1st midterm

Question 1

What is a “contract implied in law”?

Answer 1

Quasi-contract/unjust enrichment: represents an obligation imposed by law to avoid injustice, quasi-contract liability is imposed when one party confers a benefit on another who knowingly accepts it and retains it under circumstances that make it unjust to do so without paying for it

Question 2

What is a “contract implied in fact”?

Answer 2

Implied contract: When the surrounding facts and circumstances indicate that an agreement has been reached an implied contract has been created (Contains all elements of a contract (true contract) including a meeting of minds)

Question 3

Explain the concept of “promissory estoppel”

Answer 3

Used as a consideration substitute: it’s a noncontract doctrine which was developed to deal with the unfairness which would often times result from the strict application of traditional contract principles, its elements include:
-A promise, that the promisor should reasonably expect to induce reliance,
-Reliance on the promise by promisee,
-And injustice to the promisee as a result of that reliance

Question 4

Explain the concept of “non-contract obligations”

Answer 4

Circumstances in which the law enforces an obligation to pay for certain losses/benefits even in the absence of mutual agreement and exchange of value. Noncontract doctrines give a person who cannot establish the existence of a contract a chance to obtain compensation. Examples: quasi contract, promissory estoppel

Question 5

Explain the concept of “clickwrap contracts”

Answer 5

Requires website users to click on an “I agree” box after being presented with a list of terms and conditions to affirmatively acknowledge the agreement before proceeding with use of the website

Question 6

Explain the concept of “browsewrap contracts”

Answer 6

Presents purported contract, but doesn’t require website users to manifest assent to the terms and conditions expressly, instead they give their assent simply by using the website
-Enforcement of such agreements depends on whether user knew or had reason to know the terms and conditions

Question 7

What is consideration?

Answer 7

Legal value, bargained for and given in exchange for an act/promise, so a promise generally cannot be enforced against the person who made it (promisor) unless the person whom the promise was made (promisee) has given up something of legal value in exchange for the promise

Question 8

In case of a unilateral contract consideration can be an… and in case of a bilateral contract it can be a…

Answer 8

…Act, …Promise

Question 9

An act/promise as consideration has legal value, meaning…

Answer 9

-If, in exchange for the promisor’s promise, the promisee does/agrees to do sg. they had no prior legal duty to do, that provides legal value
-If, In exchange for the promisor’s promise, the promisee refrains from doing/agrees not to do sg. they have a legal right to do, that also provides legal value
-Doesn’t actually mean monetary value

Question 10

What is “adequacy of consideration”?

Answer 10

Legal value requirement is not concerned with actual value, because courts don’t concern themselves with questions regarding the adequacy of consideration that the promisee gave: as long as promisee’s act/promise satisfies the legal value test, courts don’t ask whether that act/promise was worth what the promisor gave/promised to give in return for it
-Reflects the laissez-faire assumption: freedom of contract includes the freedom to make bad bargains as well as good ones, so promisor’s promises are enforceable if they got what they asked for in exchange for their promise, even if what they asked for was not nearly as valuable as what they promised in return

Question 11

What was consideration back then?

Answer 11

During development of classical contract law (19th century): Concept of consideration distinguishes agreements that the law will enforce from gratuitous promises, which are normally unenforceable (only promises supported by consideration were enforceable)

Question 12

What is the definition of a contract?

Answer 12

-A legally enforceable promise/set of promises
-Voluntary agreement between 2 or more persons which creates a legally enforceable obligation
-An agreement with the intention to create legal relation with sufficient clarity for terms of agreement to be enforceable, in which there is no vitiating effects, consideration (unless other rules/statutes apply) under common law and in some cases various formal requirements which must be satisfied (written form/license)

Question 13

What is the difference between and ‘offer’ and an ‘invitation to treat’?

Answer 13

While an offer directly allows the other party to enter into a contract as soon as it is accepted, an invitation to treat mainly means an invitation to negotiate or that one party is willing to invite an offer: present intent is missing

Question 14

Explain the elements of acceptance

Answer 14

-Intention to accept: Present intent required on the part of the offeree, offeree must make sure that the terms of the offer are satisfied, however the master of the offer (offeror) may specify in detail what behaviour is required of offeree to bind them to contract
-Acceptance on the terms proposed by offeror: Acceptance must be a mirror image of the offer
-Communication to accept: In case of unilateral contract, offeree must perform required act, in case of bilateral contract, offeree makes the promise required by offer and communicates their intent to be bound by offer

Question 15

Explain the elements of offer

Answer 15

Intent: Present intent to enter a contract upon acceptance (offeror is not joking), judged by objective standard: if offeror is believed, -based on their words, acts, circumstances- to contract out of intent by offeree, intent requirement is satisfied
Specificity/Definiteness: States what the offeror is willing to do and what they ask in return of their performance
Communication: If offer has been communicated by offeror to offeree about their terms, they objectively indicate an intent to be bound by those terms

Question 16

What does it mean: Specificity of terms (offer and acceptance)

Answer 16

Formation of an agreement is a 2 step process, by which 1 person makes a proposal and the other person responds to the proposal
Offer: 1st step in the contract formation process, in which the person who makes the offer (offeror) gives the person whom they make the offer (offeree) the power to bind them to a contract simply by accepting the offer. It’s a proposal, which must have an objective indication of a present intent to contract by offeror, specificity/definiteness in terms of the offer and communication to offeree about the offer.
Acceptance: 2nd step in the contract formation process, which is a manifestation of assent to the terms of the offer made by offeree in the manner required by offer, which must have: offeree intended to enter contract, offeree accepted on terms accepted by offeror, offeree communicated their acceptance to offeror

Question 17

Explain “Mirror image rule”

Answer 17

An acceptance must be the mirror image of an offer: attempts by offeree to change the terms offer/add new ones are treated as counteroffers bc. They indicate an intent by offeree to reject offer instead of being bound by its terms (recently treated more liberally)

Question 18

What is a promise?

Answer 18

Expressed will of parties to perform an act/refrain from acting/make a payment or delivery. In contract law, if the parties exchange promises, each promise is consideration for the other promise. Not every promise is legally binding.

Question 19

When is a promise binding?

Answer 19

A promise -legally, an offer- if accepted by promisee will be binding legally too, not only morally: a contract is a legally binding promise. A binding promise must be obeyed/carried out. If one party has promised sg/given something in exchange for sg promised/given by other party or if a promise caused another party to rely on that statement in such a way that he or she is financially injured by that reliance

Question 20

Specificity of terms (2)

Answer 20

A proposal that fails to state specifically what the offeror is willing to do and what he expects in return for his performance is unlikely to be considered an offer
One reason for the requirement of definiteness is that specificity and definiteness in an offer tend to indicate an intent to contract, whereas indefiniteness and lack of specificity tend to indicate that the parties are still in negotiations and have not yet reached agreement
Second reason definiteness is important is that courts need to know the terms on which parties agreed in order to determine if breach of contract has occurred and calculate a remedy if it has