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1
Q

Contract Elements

A

-Offer
-Acceptance
-Consideration

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2
Q

Offer Elements

A

-Promise
-Terms (CL: all essential, UCC: quantity)
-Communication: offer must be communicated to the offeree

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3
Q

Bilateral Contract

A

Contract in which parties exchange promises; can be accepted by a promise OR by beginning performance

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4
Q

Unilateral Contract

A

Contract in which the offeror makes a promise and the offeree must perform; can only be accepted by complete performance

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5
Q

Option

A

-CL offeror promises to keep offer open for x time
-Must pay CONSIDERATION

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6
Q

Firm Offer

A

-UCC offeror [must be merchant] promises to keep offer open for x<90 days
-Must be in WRITING

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7
Q

Acceptance (bilateral)

A

Can be accepted by a promise OR by the beginning of performance

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8
Q

Acceptance (unilateral)

A

Can ONLY be accepted by complete performance

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9
Q

UCC Counteroffer, one/both parties NOT merchants, 2-207(1)

A

-Acceptance with changes from offer is VALID
-Changes DO NOT control unless offeror consents

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10
Q

UCC Counteroffer, both parties merchants

A

-Acceptance with changes from offer is VALID
-Changes DO control, unless materially alter agreement, terms of offer limit to terms of offer, or offeror objects

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11
Q

Mailbox Rule

A

-Acceptance is valid when placed in the mail
-EXCEPT if there is an option contract or firm offer, the acceptance is only valid when received before the offer expires
-If a party mails a rejection of an offer and then mails an acceptance to the
offer, the first communication to be received is effective.

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12
Q

Pre-existing Duty Rule

A

A promise to perform a preexisting legal duty will not qualify as consideration because the promisor is already required to perform by the promisor

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13
Q

Past Consideration

A

a legal detriment incurred in the past does not constitute consideration because it was not bargained for in exchange for a legal detriment

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14
Q

Moral Consideration

A

-Under the modern trend, a promise not supported by consideration may be enforceable if it is made in recognition of a significant benefit previously received by the promisor from the promisee
- does not apply if the promisee conferred the benefit as a gift
-may also reduce the amount of money owed under the promise if it is disproportionate to the benefit conferred by the promisee

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15
Q

Promissory Estoppel Elements

A

-Substitute for CONSIDERATION
-ELEMENTS
-Promisor should reasonably expect promise to induce action/forbearance
-Promise actually does induce action/forbearance
-Enforcement would prevent injustice

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16
Q

Mutual Mistake, Reformation
-Both parties mistaken

A

-There was a prior agreement (either oral or written) between the parties
-There was an agreement by the parties to put that agreement into writing
-As a result of a mistake, there is a difference between the prior agreement and the
writing

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17
Q

Mutual Mistake, Rescision
-Both parties mistaken

A

-Reformation not available
-A mistake of fact existing at the time the contract was formed
-The mistake relates to a basic assumption of the contract
-The mistake has a material impact on the transaction
-The adversely affected party did not assume the risk of the mistake

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18
Q

Unilateral Mistake
-One party mistake

A

Mistaken party can RESCIND if:
-The mistake would make enforcement of the contract unconscionable
-OR Non-mistaken party failed to disclose the mistake or caused the mistake
-Also requires absence of serious prejudice to non-mistaken party

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19
Q

SOF Types Applicable

A

-Marriage contracts
-Suretyship
-One Year contracts (cannot be completed in 1 year)
-UCC goods >/= $500
-Real Property

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20
Q

Do a SOF one

A
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21
Q

Illegality

A

A court will not enforce a contract that has involves illegal consideration or performance

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22
Q

Unconscionability

A

-A court will not enforce a contract that is so unfair,
no reasonable person would agree to it
-Procedural or Substantive

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23
Q

Express Warranty

A

-Any promise or description that is part of the basis of the bargain
-unless it is merely the seller’s opinion/commendation of the value of the goods
-Disclaimers that conflict w/ Express Warranties are ignored

24
Q

Implied Warranty of Merchantability elements

A

-Seller is a merchant
-Goods are fit for their ordinary purpose
-Goods pass without objection in the trade under the contract description

25
Q

Implied Warranty of Fitness for a Particular Purpose

A

-A warranty that the goods are fit for a particular purpose is implied if the seller has
reason to know:
-The buyer has a PARTICULAR USE for the goods
-The buyer is RELYING upon the seller’s skill to select the goods
-CAN BE DISCLAIMED if “as is” language is WRITTEN/CONSPICUOUS

26
Q

Modification of Contract (CL)

A

-Both parties must AGREE
-New CONSIDERATION is required

27
Q

Modification of Contract (UCC)

A

-Both parties must AGREE
-Must be entered into w/ GOOD FAITH

28
Q

Parol Evidence Rule

A

extrinsic evidence of oral or written communications prior to the written contract (e.g., contract negotiations) are generally inadmissible for contradicting the terms of the contract.

