What is the rule regarding termination by death or incapacity?
if either party dies or becomes mentally incompetent the power of acceptance is terminated
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What is the American rule of free revocability of offers?
OFR may revoke an offer at any time for any reason so long as 2 strict requirements are met
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What are the 2 requirements of the American rule of free revocability of offers?
- (1) must be revoked before the offer is accepted
- (2) revocation must be communicated to the OFE
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What constitutes direct revocation of an offer?
the OFR directly communicates to the OFE an intent to w/draw the offer
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What are the 2 requirements of an indirect revocation of an offer?
- (1) OFR takes some action that is inconsistent with the intention to go thru with the offer
- (2) OFE learns about such action from a reliable source
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What is the functional equivalents rule regarding the revocation of an offer made to multiple OFEs?
the OFR revokes by communicating the revocation in a functionally equivalent manner in which the offer was made
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What is the exceptoin to the functional equivalents rule dealing with revocation of an offer made to multiple OFEs?
if there is a better means to communicate the revocation that is reasonably available then those means must be used
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What is the legal effect of functionally equivalent revocation?
it terminates the power of acceptance even if the OFE is unaware of the revocation
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What is the rule of Dickinson v. Dodds?
OFR can revoke even if he expressly promised the OFE he would hold the offer open
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What are the 2 ways under contemporary law to prevent the revocation of an offer?
- (1) CL option K
- (2) firm offer under the UCC
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What are the elements of a CL option K?
- (1) an offer
- (2) subsidiary promise to keep that offer open
- (3) some valid mechanism for enforcing the subsidiary promise
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What is the most common way to enforce the subsidiary promise in a CL option K?
consideration
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What is the majority rule regarding a signed writing with false recital?
the recital is rebuttable
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What is the minority rule regarding a signed writing with false recital?
an option K will be enforced even if the recital of the consideration for the option is false
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When will courts use promissory estoppel to enforce a subsidiary promise to keep an offer open in a CL option K?
when there has been detrimental reliance
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What is the majority rule regarding construction K where a GC uses a particular SC's bid to formulate his own?
an implied option K is created via PE preventing the SC from revoking the bid despite the fact that the SC hasn't promised to keep the bid open and the GC hasn't provided any consideration to keep the bid open
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Under UCC 2-205 a merchant can make a firm offer to either buy or sell goods w/o consideration so long as what 3 conditions are met?
- (1) offer to buy or sell is made by a merchant
- (2) offer is made in a writing signed by the merchant
- (3) offer expressly states by its terms that it will be held open
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How long does a firm offer satisfying UCC 2-205 remain irrevocable?
for either the period of time stated in the firm offer or if no time is specified then for a reasonable time
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Under the UCC, the shelf life of a firm offer can be no longer than what?
3 months
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What is the result if a firm offer is for more than 3 months?
it is only irrevocable for the first three months
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What is required to make an offer for longer than 3 months a binding option K?
consideration
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What are the 3 ways rejection of an offer can be effected?
- (1) outright rejection
- (2) rejection via counteroffer
- (3) rejection via non-conforming acceptance
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What is the common law mirror image rule regarding acceptance of an offer?
the acceptance must mirror the terms of the offer and any variation results in a counteroffer and thus rejection of the offer
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How can an OFR revive a terminated offer?
by language or conduct restating the offer or giving the OFE more time to decide
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In a bilateral K I make a promise and seek what from you?
a promise in exchange
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When are both parties bound in a bilateral K?
once the promises are exchanged
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In a unilateral K I make a promise and seek what from you?
only your performance in exchange
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When the is OFR bound in a unilateral K?
only when the OFE's performance is completed
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When is the OFE bound in a unilateral K?
never
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Unless the terms of the offer state otherwise, the OFE can accept either by what?
promising or performing
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What is the CL rule regarding the revocation of an offer in a unilateral K?
the OFR was free to revoke the offer up until the moment the OFE actually completed performance
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What is the modern rule regarding revocation of an offer in a unilateral K?
Once the OFE begins performance an option is created and the OFR may not revoke
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Under the modern rule for revocation of an offer in a unilateral K, is the OFE free to abandon the performance at any time or not undertake performance at all?
yes
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Under the modern rule for revocation of an offer in a unilateral K, when is the acceptance of the offer effective?
upon the completion of hte performance in accordance with the terms of the offer
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Do mere preparations create an option K?
no, only the beginning of actual performance
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What are the 2 general requirements to constitute effective acceptance?
- (1) acceptance must mirror the terms of the offer
- (2) acceptance must be communicated to the OFR
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Unless the circumstances indicate otherwise, a means of transmission is reasonable for acceptance if it what?
- (1) is the means used by the OFR
- (2) is the means customarily used in similar Xs
- (3) is a means of communication that is equivalent in speed and reliability to the means used by the OFR
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What are the 3 exceptions to the requirement that acceptance be communicated?
- (1) acceptance by silence
- (2) acceptance by performance
- (3) mailbox rule
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What is the default rule regarding acceptance by silence?
OFE's silence in response to an offer does NOT constitute acceptance
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When does the acceptance by silence exception come into play?
- (1) OFE takes the benefit of the OFR services with reasonable opportunity to reject them and with reason to know that compensation was expected
- (2) OFR has given the OFE reason to understand that acceptance may be communicated by silence and the OFE's silence will operate as such if she so intends
- (3) b/c of previous dealings or other circumstances it is reasonable that the OFE should notify the OFR if he doesn't intend to accept
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What is the CL mailbox rule?
acceptance by mail is effective upon dispatch so long as the acceptance is properly posted
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Does the mailbox rule apply to any other communication other than acceptance?
no
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What are the 3 consequences of the mailbox rule?
