Contracts Flashcards
What do you need to form a contract?
You need an offer, acceptance and consideration
Do you need the party’s subjective intent?
No, modern K does not consider party’s private intent
Are offers always revocable?
Generally yes… BUT there are three exceptions where offers will become irrevocable
Offer exceptions
Option K: requires additional consideration and makes offer irrevocable for a reasonable time (or specified time) - only b/w non-merchants.
Firm offers: no additional consideration, remains open up to 3 months (max) and is b/w merchants
Unilateral K: once party started performing, the offer is irrevocable.
Acceptance
You can accept in any reasonable manner UNLESS offer indicates method of acceptance
Acceptance - other rules: what if the offer is mailed?
If the offer is mailed, it invites to accept the offer by mail and it triggers the mailbox rule.
This rule says that the date of acceptance will be when the letter is mailed/delivered (not when it is received).
Mailbox rule exception
If you sent your rejection first and then your acceptance … whatever the offeror receives first wins
Consideration def
Bargained for exchange - anything you find good is adequate consideration
Consideration (gifts)
A promise of a a gift alone is never enforceable. There has to be an actual gift and then the gift-giver is SOL
Consideration (past moral deeds)
Consideration for past moral deeds is never enforceable!
Promissory estoppel
Someone detrimentally relied on what you promised, so you’re stopped from saying there was no offer (and they can recover)
Statute of Fraud (SOF)
M: marriage
Y: contracts that cannot be performed in under a year
L: unique contracts, such as contracts for land
E: executor agreements to execute trusts etc.
G: guarantor
S: sale of goods $500++
SOF exceptions (land and goods)
Partial performance of:
(1) land: where there was a partial payment and the payer either (a) took possession of the property or (b) made improvements
(2) sale of goods 500+ where there was (a) partial payment or (b) partial delivery
Conditions
Def & types
Precedent (prior); concurrent (at time of K); subsequent (after K)
The non-occurrence of the condition will discharge parties of K
Conditions
Language
Unless
Under the condition
IF
As long as
Subject to
It does not matter that the language says “subject to homeowner’s complete personal satisfaction”
Conditions
Waiver
Parties can waive expressly or impliedly. Implied by: (i) continuing to perform after the non-ocurrence of the condition
Who does condition affect? B/w who does it create a responsibility?
Conditions
Waiver - example & further explanation
Look closely to the facts of the waiver b/c it does not have to come directly from one of the parties in the contract … the waiver occurs by one of the parties that the condition creates a responsibility b/w.
i.e. the seller of shares and buyer conditioned the sale on the “parent company’s approval.” The seller cancelled K b/c buyer didnt seek the approval, but then the parent company said it would have routinely approved buyer - which means they want buyer to buy! Here… there is a waiver b/c the responsibility is b/w the buyer and the parent company.
Parole evidence
Partial K
Default is that there is a partial K so then any evidence supplementing K can be admitted EXCEPT for evidence that contradicts a material term K (price, quantity)
Parole evidence
Final K
If the facts tell you that the K is final (there is a merger… all the terms are final, etc.) — NO parole evidence accepted …
Unless, there’s an ambiguity in the K
Parole evidence
EXCEPTIONS
Regardless of the type of K, parole evidence will always come to:
1. Prevent fraud or duress
2. Show the existence of a condition
3. Show customs b/w parties or trade usage
Anticipatory repudiation
Someone unequivocally stated they will not perform (absolute denial) — you can repudiate K or wait for them to act.
If you’re worried about performance (b/c you have facts showing worry is granted) … then?
You can ask for assurances and if they respond in a reasonable time — you have to wait for performance
If they don’t respond in reasonable time — breach
Assignment / delegation
Default
- Parties can always assign
- Non-assigning (OG party) must accept performance
- If new guy performs poorly/does not perform, then OG party can recover from new guy AND/or assigning party
Assignment/delegation (exceptions)
(1) prohibition against assignment = you can still assign.
(2) prohibition against delegation = NO delegation
(3) void against assignment/delegation = NEITHER
(4) if there is a unique skill/training involved, specifically contracted for, no one can replace (even w/same or similar training
