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BULE 302 - Final Exam > Contract Law > Flashcards

Contract Law Flashcards

1
Q

Contract enforceability

A
  • Valid
    • Agreement
    • Consideration
    • Contractual capacity
    • Legality
  • Voidable (unenforceable)
    • Valid contract can be avoided or rescinded
    • Example: contract with a minor
  • Void
    • No contract
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2
Q

Agreement

A
  • Agreement = Offer and Acceptance
  • Once an agreement is reached,
    • if the other elements of a contract are present,
    • a valid contract is formed
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3
Q

Cat adoption contract

A
  • Julie doesn’t like the format of this contract
  • The Lost Dog & Cat Rescue Foundation
  • Has all the identifying information at the top
  • Gives the contract a name: Cat Adoption Contract
  • Two parties
    • Lost Dog foundation
    • Adopting Party
  • Topic or point of the contract: Cat adoption
  • Specifics over the content of the contract
    • Need to describe all in detail
    • Language should be precise
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4
Q

Cat adoption contract:

Paragraph 6

A
  • Condition subsequent
  • Agree not to declaw the cat
  • Julie is not sure that this is an enforceable provision
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5
Q

Cat adoption contract:

Paragraph 7

A
  • Julie does not like this provision
  • If not already spayed/neutered, then adopting party should do it
  • Changes from a condition precedent to a condition subsequent
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6
Q

Condition precedent

A
  • before the contract
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7
Q

Condition concurrent

A
  • along with the contract
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8
Q

Condition subsequent

A
  • after the contract is executed
  • example:
    • job contract for after law school
    • must graduate and pass bar or contract is voided
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9
Q

Requirements of the Offer

A
  • Offeror’s serious intention
  • Definiteness of terms
  • Communication
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10
Q

Can you write a contract on a napkin?

A
  • Yes
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11
Q

Lucy v. Zehmer case

basic

A
  • August 18, 1953 ???
  • Lucy is the buyer
  • Zehmer is the owner and seller of the property
  • Ferguson Farm is the property
  • Supreme Court of Virginia
  • In trial court, Lucy lost the case, but Supreme Court of Virginia reversed their decision (Lucy won)
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12
Q

Lucy v. Zehmer case

details

A
  • Lucy was a lumberman and farmer
  • Lucy knew Zehmer for 15 years
  • December 20
  • Zehmer operated a restaurant, filling station, and motor court
  • Lucy attempted to buy the Ferguson Farm
  • “I bet you wouldn’t take $50,000 for that place”—Lucy
  • Wrote agreement on the back of a restaurant check
  • Re-wrote agreement to include Mrs. Zehmer
  • Lucy offered $5, but Zehmer declined the down payment
  • “You haven’t got $50,000 in cash.”—Zehmer
  • Mrs. Zehmer said “It’s nothing but a joke.”
  • Zehmer refused to sell farm to Lucy
  • “High as a Georgia pine.” “Nothing but a couple of drunks…”
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13
Q

Lucy v. Zehmer case

ruling

A
  • Supreme Court of Virginia determined that there was serious intent and that is was a valid contract
    • In the field of contracts, we must look to the outward expression of a person, rather than at his secret, hidden intention
    • At no time prior to the execution of the contract did Zehmer indicated that he was joking about the execution of the contract
    • Whether it was in jest or not, it was still a valid contract
    • Awarded specific performance of the contract – must actually sell farm to Lucy, not merely monetary damages
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14
Q

Offeror’s Serious Intention

A

NOT OFFERS:

  • Offers made in anger, jest, or undue excitement
  • Expressions of **opinions **
  • Statements of intention or **preliminary negotiations **
  • Advertisements, catalogs, price lists, and auctions
    • treated as invitations to negotiate
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15
Q

Definiteness of terms (expressed or implied)

A
  • Identification of parties
  • Object or subject matter of the contract
  • Consideration to be paid
  • Time of payment, delivery, or performance
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16
Q

Communication

A
  • An offer must be communicated
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17
Q

Termination of the offer

A
  • By the offeror
  • By the offeree
  • By operation of law (NOT TESTABLE)
    • lapse of time
    • destruction of property
    • death or incompetence
    • supervening illegality
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18
Q

Three ways to terminate an offer

A
  • Revocation – by the offeror
  • Rejection – by the offeree
  • Counteroffer – by the offeree
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19
Q

Revocation

A
  • Must be communicated
  • must express repudiation
    • “I revoke the offer”
  • Acts inconsistent with offer
  • Do it before the offer is accepted
20
Q

Rejection

A
  • Done by offeree
  • rejected = terminated
  • effective when rejection is received by offeror
21
Q

Counteroffer

A
  • offeree simultaneously
    • rejects the offer
    • makes a new offer
22
Q

Mirror Image Rule

A
  • Requires that the terms of the offeree’s acceptance to match exactly the offeror’s offer for a valid contract to be formed
  • Common law rule
  • Very strict; must match 100%
  • Julie says “mirror image rule is the old rule, but isn’t always going to be followed”
23
Q

Acceptance

A
  • voluntary act by the offeree that shows
    • assent, or agreement, to the terms of an offer
    • may consist of words or conduct
  • Unequivocal acceptance
    • mirror image rule
  • Communication of acceptance
    • bilateral contracts
    • unilateral contracts
  • Mode and timeliness
    • mailbox rule
  • Technology and acceptance rules
24
Q

