Contracts

Question 1

Everyday Contract

Answer 1

Exchange of things of value

Question 2

Elements of a contract

Answer 2

Offer, Acceptance, Consideration

Question 3

Bilateral Contracts

Answer 3

A promise for a promise

Question 4

Unilateral Contracts

Answer 4

Promise for an act, acceptance by completion of requested act, if act isn’t fully completed promise can be pulled out of at any time, most courts will uphold contracts that have substantial completion

Question 5

Void Contracts

Answer 5

Without legal effect from the start, ex. agreement to commit crime

Question 6

Voidable Contracts

Answer 6

One or both parties may elect to void or ratify contract, ex. sign at 17 but void or ratify once 18

Question 7

Unenforceable Contract

Answer 7

Otherwise valid, but not enforceable due to various defenses (Some contracts need to be in writing)

Question 8

Creation of a Contract (3 Questions)

Answer 8

Was there mutual assent (offer and acceptance)?
Was there consideration (value)?
Are there any defenses?

Question 9

Meeting of the minds

Answer 9

Agree to the same terms of a contract at the same time

Question 10

Objective Measure

Answer 10

What would a reasonable person believe the offer and acceptance is, required when forming a contract

Question 11

Offeree

Answer 11

Power of acceptance

Question 12

Offeror

Answer 12

Corresponding Liability

Question 13

Intent

Answer 13

Language, circumstances, prior practice

Question 14

Legal Offer Requires

Answer 14

Definite terms, identity of offeror/offeree and the subject matter, price, time of payment, delivery or performance, quantity, nature of the work, communication to the offeree

Question 15

Acceptance

Answer 15

Reasonable and unequivocal (strong yes or no), action can be acceptance

Question 16

Mirror Image Rule

Answer 16

Terms of the acceptance must perfectly match the terms of the offer (any change of terms is rejection and a counter-offer)

Question 17

Termination by Offeror

Answer 17

Revocation (terminates power of acceptance), taking back offer, effective when received

Question 18

Termination by Offeree

Answer 18

Rejections (counter-offer or express), lapse of time (specified time period or reasonable time

Question 19

When does termination happen?

Answer 19

Before acceptance

Question 20

Termination by Operation of Law

Answer 20

Death or adjudicated incompetent terminates, subject matter of contract is destroyed, legislation makes contract illegal

Question 21

Consideration

Answer 21

Needs offer and acceptance beforehand

Question 22

Valuable consideration

Answer 22

Change in legal position between the parties (agreeing to do or not do something) (Giving up legal right)

Question 23

Elements of Consideration

Answer 23

1) Bargained for exchange between the parties (promise and detriment)
2) Must have legal value (mutual benefit, economic value not required, past or moral acts are insufficient)

Question 24

Contract Defenses

Answer 24

Void or voidable, fraud, undue influence, duress, statue of frauds

Question 25

Void or Voidable if

Answer 25

Illegal subject matter, lacked capacity (minors, incompetent), mistake of material fact (If both parties made a mistake then voidable, can't void if only one party was mistaken)

Question 26

Fraud

Answer 26

Saying something knowingly false to get them to agree to contract, makes it so you aren't engaging in the same contract (no meeting of the minds)

Question 27

Undue Influence

Answer 27

Violating position of trust, forcing into agreement

Question 28

Statue of Frauds

Answer 28

Contracts that must be in writing

Question 29

Agreements that must be in writing

Answer 29

Sale of real property or land Collateral promises to pay the debt of another Sale of goods $500+ Contract which by its terms cannot be performed within one year

Question 30

Essential Terms in Written Contracts

Answer 30

Identity of the party against whom enforcement is sought subject matter terms and conditions consideration signature of the party to be charged

Question 31

Discharged

Answer 31

Contract has been forgiven or completed

Question 32

Failure of a Condition

Answer 32

Can't meet a condition of the contract, the contract goes away

Question 33

Discharge by supervening Illegality

Answer 33

Contract becomes illegal by new law

Question 34

Impossibility in Contract

Answer 34

Unanticipated event happens after contract is finalized that makes it impossible to complete (can't pain house if it burns down)

Question 35

Impossibility if someone dies

Answer 35

If dies or is incapacitated contract is discharged only if person is necessary to contract, if not contract stands

Question 36

Objective Test

Answer 36

Reasonable person standard

Question 37

Discharge by Impracticability or Frustration

Answer 37

Unanticipated events, performance becomes extremely difficult or expensive, purpose of K is nearly or is destroyed

Question 38

Discharge by Rescission

Answer 38

Legally terminated through mutual agreement

Question 39

Breach of Contract

Answer 39

1) Duty to perform 2) failure to perform in accordance with contractual terms

Question 40

Material Breach

Answer 40

Something of significance

Question 41

Breach Remedies

Answer 41

Compensatory Damages, Expectation Damages, Reliance Damages, Consequential Damages

Question 42

Compensatory Damages

Answer 42

Money

Question 43

Expectation Damages

Answer 43

Standard measure of, place plaintiff in the position they would have been in if defendant have performed

Question 44

Reliance Damages

Answer 44

Place plaintiff in the position they would have been in had K never been formed

Question 45

Consequential Damages

Answer 45

damages, losses, or injuries that result naturally, but not necessarily directly from the contract

Question 46

Equitable Remedies

Answer 46

When legal remedy is inadequate, Specific Performance, Recission and Restitution

Question 47

Specific Performance

Answer 47

Court order to perform K, subject matter of the K is rare or unique (land is unique), not for service contracts

Question 48

Recission and Restitution

Answer 48

The non-breacher may cancel the K, appropriate where the non-breacher has attempted to perform or transferred a benefit (want full money back)

Question 49

Quasi- Contract

Answer 49

K was never created but court created K in the interest of fairness

Question 50

For Quasi-contract must show...

Answer 50

Plaintiff conferred a benefit to defendant Plaintiff has a reasonable expectation of compensation Defendant will be unjustly enriched (Doctor treating unconscious patient)

Question 51

Exception to the Privity of Contract Doctrine

Answer 51

The K is private or exclusive to the people that entered into it, explicitly states who is to be beneficiary

Question 52

Intended Beneficiary

Answer 52

One or more of the below 1) Performance rendered to beneficiary 2) Beneficiary can control details of performance 3) Beneficiary is expressly designated in the K

Question 53

Can a 3rd Party Beneficiary sue over K?

Answer 53

Yes, if in case of breach 3rd party can sue the party who made the promise that benefits the 3rd party