- (1) OFR may not revoke an offer once acceptance has been dispatched
- (2) once the OFE dispatches his acceptance the parties have a binding K and the OFE may not w/draw his acceptance
- (3) OFR is bound even if the acceptance is lost in transit
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The mailbox rule applies to any means of transmission that involves what?
a foreseeable delay in dispatch and receipt
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The mailbox rule is the default rule unless what?
the offer provides otherwise
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What is the effect of simultaneously dispatched identical offers?
these offers are not legally relevant b/c offers are only effective to create the power of acceptance upon receipt
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What is the majority and restatement position regarding the mailbox rule and option K?
the mailbox rule doesn't apply and acceptance is ONLY effective upon receipt
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Does the mailbox rule apply to the situation in which a party dispatches both an acceptance and a rejection?
not if the rejection is mailed first
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In the situation where a party sends both an acceptance and a rejection, what happens if the acceptance reaches the OFR first?
there is a K by virtue of communicated acceptance
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In a sitaution where a party sends both an acceptance and a rejection, what happesn if the rejection reaches the OFR first?
there is no K and the power of acceptance has been terminated
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What are the 3 ways under the UCC that a S can accept a B offer to purchase goods for prompt or current shipment?
- (1) promise to ship goods in conformity with the terms of the offer
- (2) prompt or current shipment of the goods in conformity with the terms of the offer
- (3) shipping non-conforming goods
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When will the shipment of NCG not constitute acceptance under the UCC and instead constitute a counteroffer?
when the S notifies the B that the shipment is offered only as an accommodation
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If there is no accommodation, the S shipment of NCG does what 2 things at once?
- (1) accepts the offer forming a binding K
- (2) breaches the K
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When does the battle of the forms occur?
when the terms of the form used by the S don't match the terms of the form used by the B
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Regarding the battle of the forms, does it matter whether the B or the S is the OFR?
no the rules will apply regardless
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What 2 CL rules does the battle of the forms scenario implicate?
- (1) mirror image rule
- (2) last shot doctrine
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What is the UCC solution to the battle of the forms?
unless acceptance is expressly made conditional on assent to the additional or different terms, the nonconforming acceptance will operate as an effective acceptance of the offer, thus forming a K
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What are dickered terms?
X specific terms that identify the specific goods to be sold, the quantities, and the price
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What are boilerplate terms?
standard terms that appear in the parties respective forms and which are less likely to match
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If the X involves a consumer, what is the effect of additional or different terms?
they are mere proposals for addition and aren't part of the K unless the OFR expressly agrees to them
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If the X involves only merchants, what is the effect of the additional terms?
automatically become part of the K except in 3 circumstances
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What are the 3 instances in which additional terms don't automatically become part of the K b/t merchants?
- (1) offer expressly limits acceptance to its own terms
- (2) OFR objects to the additional terms w/in a reasonable time
- (3) additional terms would materially alter the K
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What is the definition of material alteration?
terms that result in surprise or hardship if incorporated w/o the express awareness of the other party
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What are 3 examples of clauses that would materially alter the K?
- (1) warranty disclaimers
- (2) clauses that materially shorten the deadline for raising complaints
- (3) clauses that change UoT or CoD
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What is the majority rule regarding the effect of different terms in a X involving merchants?
different terms of each communication dealing with the same topic are knocked out and omitted from the K
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What is the minority rule regarding the effect of different terms in a X involving merchants?
different terms of the acceptance will be treated as mere proposals for addition
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In transactions not between merchants what is the effect of different or additional terms in a written confirmation?
these are mere proposals for addition
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In X between merchants, additional terms in a written confirmation automatically become part of hte K unless what?
- (2) they materially alter the K; or
- (2) the receiving party objects to them w/in a reasonable time
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In X b/t merchants, different terms in a written confirmation are considered what?
mere proposals the parties are free to accept or reject
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What happens if both merchant parties send written confirmations containg conflicting terms?
the knock out rule applies and neither term is in the K
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If acceptance is made expressly conditional on assent to the additional or different terms, what is the effect of non-conforming acceptance?
it will not be effective to form the K and is a counteroffer
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According to the majority rule, what constitutes an conditional acceptance?
clear, conspicuous language that tracks the language of 2-207
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According to the minority rule, what constitutes a conditional acceptance?
a response that clearly communicates that the OFE is unwilling to proceed unless and until the OFR agrees to the new terms
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What is the UCC position on K formed by conduct?
parties' conduct in recognizing the existence of a K is sufficient to establish a K even though their writings don't otherwise establish a K
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If a K is established by conduct, what will the terms of the K be?
the terms on which the writings of the parties agree together with default terms provided by the UCC
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If a K is established by conduct, what happens to the express terms in the parties' communications that don't match or agree?
they are omitted
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Does 2-207 still apply to X even if there are no pre-printed forms?
yes
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If a court applies 2-207 to shrink wrap K, what is the rule they use?
in consumer X these terms are mere proposals that the B may accept or reject
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If a court doesn't apply 2-207 to shrink wrap K, what is the rule they use?
if the consumer retains and uses the goods they have accepted the offer on the merchant's terms
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