Contracts Flashcards
Analyzing a Contracts Questions
- Is there an enforceable contract?
- Any defenses to enforceability?
- Did defendant breach?
- Defenses that would excuse the breach?
- Damages/ Remedies
Formation of Valid Contractg
Mutual Assent + Consideration + no defenses to formation
Offer and Mutual Assent
Offer: manifestation of a present intent to enter a contract + definite and certain terms + communicated to an identified offeree.
Mutual Assent: offer + acceptance
Mailbox Rule
Acceptance effective when sent or communicated.
Rejected when received.
Consideration
Required bargained for exchange of legal detriment between parties.
Substitutes for Consideration
- Material Benefit: a promise for previously received benefit is binding unless given as a gift or value is disproportional.
- Promissory Estoppel: party detrimentally relied on other’s promise expecting result to avoid injustice.
Past/Moral consideration is not consideration.
illusory promises (one party has no obligation to perform) not consideration
Pre- Existing Duty Rule
past performance or pre-existing duty is not consideration unless an addition or change in performance
Defense to Enforceability.
- Unconscionability
- Lack of Capacity
- Duress
- Mistake
- Misrepresentation
- Lack of Consideration
- Statute of Frauds
Statute of Frauds writing requirements
writing+ signed by part to be charged + id subject + essential terms + k intended
UCC: quantity terms, signature, unless confirmation memo
SOF: Required Subject to Writing
!. Real Estate Contracts over 1 year
- Services Incapable of performance within 1 year.
- Sale of Goods of $500 or more
- Suretyship Contracts
Exceptions to SOF Writings
- Part Performance: (payment + improvements or possession
- Services: Full Performance
- Suretyship: “leading object” or “main purpose”
- Sale of Goods:
- Confirmation Memo - 2 merchantss;10 days and no objection.
- Specialty Manufactured Goods
- Delivery and Acceptance of Goods
- Delivery and Acceptance of Payment
UCC: Acceptance of Goods
- buyer tells seller good are conforming or will retain non-conforming goods
- fails to reject the goods after inspection
- or any act inconsistent with seller’s ownership of the goods.
buyer is obligated to pay for goods once acceoted unless revocation of acceptance allowed.
Anticipatory Repudiation
when a party notifies that they are unable and unwilling to perform under K.
- Non breaching party
- repudiate and sue for dmg before time of performance due
- treat contrct as discharged
- sue at time of performance or
- urge other party to perform
- retracting repudiation to restore K unless:
- cancelled
- other party materially changed position
- considered repudiation final
Warranty of Title
Warrants title shall be good/ rightful and free from any security interest, liens or encumbrances
Remedies: Expectation Damages
puts P in position as if K not breached.
dmgs must be actual cause by D + proximate cause by D + certain and unavoidable.
Remedies: Consequential Damages
Ariese indirectly from breach. (lost profits)
dmgs must be forseeable at time of K + arise from P’s special circumstance that D knew + certain.
UCC Buyer Remedies & Damages
A buyer who never received goods, rightfully rejected or revoked acceptance may:
- cancel contract
- recover refund
- recover incident and consequential dmgs
- AND/OR recover
- coveer dmgs: (Sub price - K prince if in good faith)
- market dmgs: (M price - K price if not in good faith)
buyer keeps nonconforming goods entitled to loss in value dmgs.
Waste Doctrine
Normally seen in construction contract context
award for diminution in value instead of expectation dmgs
applies if: contractor performs in good faith but defects exist AND remedying defect would be economic waste (cost of completion exceed value work)
Unjust Enrichment (Resitution)
cannot recover restitution and expectation dmgs.
awarded to prevent unjust enrichement when one party confers a benefit.
Mitigation of Damages
a party must take reasonable steps to mitigate losses.
not required if undue risk, burden or humilation.