29
Q

Impracticability Defense Elements

A

-An unforeseeable event has occurred
-Nonoccurrence of the event was a basic assumption on which the contract was made
-The party seeking discharge is not at fault

30
Q

Expectation Damages Formula

A

Expectation Damages = loss in value + other loss - cost avoided - loss avoided

31
Q

Performance (CL)

A

-A party must SUBSTANTIALLY perform their part
-A party that sub may recover on contract, even if not full
-A party that NOT sub may NOT recover Damages, but MAY recover Restitution
-Delay in performance NOT failure to sub
-Failure to sub is material breach

32
Q

Performance (UCC)

A

-Parties must STRICTLY perform (perfect tender) or breach
-Buyer may inspect goods and Accept (obligation to pay) or Reject all or part of the goods
-If time remains on contract after Buyer rejects, seller has right to Cure

33
Q

Installment Contracts (UCC) generally

A

-Goods to be delivered in multiple shipments
-Each shipment is to be separately accepted by the Buyer
-Payment is GENERALLY due upon EACH delivery, unless price cannot be apportioned

34
Q

Installment Contracts (UCC) Nonconforming segments

A

-Buyer can reject ONLY if nonconformity Substantially Impairs the value of that shipment AND Cannot be Cured
-Seller may make Adequate Assurances, then Buyer must accept and wait for cure
-Remaining Segments: Buyer may Cancel the entire contract ONLY if the nonconformity substantially impairs the Value of the ENTIRE Contract to Buyer

35
Q

Conditions

A

-A future event that must occur before a party’s contractual rights or obligations are created, destroyed, or enlarged
-EXPRESS: condition expressed in the contract itself
IMPLIED: Conditions which a court may find exist because the nature of the contract suggests that the parties intended the condition

36
Q

Excuse of Conditions
WWE

A

WAIVER: A condition may be waived by words or conduct; the waiving party would then have a duty to perform
WRONGFUL INTERFERANCE: If a party hinders the other party’s performance and interferes with the occurrence of the condition, the condition will be excused, and the wrongful party will have duty to perform
-ESTOPPEL: If a party indicates that it will not enforce a condition, and the other party reasonably relies on this, the party will be estopped from later enforcing the condition

37
Q

Impracticability

A

-Duty to perform may be DISCHARGED if:
-An unforeseeable event occurs (e.g., natural disaster) making the performance of the contract extremely difficult
-The nonoccurrence of the event was a basic assumption at the time of the contract
-AND The party seeking discharge is not at fault

38
Q

Impossibility

A

-Duty to perform may be DISCHARGED if:
-An unforeseeable event occurs, making it objectively impossible for the party to perform

39
Q

Frustration of Purpose

A

-Duty to perform may be DISCHARGED if:
-an unexpected event arises that destroy the party’s purpose for entering the contract
-AND The nonoccurrence of the event was a basic assumption at the time of the contract
-EVEN IF performance is still possible

40
Q

Third Party Beneficiary Contracts

A

-Either INTENDED or INCIDENTAL
-INTENDED
-Parties intended on making third party a beneficiary
-MAY enforce the contract
-INCIDENTAL
-Parties did not necessarily intend on making third party a beneficiary
-MAY NOT enforce the contract

41
Q

Assignment of Rights

A

-Almost all contract rights can be assigned, unless Specified
-Assignment not allowed when:
-Materially increases duty or risk of the obligor
-OR materially reduces the obligor’s chance of obtaining performance

42
Q

Delegation of Duties

A

-Generally, obligations under a contract may be delegated
-Delegator is NOT released from liability (unless Novation), is still liable if delegatee does not perform

43
Q

Anticipatory Breach/Repudiation (CL)

A

-The promisor party clearly and unequivocally indicates through words or acts that it will not perform.
-The non-breaching party can:
-Treat it as breach and sue immediately
-Suspend its own performance and demand performance
-Cancel contract
-OR Wait for date of performance and then sue for breach
-Breaching party may RETRACT unless Other party:
-Cancelled contract
-Materially changed position on basis of repudiation
-OR Otherwise indicated that he considers repudiation to be final

