Contracts Flashcards
Once you identify a contracts problem, what questions do you want to answer?
Is there a contract? Was there offer, acceptance, and consideration? What law applies? Was there a breach? Are there any defenses to the breach? What remedies apply?
What are ways in which an offer may be terminated?
Revocation
Rejection
Acceptance
Death of a Party
Legal application
Lapse of Time/Silence
Counter Offer
Who may revoke an offer?
Only the offeror
Who may reject an offer?
Only the offeree
When does silence constitute acceptance?
When both parties had an expectation that silence can constitute acceptance
An offer becomes irrevocable when:
Accepted Performance begins on a unilateral contract Option Contract Firm Offer Detrimental Reliance
True of False: Ads are offers
False, ads are solicitations for offers
Unilateral Offer
A promise that seeks performance in return
Bilateral Contract
A promise seeking a return promise
An offer can be accepted:
Anytime before the offer is terminated
Revocations are effective when:
Received
Offeree can accept the offer:
Per the terms of the offer OR by any means reasonable within the circumstances
Mailbox Rule
An acceptance is effective upon dispatch
The Mailbox Rule does NOT apply when:
- The offer stipulates or request that the acceptance be received in a particular way
- When there is an option contract
- When the rejection is sent first
Most common breach defenses on the bar
- Statute of Frauds
- Capacity with minors
- Mistake
Exceptions to the Statute of Frauds for Merchants
Specially manufactured goods
Written confirmation between merchants not objected to within 10 days, so long as the other party received the confirmation
Admission in a pleading
Performance
True or False: Unilateral mistake is a defense to contract formation
False. Unilateral mistake is not a defense UNLESS the non mistaken party knew or should have known of the mistake
True or False: Mutual mistake is a defense to contract formation
True
Battle of the forms
UCC Rule: A contract is enforceable between two merchants even when the terms are not the same so long as there has been a definite expression of acceptance on the part of the offeree and this acceptance was sent in a reasonable time frame.
Mirror Image Rule
Common Law Rule: To have an enforceable contract, the two parties must have documents that contain identical terms and conditions
Battle of the Forms Exceptions
All terms or conditions added by the offeree are a part of the contract unless:
- the new terms fundamentally or materially alter the terms of the offer
- the offeror objects to the new terms and conditions within a reasonable amount of time
- the offer specifically limits the offeree’s acceptance to the terms and conditions found in the offer
Materially Alter
New terms that would
- impose hardship on the other party
- significantly shift risk within the agreement
- surprise the other party
Liquidated Damages
Pre-estimate of the probable loss that would be suffered from the late completion of a contract
Liquidated Damages in a contract are enforceable unless:
They are used in the contract as a penalty
Seller’s remedies for buyer’s breach under the UCC
- Sue for the difference between the contract price and the market price plus incidental damages, OR
- Sue for the difference between the contract price and the resale price plus incidental damages
Loss volume seller
Someone who can sell as many goods as he can obtain - an unlimited supply of goods and can sell as many as possible
Recovery for a loss volume seller
Recover the difference between the contract price and the wholesale price
Common Law Remedies for Breach
Legal remedies or Equitable remedies
Legal Remedies for Breach
Expectation damages, consequential damages, incidental damages
