Contract Law Flashcards
What is the difference between a unilateral and bilateral contract?
A unilateral contract seeks a single promise make by the offeror to the offer, which seeks performance from the offeree rather than a promise. A Bilateral contract is a promise for a promise.
A bilateral contract may be created by either _____ or _____
mutual promises or the start of the performance
When we say a contract is express, implied or quasi what are we referring to?
The way the contract was formed, not the enforceability
What is an express contract?
One formed by specific words, either oral or written.
What is an implied contract?
Formed by an indication other than specific words, such as by conduct. Sometimes called a contract “implied in fact”
What is a quasi-contract?
Not a contract in any technical sense. created by courts to prevent unjust enrichments of a defendant by allowing the plaintiff to seek restitution of a benefit conferred upon the defendant. Sometimes called contract “implied in law.”
What does the term “void contract” mean?
Contract that had no legal effect and was invalid from the start. Not a contract at all.
What is a “voidable contract”?
One that one or both parties may choose to avoid or may ratify. (i.e. contracts involving a minor)
What is an unenforceable contract?
One that cannot be enforced because of defenses to the contract, none of which relate to its formation. (i.e. statute of frauds, statute of limitations, unconscionability, etc.)
What is the difference between an “Executory” contract and an “Executed” Contract?
An executory contract is one where one party still has a duty or obligation to be done. An Executed contract is one in which both parties have fully performed their obligations and duties.
What are the 3 things needed to form a valid, enforceable contract?
1) Mutual Assent
2) Consideration
3) Absence of defenses that would prevent enforcement
Mutual Assent is often called ______?
Meeting of the Minds
What are the 2 things that Mutual Assent require?
Offer and Acceptance
What would not be considered a valid offer?
1) Statements made in jest or anger
2) Advertisement –> considered an invitation to make an offer. The exception is a store that lists a specific item for a specific price on a 1st come 1st served basis
3) Auctions –> Considered a solicitation for offers. The exception is when the auction is conducted without reserve
4) Invitation to bid
What are considered the essential terms of an offer?
1) identity of the offeree
2) subject matter
3) price to be paid
4) time of the payment, delivery, or performance
5) The quantity involved
6) The nature of the work or performance required.
How can termination of an offer occur?
1) Revocation
2) Rejection
3) Lapse of Time
4) Termination by Operation of Law
What are the limitation on Revocation powers?
1) Option –> Independant contract in which offereor receives a separate consideration from the offeree to keep an offer open for a stated period of time.
2) U.C.C. Firm Offer
3) Detrimental Reliance
4) Part performance of a Unilateral Contract
What is the key difference between a counteroffer and a mere inquiry?
A counteroffer constitutes a rejection
What is the difference between the Common Law Rule regarding additional terms in the acceptance and the U.C.C.?
Under common law rules, different or additional terms in the acceptance make the response a rejection and a counteroffer. Under the UCC it does not; a contract is formed subject to certain limitations
Acceptance by mail or similar medium creates a contract when?
At the moment of posting, properly addressed and stamped. A contract is formed if the acceptance is sent before the revocation is received.
What are the 2 situations where an executory bilateral contract may be formed without communication of acceptance?
1) Express Waiver
2) Silence as Acceptance
What are the 2 requirements for consideration?
1) There must be a bargained-for exchange between the parties.
2) THe bargained-for exchange must provide some benefit to the promisor or must provide some detriment to the promisee (Legal value)
Does a Past consideration or Moral obligation qualify as “Bargained-for”
No
Will Courts inquire into the adequacy of consideration?
as a general rule, no
Define Token?
Entirely Without value; consideration is held insufficient and indicates a gift rather than bargained-for consideration
Is a promise to perform a preexisting legal duty considered valid consideration?
NO
What are Requirements and Output Contracts?
They are both Enforceable. The Requirements contract is a promise to buy all that I require, and a Output contract is a promise to sell all that I produce.
Are Conditional Promises enforceable?
Yes, unless the “condition” is entirely within the promiser’s control
What is the statute of frauds
states that contracts for goods valued at $500 or more must be in writing.
What are considered substitutes for Consideration?
1) Promises under seal (UCC has eliminated the seal as consideration for sales contracts)
2) Promises in Writing
3) Promises to pay obligations barred by law
4) Promissory Estoppel
What must the promisee be able to show to enforce a claim of promissory estoppel?
1) The promisor reasonably should have expected to induce action or forbearance on the part of the promisee.
2) Of definite and substantial character
3) Action or forbearance occurs
Contract defenses based on lack of capacity involve one of three types of incapacity:
1) minority
2) mental incapacity
3) intoxication
These are VOIDABLE
When might a minor not be able to avoid a contract?
If they misrepresent their age or if the contract provides the minor with necessities of life
What are the 4 general categories for lack of consent?
1) Duress
2) undue influence
3) Misrepresentation
4) Fraud
Threat of ____ prosecution consitutes duress
Criminal
Define Misrepresentation
The innocent or negligent missatement of a material fact made by one party and relied upon by the other party as a basis for entering into an agreement to his or her damage.
Fraud requires what?
Scienter (knowledge/awareness)
Mutual Mistakes are sometimes called ______
Latent ambiguity
What are the 2 criteria that judges use to determine unconscionability?
1) Hidden, Risk-Shifting provisions
2) Adhesion Contracts –> Those that contain unconscionable provisions concerning procurement of necessary goods when the buyer is unable to purchase similar items from any seller without agreeing to a similar provision.
What falls under the statute of frauds?
1) Executor/administrator agreements
2) Debts of another
3) In consideration of Marriage
4) Interest in Land (Real estate, mortgage, etc.)
5) Contracts which cannot be performed within 1 year (Date of the agreement)
6) Goods priced at $500 or more
In 3rd party beneficiary contracts who can and can’t recover?
The intended beneficiary CAN Recover and the incidental beneficiary CAN NOT recover.
What is the parol evidence rule?
Rule of substantive contract law. Any other expressions oral or written, made prior to or contemporaneous with the writing are inadmissible to vary the terms of the writing.
