CONT 100 Restatement sections

Question 1

Section 1 Contract Defined

Answer 1

contract defined: a contract is a promise or set of promises for the breach of which the law gives a remedy, or performance of which the law in some way recognizes as a duty

Question 2

Section 2 Promise; Promisor; Promisee; Beneficiary

Answer 2

Promise: manifestation of intention to act or refrain from acting in a specifies way, so made as to justify a promisee in understanding that a commitment has been made
Promisor: the person manifesting the intention
Promisee: person to whom the manifestation is addressed
Beneficiary: person other than the promisee whom the performance will benefit

Question 3

section 17 Requirement of a bargain

Answer 3

(1) except as stated in (2), the formation of a bargain in which there is a manifestation of mutual assent to the exchange and a consideration.
(2) whether or not there is a bargain a contract may be formed under special rules applicable to formal contracts or under rules stated in sections 82-94

Question 4

section 71 Consideration: Requirement of exchange; types of exchange

Answer 4

(1) performance or promise must be bargained for to constitute consideration
(2) performance or return promise is bargained for if it is sought by promisor in exchange for their promise and is given by promisee in exchange for that promise
(3) performance may consist of: (a) an act other than a promise, (b) forbearance, or (c) the creation, modification, or destruction of a legal relation
(4) the performance or return promise may be given to the promisor or some other person. it may be given by the promisee or some other person

Question 5

section 79 Adequacy of Consideration; mutuality of obligation

Answer 5

if the requirement of consideration is met, there is no additional requirement of:

(a) a gain/advantage/benefit to the promisor or a loss/disadvantage/detriment to the promisee; or
(b) equivalence in the values exchanges; or
(c) “mutuality of obligation.”

Question 6

section 4 How a promise may be made

Answer 6

a promise may be stated in words either written or oral, or may be inferred wholly or partly from conduct.

Question 7

section 77 Illusory and Alternative Promises

Answer 7

a promise or apparent promise is not consideration if by its terms the promisor or purported promisor reserves a choice of alternative performance unless

(a) each of the alternative performances would have been consideration if it alone had been bargained for; or
(b) one of the alternative performances would have been consideration and there is or appears to the parties to be a substantial possibility that before the promisor exercises their choice events may eliminate the alternatives which would not have been consideration

Question 8

section 73 Performance of Legal Duty

Answer 8

performance of legal duty owed to promisor which is neither doubtful nor the subject of honest disputes is not consideration; but a similar performance is consideration if it differs from what was required by the duty in a way which reflects more than a pretense of a bargain

Question 9

section 74 Settlement of Claims

Answer 9

(1) forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless (a) the claim or defense is in fact doubtful bc of uncertainty as to the facts of the law, or (b) the forbearing or surrendering party believes that the claim or defense may be fairly determined to be valid.
(2) the execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is consideration if the execution of the written instrument is bargained for even though he is not asserting the claim or defense and believes that no valid claim or defense exists.

Question 10

section 89 Modification of Executory Contract

Answer 10

a promise modifying a duty under a contract not fully performed on either side is binding:

(a) if the modification is fair and equitable in view of the circumstances not anticipated by the parties when the contract was made; or,
(b) to the extent provided by statute; or,
(c) to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

Question 11

section 90 Promise Reasonably Inducing Action or Forbearance

Answer 11

(1) a promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or third person and which does induce such action or forbearance is binding if injustice can only be avoided by enforcement of the promise. the remedy granted for breach may be limited as justice requires
(2) a charitable subscription or a marriage settlement is binding under (1) w/o proof that the promise induced action or forbearance.

Question 12

section 12 Capacity to Contract

Answer 12

(1) No one can be bound by contract who has not legal capacity to incur at least voidable contractual duties. Capacity to contract may be partial and its existence in respect of a particular transaction may depend upon the nature of the transaction or upon other circumstances.
(2) a natural person who manifests assent to a transaction has full legal capacity to incur contractual duties thereby unless they are (a) under guardianship, (b) an infant, (c) mentally ill or defective, or (d) intoxicated.

