Contracts Flashcards

Question

Offer may be revoked

Answer 1

At anytime by the offeror Offeror may revoke offer through their conduct but the offeree must be aware of the conduct | Notice of revocation does not have to be communicated directly ## Footnote ex. Dickinson v. dodds

Answer 2

when acceptance is not the mirror-image of the offer ## Footnote A mere inquiry as to a change in the proposed offer does not constitute a rejection.

Answer 3

it is a rejection to initial offer and a counter offer The parties then switch and the counter offer extinguishes the intial offer

Answer 4

The contracting party which makes no objection, impliedly accepts any additional terms contained in the final counteroffer | Terms in the final counter offer are controlling

Answer 5

Acceptance occurs when the offeree sends their letter (acceptance) in the mail NOT when the offeror receives the letter

Answer 6

The offeror’s duty of performance under any option contract so created is conditional on completion or tender of the invited performance in accordance with the terms of the offer Ex. offered $100 to walk a mile and accepting. Starting the asked-for performance (walking the mile) creates an option contract Option contract b/c Offeree doesnt have to complete performance (dont have to walk the mile); and If the performance isnt completed, the offeror isnt obligated to do their part either (pay the $100)

Answer 7

Courts sometimes provide remedy to harmed parties despite there not being an enforceable contract

Answer 8

Drennan v. Star Paving (1958) General contractor may enforce a subcontractor’s bid not under contract but under promissory estoppel Hoffman v. Red Owl Stores (1963) Court awarded reliance damages to P despite the fact no final agreement was reached (due to the bad conduct of the defendant Channel Homes Center v. Grossman (1986) The parties had exchanged promises of value to another (letter of intent), there was sufficient consideration to support a binding agreement to negotiate in good faith

Answer 9

Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain. The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy. The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance. | Terms of contract should be definite ## Footnote ex. Sun printing & publishing Ass'n v. remington paper co. - Court held that the price was too vague because only a maximum price was set and a mechanism through which to reach a price each month, and in the event of disagreement between the parties, was not specified

Answer 10

Affirmative Defense Require that the following types of contracts be in writing 1. Executor-administrator provision 2. suretyship provision 3. marriage provision 4. land contact provision 5. one-year provision

Answer 11

Contract of an executor or administrator to answer for a duty of their decedent

Answer 12

Contract to answer for the duty of another most commonly concerns for the duty of another ## Footnote Langman v. alumni ass'n Statute of Frauds did not bar enforcement of the mortgage assumption clause because through its actions, the Alumni Ass’n had accepted the deed and its terms. And the Alumni Ass’n received a direct benefit and did not merely act as surety.

Answer 13

Contract made upon consideration of marriage

Answer 14

Contract made for the sale of an interest in land ## Footnote Does not include: Contracts concerning real estate agent commissions. Agreements to revoke a previous sale agreement.

Answer 15

Contract that is not to be performed within one year from the making thereof Oral agreement may come under the Statute of Fraud if, by its terms, the contract could not be performed within one year (e.g.: “over a period of two years, we will refurbish the community center). Even if, by its terms, an oral agreement could not be performed within one year, the agreement falls outside the Statute of Frauds (e.g.: “we will build the tallest building in the world”). ## Footnote ex. CR klewin v. flagship properties

Answer 16

Be evidenced by any writing; Signed on or on behalf of the party to be charged which; Reasonably identifies the subject matter of the contract; That is sufficient to indicate that a contract has been made by the parties or offered by the signor to the other party; and States with reasonable certainly the essential term of the unperformed promises in the contract.

Answer 17

If performance relates to what the contract is about ## Footnote Beacer v. brumlow- Departure from normal rule because Seller was a “laughing defendant” who fully admitted there was an agreement to sell and invoked Statute of Frauds to avoid liability.

