Contract Definitions Flashcards
Definiteness of terms: QTIPS
Reasonable person test
- Quantity
- Time for performance
- Identification of parties
- Price
- Subject matter
Offer can be freely terminated except if any of these 3 conditions have occurred
- Option contract
- Foreseeable detrimental reliance
- Unilateral contract
Acceptance
An unequivocal assent to the terms of an offer.
Offer
An outward manifestation of present contractual intent, definite and certain, and which is communicated to the offeree.
Is an advertisement an offer?
Majority: No, it is an invitation to deal.
Minority: Yes, if offer is definite and certain with nothing further to negotiate and gives a specific way which offeree may accept.
Option Contract-Terms
- Requires consideration
- Open for a reasonable time or time stated
- Majority: Even if no true consideration, offer is irrevocable for a reasonable time if it recites a purported or nominal consideration.
Detrimental Reliance
Requires reasonable foreseeable reliance on or forbearance.
Unilateral Contract
Acceptance by performance. Once performance begins, the offer must be kept open for a reasonable time.
4 ways an offer can terminate by operation of law
- Lapse of time. If offer states a time for acceptance, then offer will terminate at midnight on that date.
- Death/destruction of subject matter.
- Death/insanity of either party.
- Supervening illegality
Mailbox rule of acceptance
Majority: Effective upon dispatch. Contract formed whether it reaches offerer or not.
Exceptions to mailbox rule
- Option contract: Acceptance must reach offeror
- Unilateral contracts
- Where offeror provides a rule on how to accept (i.e. acceptance on upon receipt)
Acceptance by silence
General rule: Silence is not an acceptance.
Mirror image rule
Acceptance must be a mirror image. Otherwise it is a counter offer.
Mistake
A material misrepresentation of past or present fact, which goes to the essence of the contract.
Unilateral mistake
- If party knew or should have known about mistake, no contract.
- If party neither knew nor should have known, there is a contract.
Ambiguity
Terms of offer open to multiple interpretations.
- Where both parties had reason to know of ambiguity, no contract unless both parties gave same meaning to ambiguity.
- Where neither parties had reason to know, no contract unless both parties gave same meaning to ambiguity.
- Where one party had reason to know of ambiguity, the law will favor interpretation to uninformed and innocent party.
Consideration
Bargain made in exchange for legal detriment.
Liquidated debt v. Unliquidated debt
- Liquidated debt: Amount owed is certain.
- Unliquidated debt: Amount owed is uncertain.
Accord and Satisfaction
- An accord is an executory agreement intended to compromise and existing obligation.
- Satisfaction is the performance of that accord.
Pre-existing duty rule
Neither the promise to perform nor the performance of a pre-existing duty is consideration.
Modification
Mutual consent between the parties to alter/vary the terms of the original agreement.
Illusory promises
A promise where no obligation is imposed.
Statute of Frauds
- Promise in consideration of Marriage.
- Real Property.
- Debt of another
- Contracts not capable of being performed in one year.
- Goods over $500.
Promissory estoppel: Detrimental reliance rule
If a donative promise induces reliance by the promisee in a manner that the promisor should have reasonably expected, the promise is enforceable.