Question 13

section 82 Promise to Pay Indebtedness; Effect on the Statute of Limitations

Answer 13

(1) A promise to pay all or part of an antecedent contractual or quasi-contractual indebtedness owed by the promisor is binding if the indebtedness is still enforceable or would be except for the effect of a statute of limitations.
(2) The following facts operate as such a promise unless other facts indicate a different intention:
(a) a voluntary acknowledgment to the obligee, admitting the present existence of the antecedent indebtedness; or
(b) a voluntary transfer of money, a negotiable instrument, or other thing by the obligor to the obligee, made as interest on or part payment of or collateral security for the antecedent indebtedness; or
(c) a statement to the obligee that the statute of limitations will not be pleaded as a defense

Question 14

section 86 Promise for Benefit Received

Answer 14

(1) a promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice.
(2) A promise is not binding under (1)
(a) if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched; or,
(b) to the extent that its value is disproportionate to the benefit

Question 15

section 18 Manifestation of Mutual Assent

Answer 15

manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance

Question 16

section 22 Mode of Assent: Offer and Acceptance

Answer 16

(1) the manifestation of mutual assent to an exchange ordinarily takes the form of an offer or proposal by one party followed by an acceptance by the other party or parties.
(2) a manifestation of mutual assent may be made even though neither offer nor acceptance can be identified and even though the moment of formation cannot be determined.

Question 17

section 24 Offer Defined

Answer 17

an offer is the manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it

Question 18

section 50 Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise

Answer 18

(1) Acceptance of an offer: a manifestation of assent to the terms made by the offeree in a manner invited or required by the offer.
(2) Acceptance by performance: requires that at least part of what the offer requests be performed or tendered and includes acceptance by a performance which operates as a return promise.
(3) Acceptance by a promise: requires that the offeree complete every act essential to the making of the promise.

Question 19

section 36 Methods of Termination of the Power of Acceptance

Answer 19

(1) An offeree’s power of acceptance may be terminated by (a) rejection or counter-offer by the offeree, (b) lapse of time, (c) revocation by the offeror, (d) death or incapacity of the offeror or offeree.
(2) In addition, an offeree’s power of acceptance is terminated by the non-occurrence of any condition of acceptance under the terms of the offer.

Question 20

section 37 Termination of Power of Acceptance Under Option Contract

Answer 20

Notwithstanding §§ 38-49, the power of acceptance under an option contract is not terminated by rejection or counter-offer, by revocation, or by death or incapacity of the offeror, unless the requirements are met for the discharge of a contractual duty.

Question 21

section 38 Rejection

Answer 21

(1) An offeree’s power of acceptance is terminated by their rejection of the offer, unless the offeror has manifested a contrary intention.
(2) A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement.

Question 22

section 39 Counter-Offers

Answer 22

(1) A counter-offer is made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer.
(2) An offeree’s power of acceptance is terminated by his making of a counter-offer, unless the offeror has manifested a contrary intention or unless the counter-offer manifests a contrary intention of the offeree.

Question 23

section 40 Time When Rejection or Counter-Offer Terminates the Power of Acceptance

Answer 23

Rejection or counter-offer by mail or telegram does not terminate the power of acceptance until it is received by the offeror, but limits the power so that a letter or telegram of acceptances started after the sending of an otherwise effective rejection or counter-offer is only a counter-offer unless the acceptance is received by the offeror before he receives the rejection or counter offer.

Question 24

section 42 Revocation by Communication from Offeror Received by Offeree

Answer 24

An offeree’s power of acceptance is terminated when the offeree receives from the offeror a manifestation of an intention not to enter into the proposed contract.

Question 25

section 43 Indirect Communication of Revocation

Answer 25

An offeree’s power of acceptance is terminated when the offeror takes definite action inconsistent with an intention to enter into the proposed contract and the offeree acquires reliable information to that effect.

Question 26

section 63 Time when Acceptance Takes Effect

Answer 26

Unless the offer provides otherwise,

(a) an acceptance made in a manner and by a medium invited by an offer is operative and completes the manifestation of mutual assent as soon as put out of the offeree’s possession, without regard to whether it ever reaches the offeror; but
(b) an acceptance under an option contract is not operative until received by the offeror.

