Contract to stud Flashcards
Offer
A manifestation of intent to enter into a contract, with definite or reasonably certain terms, communicated to an identified offeree.
Acceptance
A manifestation of assent to the terms of the offer.
Acceptance under UCC: If additional/different terms and one party is not merchant
Acceptance exists. Additional/different terms are proposed additions to be separately accepted by offeror.
Exception: If acceptance is conditional based on assent to new/different terms, it is a counteroffer.
Acceptance under UCC:
If additional terms and both are merchants, 3 situations
Additional terms automatically included in K unless
(1) terms materially alter the deal;
(2) recipient object within reasonable time; or
(c) offer explicitly conditioned acceptance on proposed terms.
Acceptance under UCC:
If different terms and both are merchants
Different terms “knock” each other out and a UCC gap filler will used instead
Consideration:
Bargained for exchange of any act or forbearance that benefits the promisor or causes detriment to the promisee.
Exception to Consideration:
Material benefit rule
a promise made in recognition of a benefit previously received is binding to the extent necessary to prevent injustice.
© party had donative intent
Exception to Consideration:
Promissory estoppel:
(a) D made a promise that’s reasonably expected to induce reliance;
(b) P detrimentally relied;
(c) enforcing the promise would avoid injustice.
- written charitable subscription (charity need not show reliance)
Quasi-K (implied-in-law K) exists when
(a) P gives a measurable benefit;
(b) P reasonably expected to get paid;
(c) it would be unfair to let D keep the benefit
Defenses to Formation: Intoxication
a contract entered into by a party while intoxicated is voidable only where the other party had reason to know of the intoxication.
Defenses to Formation: Mistake (mutual)
contract is voidable (may be rescinded/reformed).
Elements
(1) both parties are mistaken as to a basic assumption,
(2) the mistake is material, AND
(3) the person asserting the mistake did not bear the risk of the mistake. mistake
Defenses to Formation:
Mistake (unilateral)
generally NOT a valid defense
Elements
(1) a mistake by one party,
(2) that is unknown to the other party,
(3) concerning a basic assumption,
(4) that has a material effect.
▪ BUT, a contract is voidable by the mistaken party if: (a) one party knew or had reason to believe of the mistake; OR (b) the mistake makes the contract unconscionable.
Defenses to Formation: Misunderstanding
(a) involves a material term open to different interpretation
(b) neither knows or should know of confusion. (e.g. $12.50 vs. $1250)
Defenses to Formation: Misrepresentation
Deceived party can render K voidable if:
(a) material or fraudulent misrepresentation of present fact;
(b) induced assent to the K;
(c) justifiable reliance on the misrepresentation.
Defenses to Formation: Undue influence definition
K is voidable if assent is induced by
- unfair/excessive persuasion from someone who dominated (eg, prison guard/prisoner) or
- a special relationship of trust and confidence (lawyer/client)
Defenses to Formation: Duress
K is voidable if assent was induced by an
1) an improper threat is made;
2) that induces a party;
3) who has no reasonable alternative;
4) to enter into a contract.
Defenses to enforcement:
Illegality & Public Policy
Courts will NOT enforce contracts that are illegal or contrary to public policy.
Defenses to enforcement:
SoF requirement
(a) writing
(b) signed by the party whom the K is asserted (party disputing the existing K);
(c) contains essential terms
SoF: Merchant’s confirmatory memo exception
In contracts of $500+ where both parties are merchants,
(a) when one sends a writing sufficient under SoF to be enforced against himself,
(b) receiving party has reason to know its contents, and
(c) the receiving party does not object in writing within 10 days,
then the contract is enforceable against the receiving party even though he has not signed it.
Defenses to enforcement:
Unconscionability
Occurs when the contract/term shocks the conscious of the court.
A contract is unconscionable when it is so unfair to one party that no reasonable person in the position of the parties would have agreed to it.
Usually need both procedural and substantive unconscionability
Discharge of duty to perform:
Impracticability
discharges duty to perform if
(a) unforeseeable– unforeseeable event;
(b) basic assumption– nonoccurrence of the event was the basic assumption on which K was made; and
(c) fault–party seeking discharge was not at fault (assumption of risk)
Discharge of duty to perform:
Frustration of purpose:
discharges party’s duty to perform/allows party to rescind if unexpected events arise that destroy one’s purpose in entering K.
Unexpected event must be so severe that it’s not within assumed risks inherent under K.