Answer 18

Recovery traditionally limited to situations where person was falsely told, and reasonably relied upon the assertion, that Statute of Frauds did not apply. ## Footnote Ex.monarco v. Le Greco- estoppel was extended to situations where unjust enrichment or unconsciousable injury would occur if not for the court interference

Answer 19

Party may be deemed to only enter into voidable contract or voidable contracts

Answer 20

Under 18 yrs Can only enter voidable contract. An infant may void their contract with the other party at any time, but not vice versa. Infant would have to return whatever benefit and would have to pay for damage, wear and tear, etc. Infants cannot void out contracts for necessities!

Answer 21

A person may only be able to incure voidable contractual duties by reason of mental illness of defect *Must look at whether an action was actually so unreasonable that it could only be the result of mental illness* Congnitive test- meaning and effect of the words restatement test- nature and consequences of the transaction | mere weakness of mind body or both is not sufficient ## Footnote ex. ortelere v. teacher's retirement bd. cundick v. broadbent

Answer 22

a party's assent is induced by an improper threat by the other party that leaves the victim no reasonable alternative, the contract is voidable by the victim maybe be overt/improper threat, or economic duress (econ is debatable depending on the court)

Answer 23

If a party to a contract does what they’re already obligated to do in exchange for a modification of a contract, the modification will be voidable. ## Footnote ex. alaska parkers ass'n v. domenico- An agreement has been made without consideration when it is made for an already contracted-for performance.

Answer 24

rescission and modification ## Footnote Schwartzreich v. Bauman-Bausch, Inc. (1921) Courts found there were three contracts between the parties (initial contract, contract to terminate initial contract, and modified contract) so there was new consideration for modified contract. Watkins & Son v. Corrig (1941) Oral contract to pay nine times the initially agreed-upon price rescinded and modified the initial written contract, so defendant had to pay higher price.

Answer 25

unfair persuasion of a party who is under the domination of the person exercising the persuasion or who by virtue of the relation between them, is justified in assuming that person will not act in a manner inconsistent with his welfare if a party's acceptance was induced by undue influence by the other party, the contract is voidable by the victim

Answer 26

Whether discussions were conducted at an unusual or inappropriate time Absene of third-party advisors or insistence they not be present Insistence that the agreement be entered into ASAP

Answer 27

a statement which is not accord w/ the facts Material if it would induce a reasonable person to manifest their assent if the person makitng it knows it would likely induce the recipient to do so.

Answer 28

It is fraudulent (i.e.: when the maker makes this misrepresentation with the intent to induce assent) When a misrepresentation prevents formation of a contract (i.e.: when the misrepresentation concerns an essential term of the contract) When a misrepresentation makes a contract voidable (i.e.: when the recipient’s consent assent was induced by the misrepresentation)

Answer 29

Parties do not have a duty to disclose where they do not share a relation of trust and confidence (Swinton v. Whitinsville). But once a party starts talking, they must keep talking. If a party is asked a question, they cannot lie, but they’re not obligated to answer. ## Footnote Indirect communications can be misrepresentation, concealment, and non-disclosure.

Answer 30

Only one party is mistaken about a material aspect of the contract.

Answer 31

Both parties are mistaken about a material aspect of the contract.

Answer 32

Contract with latent ambiguities may be non-binding as the ambiguity means there was no meeting of the minds (Peerless ship case). Party may be obligated to complete not-quite impossible project if they were in a better position to discover latent defect (Stees v. Leonard). Could be avoided through renegotiation.

Answer 33

“Diamond in the rough” case A party bears the risk of their mistake if they enter into a contract with limited knowledge (related to subject of mistake) and treated their limited knowledge as sufficient. “Pregnant cow” case Parties both mistakenly believed cow was sterile and agreed to sale of sterile cow. Parties were both mistaken about basic assumption under which contract was made, so no meeting of the minds.