Mailbox Rule

A
  • mode and timeliness of acceptance
  • Acceptance is effective on dispatch, providing that authorized means of communication is used
  • Offeror specifies (expressly or impliedly) how acceptance should be made
  • Effective if properly dispatched (mailed, shipped)
25
Q

consideration

A
  • Usually, its all about the $$$$$
  • Value in exchange for a promise
  • Legal benefit received by one person
    • and legal detriment to another person
  • Must be something of legally sufficient value
  • must be a bargain for exchange
  • If you lack consideration, you are not going to have a valid contract
  • Courts don’t like to get involved with consideration
26
Q

roots of consideration

A
  • Roots in Roman law
  • Concept of causa
  • Must have both
    • a reason for making a promise
    • sufficient reason for enforcing a promise
  • Without causa, there is no promise
27
Q

consideration as forbearance

A
  • Sometimes legally sufficient value can come from forbearance
    • (not doing something)
  • Sidway case (uncle/nephew case)
    • Uncle told his nephew that he would give him $5000 if he didn’t drink, use tobacco, or gamble until he was 21
    • Uncle died and estate said they were not going to pay him, claimed no consideration
    • Court ruled was consideration because of what he had given up
28
Q

capacity

A
  • Minors
  • Intoxication
  • Mental incompetence
29
Q

legality

A
  • Is the contract formed for a legal purpose?
  • Can I contract to buy cocaine?—NO
  • Can I enter into a contract to hire a hit man?—NO
30
Q

Contracts contrary to public policy

A
  • Covenants not to compete
  • Exculpatory clauses
    • Limiting liability
31
Q

Statute of Frauds

A
  • State statutes that require certain types of contracts to be in writing
    • Land
    • If contract terms cannot be performed within one year from contract formation
    • Promises made in consideration of marriage
    • (there are others—not testable)
32
Q

Contract remedies

A
  • Law
  • Equity
    • Rescission
    • Restitution
  • Specific performance
    • Reformation
33
Q

Performance and discharge

A
  • A party may be discharged from a valid contract by
    • full performance or material breach by the other party
    • a condition occurring or not occurring
    • agreement of the parties
    • operation of law
34
Q

Conditions

A
  • Possible future event, the occurrence or nonoccurrence of which will trigger…
    • the performance of a legal obligation or…
    • terminate an existing obligation…
    • …under a contract
  • Types:
    • Conditions precedent
    • Conditions concurrent
    • Conditions subsequent
35
Q

Discharge by performance

A
  • The contract comes to an end by…
  • Complete performance
    • strict performance
  • Substantial performance
    • performance does not vary greatly and creates substantial benefit
    • other party must pay
36
Q

Material breach of contract

A
  • Breach of contract
  • The nonperformance of a contractual duty
    • failure of consideration
    • nonbreaching party is discharged from contract
37
Q

Anticipatory repudiation

A
  • If before performance is due,
    • one party refuses to perform his or her contractual obligation
  • Results in material breach…
  • The nonbreaching party should…
    • not be required to perform
    • have the opportunity to seek a similar contract elsewhere
  • Idea of minimizing losses (get another contract)
38
Q

Mitigation of damages

A
  • When breach of contract occurs, the innocent injured party is held to a duty to reduce the damages that he or she suffered
  • Duty owed depends on the nature of the contract
39
Q

Impossibility, commercial, frustration

A
  • Personal contract where one party dies
  • contract subject matter destroyed
  • Frustration – supervening event makes it impossible to attain point of contract
  • RARE!
40
Q

Types of damages

A
  • Compensatory—compensate injured party for damages actually sustained
    • Sale of goods—difference between the contract and market price
    • Sale of land—same as sale of goods
    • Construction contracts—depends on when and who breaches
  • Consequential—foreseeable damages as a consequence of the original injury
  • Punitive—designed to punish the wrongdoer and deter similar activity in the future.
  • Nominal—no financial loss.
41
Q

Liquidated damages vs. penalties

(NOT TESTABLE)

A
  • Liquidated
    • amount determined by court order
    • enforceable
  • Penalties
    • designed to punish the breaching party
    • generally not enforceable
42
Q

Specific performance

A
  • Equitable remedy calling for the performance of the act promised in the contract
  • Remedy where the consideration is…
    • unique
    • sale of land
    • scarce
  • not available for personal services
43
Q

Reformation

(NOT TESTABLE)

A
  • Equitable remedy allowing a contract to be reformed, or rewritten to reflect the parties true intentions
  • Available when an agreement is imperfectly expressed in writing
44
Q

Quasi-contract

(NOT TESTABLE)

A
  • Equitable remedy imposed by courts to prevent unjust enrichment
  • Requires:
    • A benefit was conferred to the other party
    • Party conferring did so with the reasonable expectation of being paid
    • The benefit was not volunteered
    • Retaining benefit without paying for it would result in unjust enrichment of the party receiving the benefit
45
Q

Can you have your cake and eat it too?

A
  • No
  • Remedy must usually be
    • monetary or
    • specific performance
    • not both
46
Q

Election of remedies

A
  • Doctrine created to
    • prevent double recovery
  • Nonbreaching party must
    • choose which remedy to pursue
47
Q

Contract provisions – limiting remedies

A
  • Exculpatory clauses
    • Provisions stating that…
    • no damages can be recovered
  • Limitation of liability clauses
    • Provisions that affect the availability of certain remedies

BULE 302 - Final Exam (6 decks)

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