Contracts

Question 1

Parol Evidence Rule

Answer 1

The parol evidence rule bars extrinsic evidence of a prior agreement where the prior agreement contradicts the terms of a final written agreement or where the prior agreement purports to add to a completely integrated agreement (i.e., one that is intended by the parties to be both the final and exclusive manifestation of the parties’ understanding).

An exception to the parol evidence rule applies where the extrinsic evidence is offered to prove that the written agreement is to take effect only upon the occurrence of a stated condition (even if the condition is for only one party’s benefit).

Question 2

Restitution

Answer 2

Restitution is generally used to prevent unjust enrichment in a case where a non-breaching party partly performs before the other party breaches the contract.

Generally not available to recover a benefit conferred pursuant to a valid and binding contract.

Question 3

Implied Contract (Implied in Fact Contract)

Answer 3

A contract without a written or oral agreement. Formed by manifestations of assent other than oral or written language, i.e., by conduct.

Example: If a person sits in a barber’s char and cuts his hair, a contract is formed between the parties without oral or written agreement.

Question 4

Quasi-Contracts

Answer 4

These are not contracts at all. Rather, these are constructed by courts to avoid unjust enrichment by permitting the plaintiff to bring an action in restitution to recover the amount of benefit conferred on the defendant.

Question 5

Election Waiver

Answer 5

When a condition does not occur or a duty of performance is broken, the beneficiary of the condition or duty must make an election; she may: (1) terminate her liability, or (2) continue under the contract. If she chooses to continue, she will be deemed to have waived the condition or duty.

Requires neither consideration nor estoppel. Election waiver CANNOT be withdrawn, even if the other party has not relied on it.

Question 6

Pre-existing Duty Rule Exception

Answer 6

Exception: pre-existing duty rule does not apply when the legal duty is owed to a third party.

Question 7

Promise to Settle a claim

Answer 7

A promise to settle a claim may be consideration to support a return promise so long as there is a good faith dispute over the validity for the claim. One’s good faith belief that the contract was not properly fulfilled is sufficient consideration to try and settle the payment for less. (ex: poorly painted fence and settling for less than original price to pay fence).