Contracts Flashcards
Quasi contract
An unenforceable contract results in unjust enrichment
Recover through restitution
Unilateral contracts
Payment upon completion of requested act
1) offeror clearly indicates that completion of performance is the only manner of acceptance (offer…only by)
2) offer to public - reward
Void, Voidable, Unenforceable
Void - can never be enforced
Voidable - may elect to avoid
Unenforceable - otherwise valid but unenforceable due to a defense
Merchant
one who regularly deals in goods of the kind sold or who otherwise by their profession holds themselves out as having special knowledge or skills as to the practices and goods involved
Must be acting in their mercantile capacity
Mutual assent
Offer and acceptance
did the words or conduct manifest a present intention to enter a contract
Elements of a contract
Mutual assent - offer and acceptance
consideration
no defenses
Offer
Communication from offeror to offeree that creates a reasonable expectation in the offeree that the offeror is willing to enter into a contract on the basis of the offered terms
Promise, undertaking, or commitment to enter into a contract
essential terms
Advertisement
Mere invitation for offers unless it contains a quantity term
Essential terms
Identification of offeree
Subject matter
- real estate: land and price
- sale of goods: quantity (article 2 supplies reasonable price at time of delivery if not specified)
- services: nature of the work
if material term is vague or ambiguous - not an offer
Requirement or output contracts
Promise to buy all goods required or promise to sell all good produced
implied good faith
cannot be unreasonably disproportionate to any stated estimate or any normal or comparable requirement/output
Termination of offer
By act of either party (effective when received or published) or operation of law
By offeree: lapse of time (stated or reasonable), rejection (express or counteroffer)
By offeror: revocation (direct, by publication of comparable means, indirect with correct information from a reliable sources of acts what would indication that the offeror no longer wishes to make the offer)
Operation of law: death or insanity of either party (unless irrevocable), destruction of subject matter, supervening illegality
Conditional Acceptance
cannot be accepted by performance
If perform: contract created BY THEIR CONDUCT, and the new terms are not included
Irrevocable offers
1) options - gives consideration for promise not to revoke
2) merchant’s firm offer - merchant offers to buy or sell goods in a signed writing and writing gives assurance that it will be held open (irrevocable for no more than 3 months)
3) detrimental reliance - reasonable expect to rely to detriment and does rely, treated as option for reasonable length of time
4) Beginning performance of unilateral contract offer
Acceptance
Manifestation of assent to the terms of the offer
offeree must know the the offer
Bilateral contract - beginning of performance or promise to perform
unilateral contract - completion of performance
Battle of the forms
Common law - mirror image rule
UCC - no mirror image, seasonable expression of acceptance unless acceptance is expressly made conditional on assent to additional terms
UCC contract with nonmerchant - terms of offer govern unless express agreement
UCC contract between merchants - additional terms included unless
- materially alter original terms
- offer expressly limits acceptance
- offeror objects in reasonable time
conflicting terms knocked out, some jurisdictions treat the same as additional terms
Effectiveness of acceptance and termination
Mailbox rule - acceptance generally effective when dispatched
Exceptions:
- option contract - when received
- offer stipulates when received
- rejection send first - whichever is received first
- rejection send after but received first - estopped from enforcing if offeror detrimentally relied
- unauthorized means - may be effective when received
termination effective when received
Auction contract
sale complete by call of hammer
with reserve (auctioneer may withdraw goods at any time until he announces completion of sale) unless explicitly say without reserve
Consideration
Bargain for exchange of legal value (promise induce benefit to promisor or detriment to promisee)
Past consideration not valid
- promise given in exchange for something already done
Preexisting duty not valid
-performing or promising to perform an existing duty
-exceptions: new or different consideration, ratify voidable obligation, owed to third party, honest dispute as to duty, unforeseen circumstances, modernly is fair and equitable in light of circumstances not anticipated
-UCC - only need good faith to modify
need mutuality - cannot be illusory
Promissory estoppel/detrimental reliance
Consideration not necessary - estopped from not performing
promisor should reasonably expect to induct action or forbearance and action or forbearance is in fact induced
usually reliance damages
Defense: Lack of Capacity
Minors: can disaffirm any time before or shortly after reaching age of majority, unless necessity then liable for restitution of reasonable value
mental incapacity: so deficient that incapable of understanding the nature and significance of a contract - voidable, unless under guardianship, then void
intoxication: so intoxicated, cannot understand nature and significance of their promise - voidable if other party had reason to know
duress and undue influence: voidable
- economic duress is not duress unless party threatens to commit a wrongful act that would seriously threaten the other party’s property or finances, and there are no adequate means to prevent the loss
Defense: Absence of mutual assent
misunderstanding/ambiguous contract:
- neither or both parties aware - no contract unless both had same meaning
- one party aware - contract based on unaware party’s understanding
mutual mistake: voidable if mistake of material fact and moving party did not assume the risk (usually not mistake of value)
Unilateral mistake: not a defense unless the other part knew or had reason to know
Misrepresentation: voidable if justified reliance on a material fact
Defense: Illegality
Illegality of consideration or subject matter - void
Exception: P does not know of illegality and it is a failure to obtain a license required revenue raising purposes
if only purpose is illegal, voidable by party unaware of the purpose or was aware but did not facilitate the purpose and the purpose does not involve serious moral turpitude
Defense: Unconsiounability
Unfair surprise or oppressive terms at the time the contract was formed
Defense: Statute of Frauds
Must be evidenced by writing signed by the party sought to be bound: MY LEGS
Marriage as consideration
Year - more than a year
Land: Interest in land
- equal dignity rule, iif underlying deal is under SoF, most be in writing (authorization of agent to sell ranch must be in writing)
Executor: promise to personally pat estate debts
Goods: $500 or more
-Exceptions: SWAP
-specially manufactured goods- substantial beginning
-Written confirmation between merchants
-admission
-performance
Suretyship: promise to pay debt of another, unless serves pecuniary interest of his own
Defense: promissory estoppel
