Contracts Flashcards
Express contract
Implied contract
Quasi-Contract
Express contract: Communicated via language
Implied contract: Parties conduct will indicate intent to be bound (e.g., watching someone paint house knowing they thought there was an agreement
Quasi-Contract: One party is unjustly enriched, and so restitution is the remedy
Offer definition
objective manifestation of an intent to contract
assessment includes: communicatino, certain and definite terms, promise, undertaking, commitment
Indirect revocation elements
(1) Offeree receives
(2) Correct info
(3) From a reliable source
(4) Of offeror’s act indicating to a reasaonble person that there was a revocation
Option contract requirements
Consideration!
Note, no 3 mo limitation here, like in merchant firm offer
ireevocable offer based on - detrimental reliance
Must be forseeable and destrimental on the offer
Acceptance
UCC: promise to ship or shipment
CL: communication of any kind (starting performance, any reasoanble manner)
Unilateral offer acceptance
You have to know of unilateral offer to accept it - can’t return teh dog, and then demand payment
Unilateral offer acceptance
full performance only!
UCC Acceptance via non-conforming goods
Options
1) Give seller time to CURE up until the contract time left (required
(2) Reject
(3) accept and sue for damages
Acceptance is effective…
upon dispatch
Consideration
bargained for exchange of something of legal value
something you’ve already done cannot be consideration
Promissory estoppel
No consideration, just a promise. Enforcable to teh extent necessary to prevent injustice if the promisor would reasonably be expected to induce action or forbearance of a define and substantial character adn it is induced (e.g., grandpa promises $1000 as a gift, and then granddaughter relies on it)
Only applies if there is no conisderation
Modification common law
new consideration ( can be paying earlier, even if smaller sum than originally owed!) unless unanticipated circumstances when contract was made & modification si fair and equitable in light of them
Defenses
Lack of capacity
Minors!
Defenses
Ambiguous
Look for one party being aware of ambiguity - terms will be construed for the ignorant party
Mutual mistake as to fact
Defense if (1) mistake concerns basic assumption on which contract is made; (2) mistke has a material effect and (3) party seeking avoidance did not assume risk of mistake
Unilateral mistake
if within SoF
Need writing signed by party sought to be bound
Sof - Goods
Must include quantifty term
SoF goods exceptions
(1) Specially manufacturerd, requires (A) unsuitablef or resal eand (2) manufacturer made substantial beginning on manufacture or commitments for procurement
(2) Merchant’s confirmatory memo:
(a) between two merchants
(b) in writing
(a) other party has reason to know of contract and
(b) doesn’t object in 10 days
Merchant confirmatory memo requirements
SoF, but
(1) Two merchants
(2) one sends writing that has essential terms(e.g., q)
(3) other party has reason to know of contract
(4) doesn’t object within 10 days
Both merchants will be bound by it
Parol Evidence
Partial vs. Final
Exceptions
Partial: oral evidence of consistent additional terms is allowed
Parol evidence allowed even if final where:
(1) it’s to deterine meaning of a word (not vary it)
(2) Fraud, duress, mistake
(3) Absence of condition precendent
(4) any subsequent modifications
Seller warranties
express: affirmations/promises made by seller
implied: implied warrant of merchantability (only for merchants who deal in goods of kind sold); that th item “fit the ordinary purpose”
IWF particular purpose: (1) seller know of special purpose and (2) buyer relies on their judgement
Disclaiming implied
“as is” - can’t be hidden
specific (e.g., mentions merchantability) - must be conspicous
Waiving condition precendent
Can be waived orally or in writing (if other party detrimentally relies on that waiver, they will be held to it!) unless retract wavier before detriminetal reliance
Wavier can be explicit or implied
Condition precendent or promise?
Depends on intent of the parties (look at relationship, prior practices, custom, performance needed from third party (if third party is involved, more likley to be condition).
