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D

Ex: I agree to pay you $2k on Feb 1.  We modify contract so I agree to pay you $1k on Jan 1.  There’s consideration there ($1k, one month), so no problem under legal duty rule.  But accord is unenforceable under executory accord rule

E

MODERN EXCEPTIONS to this rule:

1

Substituted contract — executory accord may be treated as a substituted contract, discharging the old one as soon as it is formed

a

Cts are likely to find substitute contract where:

i

Old duty was disputed, unliquidated, not matured, and involved perf other than money

ii

In contrast, cts will likely NOT find subst contract where old duty was undisputed, liquidated, matured, and involved payment of money

1

UNLESS B has taken on some add’l obligation, such as taking out a loan from a third party to pay off negotiated lower debt to A.  B’s taking out another loan constitutes consideration.  (Sugarhouse)

2

Where agr’t is an executory accord — NOT a substitute contract — accord has these effects:

a

Performance: If accord is satisfied (i.e., there is perf), B has complete defense against orig contract

b

Suspension of old contract: Executory accord SUSPENDS A’s rights under orig cont during period in which B is supposed to perform the accord

c

Suit by A under the accord: If B fails to tender perf under the executory accord, A can sue B under either the old contract or the accord

Offer & Acceptance Gen’y

I

How may acceptance be communicated?

A

Unless unambiguously specified, offer invites acceptance in manner r’ble under circums.  (Rest § 30(2)) (UCC § 2-206(1))

II

Instantaneous communication (e.g., face-to-face, phone)

A

Acceptance/revocation occurs upon RECEIPT (i.e., instantly)

III

Distance bargaining (e.g., mail)

A

If no period of time for acceptance specified, offeree must accept w/in r’ble time

B

Acceptance takes effect on dispatch.  (Rest § 63(a)) (MAILBOX RULE)

1

BUT acceptance under OPTION K takes effect upon RECEIPT.  (Rest § 63(b))

a

Some cts differ — option K acceptance takes effect upon dispatch

2

If period of time specified for acceptance

a

Clock starts running on RECEIPT of offer

b

Acceptance valid if DISPATCH occurs w/in time limit; receipt may occur beyond period

3

Offeree must take precautions to address properly, etc.  (Rest § 66)

a

If offeree doesn’t take precautions, acceptance effective on dispatch only if it arrives w/in time properly dispatched acceptance would have arrived.  (Rest § 67)

b

If acceptance arrives beyond r’ble time, it doesn’t take effect until it arrives

4

Late dispatch of acceptance is not valid acceptance, but is valid COUNTER-OFFER

C

Revocation and rejection effective upon receipt

1

This means acceptance trumps in crossing acceptance and revocation situation

D

Cal:

1

Acceptance effective on dispatch

2

Revocation effective on dispatch

IV

Crossing / countermanded rejection, acceptance

A

If offeree mails acceptance, then rejection, acceptance trumps b/c of mailbox rule

B

But if offeree mails rejection, then acceptance, acceptance will only trump if it arrives first.  If it arrives last, it is a counter-offer

8

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