Contract to stud

Question 1

Offer

Answer 1

A manifestation of intent to enter into a contract, with definite or reasonably certain terms, communicated to an identified offeree.

Question 2

Acceptance

Answer 2

A manifestation of assent to the terms of the offer.

Question 3

Acceptance under UCC: If additional/different terms and one party is not merchant

Answer 3

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.

Question 4

Acceptance under UCC:

If additional terms and both are merchants, 3 situations

Answer 4

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.

Question 5

Acceptance under UCC:

If different terms and both are merchants

Answer 5

Different terms “knock” each other out and a UCC gap filler will used instead

Question 6

Consideration:

Answer 6

Bargained for exchange of any act or forbearance that benefits the promisor or causes detriment to the promisee.

Question 7

Exception to Consideration:

Material benefit rule

Answer 7

a promise made in recognition of a benefit previously received is binding to the extent necessary to prevent injustice.

© party had donative intent

Question 8

Exception to Consideration:

Promissory estoppel:

Answer 8

(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)

Question 9

Quasi-K (implied-in-law K) exists when

Answer 9

(a) P gives a measurable benefit;
(b) P reasonably expected to get paid;
(c) it would be unfair to let D keep the benefit

Question 10

Defenses to Formation: Intoxication

Answer 10

a contract entered into by a party while intoxicated is voidable only where the other party had reason to know of the intoxication.

Question 11

Defenses to Formation: Mistake (mutual)

Answer 11

contract is voidable (may be rescinded/reformed).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

Question 12

Defenses to Formation:

Mistake (unilateral)

Answer 12

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.

Question 13

Defenses to Formation: Misunderstanding

Answer 13

(a) involves a material term open to different interpretation
(b) neither knows or should know of confusion. (e.g. $12.50 vs. $1250)

Question 14

Defenses to Formation: Misrepresentation

Answer 14

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.

Question 15

Defenses to Formation: Undue influence definition

Answer 15

K is voidable if assent is induced by

1. unfair/excessive persuasion from someone who dominated (eg, prison guard/prisoner) or
2. a special relationship of trust and confidence (lawyer/client)

Question 16

Defenses to Formation: Duress

Answer 16

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.

Question 17

Defenses to enforcement:

Illegality & Public Policy

Answer 17

Courts will NOT enforce contracts that are illegal or contrary to public policy.

Question 18

Defenses to enforcement:

SoF requirement

Answer 18

(a) writing
(b) signed by the party whom the K is asserted (party disputing the existing K);
(c) contains essential terms

Question 19

SoF: Merchant’s confirmatory memo exception

Answer 19

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.

Question 20

Defenses to enforcement:

Unconscionability

Answer 20

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

Question 21

Discharge of duty to perform:

Impracticability

Answer 21

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)

Question 22

Discharge of duty to perform:

Frustration of purpose:

Answer 22

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.