“When” terms are usually considered to be timing, rather than conditions
Novation elements
(1) previous valid contract
(2) agreement among all parties
(3) immediate extinguishment of previous party’s duties nd
(4) Valid and enforceable new contract
Frustration of purpose elements
(1) Supervening act or event leading to frsutration
(2) at time of entering into conract it was unforseeable
(3) purpose has been completely destroyed
(4) both parties were aware fopurpose
Minor vs. Material breach
Material breach factors: BAHWEP amount of benefit received, adequacy of compensation for damages, part performance, hardship, negligent/willful behavior and likliehood breaching party will perfom
Minor: if received substantial benefit of the bargain; you are not relieved from duty to perform, can sue for damages
Breach under UCC
Parties right to reject nonconforming goods is cut off by acceptance; when (1) after reasonable opportunity to inspect, they indicate that the goods conform (2) buyer fails to reject within reasonable time or seasonably notify seller or rejection or (3) do any act inconsistent with sellers ownership
Buyer may revoke after acceptance (UCC) if
(1) defect that substantially impairs value to teh buyer and (2) accepted goods on belief defect woudl be cured OR they accepted becuase it was difficult to discover adn seller assured it was conforming
Revocation must occur within reasoanble time and before any substantial change in goods
Seller can cure when
there is (1) still contract left or (2) they reasonably thought the goods woudl be acceptace, they have a reasoanble further itme
Reliance damages
When you can’t figure out your profits (e.g., expectaion) put parties back in position as if contract had never been formed
Consequential damages
must be forseeable and ascertainable (rp standard)
Breaching party must have known or had reason to know of special circumstnaces
Incidental damages
Always allowed
Liquidated damages
Allwoed when (1) difficult to estimate at time of the contract formation and (2) amount is reasonable forecast
if not reasoanble, it will be a penalty which is unenforceable
Don’t have to actually have damages to recover
reformation
o Contract is amended to meet original terms where (1) mutual mistake or (2) innocent or fraudulent mispreresntation by one party
Restitution
(1) P conferred a benefit on D
(2) P did so with reasonable expectation of being compensated
(3) D knew of had reason to know of expectations and
(4) would be unjust enrichment if they were allowed to keep the benefit
Rescission
Remedy available if at tiem of contract formation, there was mutual mistake, unilateral mistake so extreme, mispresenataion, illegality, duress, undue influence, etc
Intended beneficairy
(1) named in contract to
(2) receives performance directly from promisor OR
(3) has some special relatinoship with promisee to indicate intent to benefit
Assignmetn requirements
Manifest intent to immediately and completely transfer their rights
Assignment is irrevocable if
obligor has already performed
assignment is put in writing
assignee can show detrimental reliance
Valid Delegation
o Not for a contract of personal judgment and skill
o Doesn’t change the obligee’s expectancy (e.g., requirements/outputs contracts)
o Must have present intent to maek a delegation
o If you delegate, you will always remain liable
valid assignemtn
o Prsent intent (promises in future to assign are never enough) to immediately and completely transfer rights
o Does not have to be in writing
Analyzing consideration
- Legal value is usually considered to be either a benefit to the promisor or a detriment to the promisee
- Most courts focus on the detriment element
- The promise must induce the detriment and the detriment must induce the promise
- Therefore, past consideration is insufficient.
- Here, Resident’s offer came after Sam’s performance so even though there was a detriment to sam, the promise could not have induced Sam’s act
- There was no bargain and thus, no consideration to support a contract
Starting MEE
Lay out all fo the - this is a services vs. goods, this is XYZ, definitions
if there is a service contracts…
Performance has to be “substantial”
condition of compelte performance may be excused if the party has rendered substantial performnace!
Material/minor breach factors
note: minor breach = performance is substantial; major breach = performance is not substantial
look at (1) amount of benefit received, (2) adequacy of damages, (3) extent of performance, (4) hardship to teh breaching party (5) weather breach was negligent or willful
Breaching party suing for damages
Exam - think restitution b/c unjust enrichment
Duress
usually, taking advantage of economic needs is not duress. Can be if (1) witholding something someone wants or needs (2) party threatnes to commit wrongful act tha twould seriously threatn contracting party (3) no adequate means avaialble
Good faith modification
means honestly in fact and the observance of reasonable commercial standards in fair dealing