Question 27

section 87 Option Contract

Answer 27

(1) an offer is binding as an option contract if it (a) is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or (b) is made irrevocable by statute.
(2) an offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.

Question 28

section 32 Invitation of Promise or Performance

Answer 28

In case of doubt an offer is interpreted as inviting the offeree to accept either by promising to perform what offeror requests or by rendering the performance, as the offeree chooses.

Question 29

section 45 Option Contract Created by Part Performance or Tender

Answer 29

(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders the beginning of it.
(2) the offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer.

Question 30

section 62 Effect of Performance by Offeree Where Offer Invites Either Performance or Promise

Answer 30

(1) where an offer invites an offeree to choose b/w acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance.
(2) such an acceptance operates as a promise to render complete performance.

Question 31

section 211 Standardized Agreements

Answer 31

(1) except as stated in (3), where a party to an agreement signs or otherwise manifests assent to a writing and has reason to believe that like writings are regularly used to embody terms of agreements of the same type, he adopts the writing as an integrated agreement with respect to the terms included in the writing.
(2) such a writing is interpreted wherever reasonable as treating alike all those similarly situated, without regard to their knowledge or understanding of the standard terms of the writing.
(3) where the other party has reason to believe that the party manifesting such assent would not do so if he knew that the writing contained a particular term, the term is not part of the agreement

Question 32

section 201 Whose Meaning Prevails

Answer 32

(1) where the parties have attached the same meaning to a promise or agreement or a term thereof, it is interpreted in accordance with that meaning.
(2) where the parties have attached different meanings to a promise or agreement or a term thereof, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made (a) that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party; or (b) that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by that first party.
(3) except as stated in this section, neither party is bound by the meaning attached by the other, even though the result may be a failure of mutual assent.

Question 33

section 202 Rules in Aid of Interpretation

Answer 33

(1) Words and other conduct are interpreted in the light of all the circumstances, and if the principal purpose of the parties is ascertainable it is given great weight.
(2) a writing is interpreted as a whole, and all writings that are part of the same transaction are interpreted together.
(3) unless a different intention is manifested, (a) where language has a generally prevailing meaning, it is interpreted in accordance with that meaning; (b) technical terms and words are given their technical meaning when used in a transaction w/i their technical field
(4) where an agreement involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection is give great weight in the interpretation of the agreement
(5) wherever reasonable, the manifestations of intention of the parties to a promise or agreement are interpreted as consistent with each other and with any relevant course of performance, course of dealing, or usage of trade.

Question 34

section 203 Standards of preference in interpretation

Answer 34

in the interpretation of a promise or agreement or a term thereof, the following standards of preference are generally applicable:

(a) an interpretation which gives a reasonable, lawful, and effective meaning to all the terms is preferred to an interpretation which leaves a part unreasonable, unlawful, or of no effect;
(b) order of weight given (greatest to least) – express terms–>course of performance–>course of dealing–>usage of trade;
(c) specific terms and exact terms are given greater weight than general language;
(d) separately negotiated or added terms are given greater weight than standardized terms or other terms not separately negotiated.

Question 35

section 18: manifestation of mutual assent

Answer 35

manifestation of mutual assent to an exchange requires that each party either make a promise or begin or render a performance

Question 36

section 19 conduct as manifestation of assent

Answer 36

(1) the manifestation of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act
(2) the conduct of a party is not effective as a manifestation of their assent unless they intend to engage in the conduct and knows or has reason to know that the other party may infer from their conduct that they assent
(3) the conduct of a party may manifest assent even though they do not in fact assent. in such cases a resulting contract may be voidable because of fraud, duress, mistake, or other invalidating causes

Question 37

section 20 effect of misunderstanding

Answer 37

(1) there is no manifestation of mutual assent to an exchange if the parties attach materially different meanings to their manifestations and (a) neither party knows or has reason to know the meaning attached by the other; or (b) each party knows or has reason to know the meaning attached by the other.
(2) the manifestations of the parties are operative in accordance with the meaning attached to them by one of the parties if (a) that party does not know of any different meaning attached by the first party; or (b) that other party has no reason to know of any different meaning attached by the other, and the other has reason to know the meaning attached by the first party.