Common Law Flashcards
Where only one of the parties entering into a contract is mistaken about facts relating to the agreement, the unilateral mistake will not prevent formation of a contract unless
the nonmistaken party is or had reason to be aware of the mistake made by the other party, in which case the contract is voidable.
An accord is
an agreement in which one party to an existing contract agrees to accept, in lieu of the performance that she is supposed to receive from the other party to the existing contract, some other, different performance.
Satisfaction is
the performance of the accord agreement.
Satisfaction discharges
the original contract and the accord contract.
If a monetary claim is uncertain or subject to a bona fide dispute, an accord and satisfaction maybe accomplished by
a good faith tender and acceptance of a check (or an accompanying document) conspicuously states that the check is tendered in full satisfaction of the debt.
The test of whether the reply is a counteroffer or inquiry is
whether a reasonable person would believe that the offer was being rejected.
elements of enforceable contract
- offer
- acceptance
- consideration
- no defenses to enforcement
option contract
a distinct contract where the offeree gives consideration for a promise by the offeror not to revoke an outstanding offer for a period of time (or if no period stated, a reasonable time)
methods of termination
- revocation by the offeror
- rejection (express or counteroffer)
- operation of law (death or insanity of party, destruction of subject matter, or supervening legal prohibition)
necessary contract terms
sales contract: quantity
real estate contract: identification of property and price
employment contract: duration
battle of the forms–inclusion of additional terms
If both parties are merchants, additional terms in acceptance included in contract unless:
-They materially alter original terms of offer (change risk or remedies available);
-Offer expressly limits acceptance to its terms; or
-Offeror has objected or objects within a reasonable time after notice received
If either party is not a merchant, additional terms treated as proposals to modify contract; they do not become party of contract unless expressly agreed to
Mirror Image Rule
At common law, must accept every term of the offer; any different or additional terms in acceptance make the response a rejection and counteroffer
Mailbox Rule
Acceptance by properly addressed and stamped mail or similar means (e.g., email) creates a contract at moment of dispatch, unless offer stipulates otherwise or an option contract is involved (effective on receipt)
promissory estoppel
Promise that is otherwise enforceable because it lacks consideration can be enforceable if necessary to prevent injustice provided:
- Promisor should reasonably expect to induce action or forbearance; AND
- Such action or forbearance is in fact induced
A condition precedent is one that
must occur before an absolute duty of immediate performance arises in the other party.
Rights of a third-party beneficiary vest when the beneficiary:
(i) manifests assent to the promise in a manner invited or requested by the parties; (ii) brings suit to enforce the promise; or (iii) materially changes position in justifiable reliance on the promise.
An agreement affecting a third-party beneficiary may be modified without the third party’s consent if
his rights have not yet vested.
Modern courts hold that a promise to forbear suit on a claim that the promisor _____________ believes to be valid is good consideration to support an agreement, even if the claim ultimately turns out not to be valid.
honestly and reasonably
Assuming nonoccurrence of event was basic assumption of parties and neither assumed risk, the following will discharge contractual duties:
- Impossibility: no one can perform the duties
- Impracticability: duties can be performed only with extreme and unreasonable difficulty or expense
- Frustration: duties can still be performed but performance of contract is valueless
When a sales contract provides that a seller may retain the buyer’s earnest money as liquidated damages, courts routinely uphold the seller’s retention of the money upon breach if
the amount appears reasonable in light of the seller’s anticipated and actual damages. Many courts uphold retention of earnest money of up to 10% of the sales price without inquiry into its reasonableness.
Where there is an oral ______________, evidence of the condition falls outside the parol evidence rule.
condition precedent