44
Q

Anticipatory Breach/Repudiation (UCC)

A

-Buyer/Seller EITHER:
-Unequivocally refuses to perform
-OR Fails to provide Adequate Assurances
-Non-breaching party can:
-Treat the repudiation as a breach of contract and sue immediately
-Suspend its own performance and demand performance from the promisor
-Cancel the contract
-OR Wait for the date of performance, and then sue for breach

45
Q

Adequate Assurances (UCC)

A

-Before repudiation, Ether party can demand assurances in writing if it has reasonable grounds to be insecure about the other party’s ability to perform and may suspend performance until it receives assurances
-A failure to provide reasonable assurances within a reasonable time (must not exceed 30 days), can be treated as a repudiation.

46
Q

Material v. Minor Breach (CL)

A

-A material breach occurs when the non-breaching party does not receive the substantial benefit of the bargain
-The nonbreaching party can withhold any promised performance and pursue remedies for breach
-A minor breach occurs when the breaching party has substantially performed, but not fully performed
-The nonbreaching party is entitled to pursue remedies for the minor breach, but it still must perform under the contract

47
Q

Expectation Damages

A

-Generally calculated by comparing the value of performance without the breach (i.e., contract price for performance) with the value of the performance with the breach (i.e., fair market value of performance)
-Diminution in value: If the award of expectation damages would result in economic waste, then courts may instead award damages equal to diminution in value

48
Q

Consequential Damages

A

-Reasonably foreseeable damages other than expectation damages that are related to the breach of the contract (e.g., loss of profit).
-MUST be:
-a FORESEEABLE consequence of breach
-damage was CAUSED by the breach
-reasonably CERTAIN dollar amount of damages

49
Q

Reliance Damages

A

-Damages that the nonbreaching party incurs in reasonable reliance upon the promise that the other party would perform
-CANNOT recover BOTH Expectation AND Reliance

50
Q

Incidental Damages

A

-Damages that arise when the nonbreaching party is trying to remedy the breach (e.g., in a commercial contract, the cost of finding a replacement seller of goods).

51
Q

Duty to Mitigate Damages

A

-The nonbreaching party has duty to avoid or mitigate its damages by taking reasonable steps to seek replacements/substitutes for goods and/or services.
-A failure to take reasonable steps to mitigate damages will reduce the damages recovered
by the nonbreaching party.

52
Q

Restitution

A

-Allows nonbreaching and breaching parties to recover damages under an unjust enrichment theory (i.e., not based on the contract).
-NONBREACHING PARTY
-Cannot seek restitution if it has performed all of its duties and the only performance due from the other party is the payment, (must seek expectation Dmgs instead)
-Restitution damages based on the reasonable value of the benefit conferred on the other party
-BREACHING PARTY
-If not sub per, CANNOT recover
-IF nonbreaching party ahs benefited from breaching party’s performance, THEN breaching party can recover for the benefit conferred minus the damages the nonbreaching party is entitled to

53
Q

Quasi Contract

A

-If there is no enforceable contract, a court may award restitution damages on the basis of
quasi-contract if:
 The plaintiff conferred a measurable benefit on the defendant;
 The plaintiff acted without gratuitous intent (i.e., he intended to be paid); and
 It would be unfair to let the defendant retain the benefit.

54
Q

Specific Performance

A
  1. There must be a valid contract.
  2. The terms of the contract must be certain/clear enough to allow a court to make an
    order.
  3. The nonbreaching party has satisfied any conditions precedent (or the condition has
    been excused), so the breaching party’s performance is now due.
  4. Money damages are inadequate.
    * This usually means the item(s) involved in the contract are unique (e.g., land, pieces
    of art, antique cars).
  5. It is feasible for the court to enforce and supervise the breaching party’s performance.
55
Q

Buyer’s Remedies for Failure to Tender Goods (UCC)

A

-Damages
-The buyer may recover the market price minus the contract price.
-Cover
-The buyer may purchase similar goods elsewhere and recover the replacement price minus the contract price.
-Specific Performance
-The buyer may demand specific performance for unique goods or if the buyer is unable to
cover

56
Q

Buyer’s Remedies: Non-conforming Tender

A
  • Buyer has the right to accept or reject all or part of the goods.
  • The buyer has the right to inspect the goods before deciding whether to accept or reject.
  • Payment does not constitute acceptance if there is no opportunity to inspect the goods
    before payment.

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