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American Law > Contracts > Flashcards

Contracts Flashcards

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1
Q

Contract

A

legally enforceable agreement between 2 or more entities (people, businesses, governments, etc)

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2
Q

Examples of common contracts

A

Terms and Conditions
Leases
Student Loans
Codes of Conduct

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3
Q

What are the things needed to establish a contract?

A

An offer
Acceptance of the offer
Mutual assent of the parties
Support by Consideration
Cannot violate public policy

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4
Q

Void contracts

A
  • not contracts at all
    • Usually because they lack one of the key elements of a contract
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5
Q

Voidable Contracts

A
  • contracts that may be avoided by 1 of the parties (but the other cannot)
    • Perhaps due to fraud, or duress
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6
Q

Unenforceable Contracts

A
  • those that cannot be enforced by courts
    • Perhaps the contract was valid, but the statute of limitations on enforcement has passed. Or the writing cannot be produced.
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7
Q

Bilateral Contract

A

both parties agree to do take some action in the future

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8
Q

Unilateral contract

A

one party makes a promise in exchange for another person performing (or not performing) an act

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9
Q

Offer

A
  • a proposal to make a contract
    • Made by an offeror to the offeree
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10
Q

What makes an offer legally effective?

A
  • A definite proposal
  • Made with intent to contract
  • Communicated to the offeree
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11
Q

Offers p2

A

Offers are distinct from solicitations of an offer – invitations for someone else to make an offer

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12
Q

List of things that can terminate a contract

A
  • Revocation by the offeror (before acceptance only)
  • Lapse of time (explicit limit, or “reasonable” time)
  • Subsequent illegality (the subject matter gets banned)
  • Destruction of the subject matter
  • Death or lack of capacity (Before acceptance)
  • Rejection
  • The offeree makes a counteroffer
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13
Q

Counteroffer

A
  • A rejection of the previous offer
  • A new offer to perform under different terms
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14
Q

Is the previous offer still valid if a counteroffer is produced?

A

No, the previous offer is now terminated and no longer available or binding on either party

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15
Q

Is an inquiry a counteroffer?

A

No

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16
Q

Option

A

an agreement to hold an offer open for a set period of time

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17
Q

Acceptance

A

the agreement of the offeree to be bound by the terms of the offer

18
Q

What are the conditions under which an acceptance is legal?

A
  • An unconditional consent
    • Remember that conditional consent might be a counteroffer
  • To an open offer
  • By the offeree only
  • Communicated to the offeror (Mailbox Rule)
19
Q

Forms of Acceptance

A
  • A promise
  • An act, or a forbearance of an act
  • Anything else specified by the offer (if the offer specifies a form, it MUST take that form)
20
Q

Does silence count as acceptance?

A

No

21
Q

Capacity

A

the laws recognition that an individual has the mental authority to make significant binding decisions

22
Q

When are people provided the defense of incapacity?

A
    • Minors
    • Suffering from mental disabilities or defects
    • Intoxicated
23
Q

Consideration

A

the thing of value that each party exchanges in the contract

24
Q

Forbearance

A

a party agreeing to refrain from some action or forgo some legal right.

25
Q

Illegal Contracts

A

If parties enter into contracts that involve illegal activity neither party can seek enforcement or recission

26
Q

Three exceptions of Illegal Contracts

A
  • The contract is illegal because the law exists to protect one of the parties
  • One party is coerced, defrauded, or unduly influenced to participate
  • A party repents and rescinds before the illegal act is executed
27
Q

Statute of Frauds

A

certain types of contracts must be in writing

28
Q

What types of contracts are unenforceable unless in writing?

A
  • Contracts conveying real estate
  • Contracts worth over a certain dollar amount (usually $500)
  • Contracts that cannot be performed in less than 1 year
  • Contracts where marriage is part of the consideration
  • Agreements to be responsible for other people’s debts
  • Agreements to be the administrator of an estate
29
Q

Because the contract is intended to be the last word, outside evidence is inadmissible if offered to try to change the terms of the contract. When might outside evidence be admissible?

A
  • When agreements are incomplete (partially integrated) but only with respect to unaddressed terms
  • To prove fraud
  • To prove lack of consideration
  • To explain the meaning of ambiguous words
30
Q

Performance

A

Fulfilling the promise made in a contract

31
Q

Anticipatory repudiation

A

one party states an intention not to perform before performance is due

32
Q

Accord and Satisfaction

A
  • Parties might end up “settling” for less than they originally agreed to.
  • For example, a debtor who cannot pay the full amount might offer to pay off a portion (accord). If the creditor agrees and accepts payment in exchange for canceling the debt, you have satisfaction and the resulting compromise is enforceable – the contract has ended
33
Q

Warranty

A

a contractual obligation that sets the standard of performance – it is a guarantee of a certain level of performance

34
Q

Assignment

A
  • the transfer of rights
    • Roles – assignor and assignee
35
Q

Delegation

A

the assignment of duties

36
Q

When are rights non-assignable?

A

if doing so would significantly affect the corresponding duty

37
Q

When can you not delegate?

A

if there is a personal component in performance

38
Q

Breach

A

occurs when a party totally or substantially fails to perform their part of the contract

39
Q

Condition precedent

A

something that must occur before a duty to perform must take place

40
Q

Condition subsequent

A

something that can terminate a party’s obligation to perform

American Law (7 decks)

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