Answer 34

A "court of" equity may award specific performance as a remedy If you come to a court of equity, you must come from equity/have clean hands If you’re found to have been a bad actor, you cannot recover under an equity theory ## Footnote ex. McKinnon v. Benedict Tuckwiller v. tuckwiller

Answer 35

A contract where the parties are of unequal bargaining power and the contract is prepared by the party with greater bargaining power, effectively eliminating the ability of the less powerful party to negotiate Parties are typically bound by adhesion contracts even though there was no negotiation. Parties may argue that a term is suprising and should not be enforced | ex. O’Callaghan v. Waller & Beckwith; Housing crisis ## Footnote Can argue that term is surprising and should not be enforced Surprise must be objective/reasonable If it’s a term you should expect, cannot say it was surprising May be surprised at substance of term or existence of term

Answer 36

Some contracts are so substantively unfair that courts will refuse to endorse them. Unlike other doctrines, it looks at bad outcomes rather than bad processes. Unconscionability arguments rarely prevail, particularly where both parties are sophisticated parties. Remember Williams v. Walker-Thomas!

Answer 37

When one party breaches an enforceable contract, the other party will be entitled to a remedy based on the circumstances of the resulting loss or injustice. The court will award money damages, one or more equitable remedies, or some combo of legal and equitable relief ## Footnote Alternative to consideration, usually monetary

Answer 38

Specific performance may be awarded as a remedy for the breach of a contract for the sale of goods if a legal remedy would be inadequate Like when contacted, good is considered unique, hard to obtain through the market ex. Family heirloom ## Footnote Campbell soup co. v. wentz

Answer 39

To establish a reliance argument, the claimant must prove: 1. There was a promise to the promisee; 2. That the promisor should reasonably expect to induce action or forbearance of the promisee; 3.Which actually induced such action or forbearance from the promisee; 4.Because of which the promisee suffered a detriment; 5. And injustice can only be avoided by enforcing the promise. Claimant will receive reliance damages. ## Footnote last resort

Answer 40

actual amount the promisee has expended in reliance on the promise (Put the promisor in a position which she would have been had the contract not been made)

Answer 41

To establish a restitution claim, the plaintiff must prove: The defendant was enriched by their action; Retention of the benefit without payment would be unjust; and Injustice could only be avoided through the court’s action. relationship matters ## Footnote Callano v. Oak Park- shrubbery case

Answer 42

the actual benefit the promisee has conferred on the promisor ## Footnote Measured by The reasonable value to the other party of what he received in terms of what it would have cost him to obtain it from a person in the claimant’s position, or The extent to which the other party’s property has been increased in value or his other interests advanced.

Answer 43

expectation reliance restitution

Answer 44

As if contract had been fulfilled; puts individual in the position they would be in had promise been performed.

Answer 45

as if contract had not been made and loss based on reliance had not occurred.

Answer 46

as if contract had not been made and individual has restored to them any benefit they have conferred to the other party.

Answer 47

Requires victim of breach to take reasonable steps to limit the accrual of damages. ## Footnote Rockingham Cnty v. Luten Bridge Co.- construction company should not have completed work Parker v. Twentieth Century Fox- constructive service is permittable when

Answer 48

Limits damages to those foreseeable by promisor

Answer 49

Restricts a party's recovery to those damages that can be proven with sufficient certainty ## Footnote Precludes recovery for losses beyond those the evidence can estimate with reasonable certainty.

Answer 50

Parties may stipulate their own remedies can request, special action or money (amount of how to calculate) Parties may not stipulate punishment for breach *punitive damages are rarely awarded in breach cases Courts will usually honor the liquidated damages agreement ## Footnote ex. term agreements when breaking a lease (amount stipulated the breeching party will pay to get out of contract)

Answer 51

If a breach results in defective or unfinished construction and the loss in value to the injured party is not proved with sufficient certainty, he may recover damages based on *The diminution in the market price of the property caused by the breach, or The reasonable cost of completing performance or of remedying the defects if that cost is not clearly disproportionate to the probable loss in value to him