Contract Restatements

Question 1

Offer (24)

Answer 1

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

Question 2

Acceptance (50)

Answer 2

An acceptance of an offer is a manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.

Question 3

Method of Acceptance (32)

Answer 3

In case of doubt as to how an offer can be accepted, it may be by promise to perform or by rendering the performance, as the offeree chooses.

Question 4

UCC 2-207

Answer 4

(1) A definite and seasonable expression of acceptance or a written confirmation, sent within a reasonable time, operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
(2) Additional terms are proposals to be added to the contract. Between merchants they are automatically included unless: (a) the offer is expressly limits acceptance to the terms of the offer, (b) they materially alter it; or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
(3) If there is not a written memorandum, conduct by both parties which recognizes the existence of a contract can be used to establish the existence of a contract. The terms of the contract include what the parties agreed upon and any supplementary terms incorporated terms.

Question 5

Bargained for Consideration (71)

Answer 5

To be consideration, a performance or a return promise must be bargained for. The performance can be an act; forbearance; or the creation, modification, or destruction of a legal relation.

Question 6

Fair Modifications (89a)

Answer 6

A promise modifying a duty under a contract not fully performed on either side is binding if the modification is fair and equitable in view of circumstances not anticipated by the parties when the contract was made.

Question 7

Promissory Estoppel of Modifications (89c)

Answer 7

A promise modifying a duty under a contract not fully performed on either side is binding to the extent that justice requires enforcement in view of material change of position in reliance on the promise.

Question 8

UCC 2-209

Answer 8

Modifications must pass the good faith test imposed.

Question 9

Promise for Benefit Received (86)

Answer 9

A promise made in recognition for a benefit received previously by the promisor from the promisee is binding to the extent necessary to prevent injustice. It is not binding if: (1) the benefit was conferred as a gift, (2) the promisor has not been unjustly enriched, or (3) the value of the promise is disproportionate to the benefit.

Question 10

Promise Reasonably Inducing Action or Forbearance (90)

Answer 10

(1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee and which does induce such action or forbearance is binding if injustice can only be avoided by enforcing the promise. Remedy can be limited as justice requires.
(2) A charitable subscription or a marriage settlement is binding without proof that the promise induced action or forbearance.

Question 11

Effect of Misunderstanding (20)

Answer 11

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 each party has reason to know the meaning attached by the other.

Question 12

Mutual Mistake (152)

Answer 12

Where a mistake of both parties at the time the contract was made as to a basic assumption on which the contract was made has a material effect on the agreed exchange of performances, the contract is voidable by the adversely affected party unless he bears the risk of the mistake.

Question 13

Unilateral Mistake (153)

Answer 13

Where a mistake of one party at the time a contract was made as to a basic assumption on which he made the contract has a material effect on the agreed exchange of performances that is adverse to him, the contract is voidable if he does not bear the risk for the mistake, AND (a) the effect of the mistake would make enforcement unconscionable or (b) the other party had reason to know of the mistake or his fault caused the mistake.

Question 14

When a Party Bears the Risk of a Mistake (154)

Answer 14

A party bears the risk of a mistake when it is allocated to him by agreement of the parties, he is aware of his limited knowledge of the facts at the time of contracting, or it is found reasonable for the risk to be allocated to him by the court.

Question 15

Misrepresentation Preventing Formation of a Contract (163)

Answer 15

If a misrepresentation induces conduct that appears to be a manifestation of assent by a person who does not know nor has a reasonable opportunity to know of the character or essential terms of the proposed contract, there is not an effective manifestation of assent.

Question 16

Misrepresentation Which Makes a Contract Voidable (164)

Answer 16

If a party’s manifestation of assent is induced by either a fraudulent or a material misrepresentation by the other party upon which the recipient is justified in relying, the contract is voidable by the recipient.

Question 17

When a Misrepresentation is Fraudulent or Material (162)

Answer 17

(1) A misrepresentation is fraudulent when the maker uses it to induce assent from the other party and the maker knows it is not true according to the facts, knows that he does not have the confidence he states in the truth of the assertion, and knows that he does not have the basis that he states/implies for the assertion.
(2) A misrepresentation is material if it would be likely to induce a reasonable person to manifest his assent, or if the maker knows it would be likely to induce the recipient to do so.

Question 18

Physical Duress (174)

Answer 18

If conduct is physically compelled by duress, the conduct is not an effective manifestation of assent.

Question 19

Duress by an Improper Threat (175)

Answer 19

(1) If a party’s manifestation of assent is induced by an improper threat by the other party that leaves the victim with no reasonable alternative, it is voidable by the victim.
(2) If the manifestation of assent is induced by a third person, that contract is not voidable if the other party acted in good faith and without reason to know of the duress either gives value or materially relies on the transaction.

Question 20

Improper Threat (176)

Answer 20

A threat is improper if it is a breach of duty of good faith and fair dealing under a contract with the recipient.

Question 21

Unenforceable Terms on Grounds of Public Policy (178)

Answer 21

A promise or other term of an agreement is unenforceable if legislation says it is unenforceable or the interest of its enforcement is clearly outweighed by a public policy reason against the enforcement of such terms.

Question 22

UCC 2-302

Answer 22

If unconscionability is found as a matter of law, the court can refuse to enforce a contract, they can remove the unconscionable clause, or they can try to limit the application of the unconscionable clause.

Question 23

Contracts Covered (110)

Answer 23

First, a written memorandum or applicable exception is needed. Classes of contracts covered are: the executor-administrator provision, the suretyship provision, the marriage provision, the land contract provision, and the one-year provision.

Question 24

Longer Than a Year Contracts (130)

Answer 24

If it is supposed to take longer than a year, all promises in a contract are within the Statute of Frauds until one party to the contract completes his performance. Once someone completes performance, the one-year provision does not prevent enforcement of the promises of other parties.

Question 25

Statute of Frauds for Goods–UCC 2-201

Answer 25

(1) In a contract for goods over $500, it is not enforceable unless there is a writing sufficient to indicate that a contract has been made between the parties that is signed by the party against whom enforcement is sought. (Watch the quantity of goods shown.)
(2) BETWEEN MERCHANTS, a sufficient writing signed by the party seeking enforcement of the contract can work to enforce a contract if it is sent within a reasonable time, the other party has reason to know its contents, and the other party does not object in 10 days after receiving it.
(3) A contract does not have to meet the requirements of subsection (1) if (a) the goods are specifically made for the buyer and not suitable for sale to others, (b) the party against whom enforcement is sought admits that the contract was made, or (c) if payment has been made and accepted or if the goods have been received and accepted.