Contract Basics

Question 1

contract definition

Answer 1

a promise or set of promises enforced by law

aka a legally enforceable agreement

MA(O+A) + C - D

Question 2

contract requirements

Answer 2

1. mutual assent
2. consideration
3. no defenses to formation

Question 3

mutual assent

Answer 3

(objective) a meeting of the minds
* valid offer and acceptance

Question 4

consideration

Answer 4

a bargained-for exchange of legal value between parties

Question 5

formation defense effect

Answer 5

if there is a valid defense to formation, the k may become
1. void
2. voidable
3. unenforceable

Question 6

void

Answer 6

k never had any legal effect

can NEVER be enforced

Question 8

voidable

Answer 8

one or both parties may elect to void the K

aggrieved party may still enforce

eg, infancy, mental incapacity

Question 9

unenforceable

Answer 9

otherwise valid k that is unenforceable b/c a defense applies

eg SoFs

Question 10

applicable laws

Answer 10

common law
OR
UCC Article 2

Question 11

UCC Article 2

Answer 11

governs sales of goods

Question 12

goods

Answer 12

any tangible, movable object

Question 13

common law

Answer 13

applies to everything other than goods

EX: real estate or services

Question 14

mixed ks

Answer 14

ks involving both goods and services

Question 15

predominant purpose test

Answer 15

for mixed ks, the predominant purpose of k dictates applilcable law

Question 16

predominant purpose exception

Answer 16

payments divided between goods and services
- apply UCC to goods part
- apply CL to remainder

Question 17

good faith

Answer 17

honesty in fact and the observance of reasonable commercial standards

Question 18

good faith duty

Answer 18

duty under both CL and UCC in both formation and enforcement

Question 19

fair dealing duty

Answer 19

just CL
NOT UCC

Question 20

breach of good faith

Answer 20

breaching party can be deprived of fruits of k

Question 21

express k

Answer 21

formed by language (written or oral)

Question 22

implied k

Answer 22

formed by conduct

eg, sitting in barber’s chair and getting haircut

Question 23

bilateral k

Answer 23

exhange of mutual promises

each party is promisor + promisee

Question 24

unilateral k

Answer 24

offer requires performance as the manner of acceptance

Question 25

magic words for unilateral k

Answer 25

“offer…ONLY BY”

includes reward offer
- lost dog
- prize or contest

Question 26

quasi-k

Answer 26

implied-in-fact k to avoid unjust enrichment
(last resort)

Question 27

unjust enrichment

Answer 27

1. P has conferred a benefit to D
2. P reasonably expects to be paid
3. D knowingly accepted the benefit, and
4. D will be unjustly enriched if P is NOT compensated

eg, emergency medical services

Question 28

unjust enrichment award

Answer 28

fair market value NOT k price

Question 29

merchant

Answer 29

1. one who regularly deals in goods of kind sold, or
2. holds themselves out as having special skill or knowledge as to practices of goods involved

NOTE: must be acting in merchant capacity

first one is standard for implied warranty for merchantability

Question 30

merchant exception

Answer 30

selling for solely personal purchases
eg, a hobby