Contracts Flashcards
acceptance
expression to enter a contract based on the terms of the offer - when an offeree agrees to offeror’s terms
offer must be accepted only by person to whom it was directed
wording must match that in offer (usually)
valid when sent
Capacity
mental capacity to understand the nature and terms of the contract
Compensatory damages
most common remedy for breach of contract. designed to pay the nonbreaching party for the amount of loss that has been suffered.
Contract
promises that the court will enforce
Elements: 1. Offer 2. Acceptance 3. Consideration 4. Legal capacity 5. Legality
Types: 1. Express (specifically stated) 2. Implied 3. Executed (fulfilled) 4. Executory (terms not fully performed) 5. Unilateral (one party may choose whether or not to perform) 6. Bilateral 7. Voidable 8. Void
Formation defenses
actions that invalidate what otherwise would be mutual assent (duress, fraud, mistake, undue influence).
Minor
person younger than the legal age to enter a binding contract. a minor’s contract is voidable by the minor
Mirror Image Rule
an acceptance must precisely reflect the offer to be a valid acceptance
Mitigation of damages
nonbreaching party has the obligation to keep losses as low as possible
Mutual assent
parties have voluntarily come to a common understanding of the terms of the bargain. combination of a valid offer and valid acception
offer
expression of party’s willingness to enter into a contract (valid when received)
A. Intent: objective (reasonable) standard, subjective intent or promises made in jest are not considered
B. Definite and/or Certain: sufficient specific terms so both parties know what their obligations are
C. Communicated: offer is effective as transmitted (mistakes in transmission are offerers’ risk
Parol evidence rule
prevents introduction of evidence that contradicts the language of a written contract
Promissory estoppel
implied contract at law, where a court rules that a contract exists even though an element of the contract is missing
Specific performance
a remedy that is available where money damages would not be adequate to compensate the nonbreaching party. (breaching party must perform the original promise under contract)
Statute of Frauds
Requires certain contracts be in writing or have written evidence to support the contracts’ existence (real estate transactions, contracts that cannot be performed in under one year, answer for debts of another party, sales of goods for $500 or more)
Contract must be signed by the party charged (party we are seeking to hold liable)
Part performance typically satisfies Statue of Frauds
Exceptions: specially manufactured goods, if a party admits contract agreement in court, goods that have been paid for or accepted
Void
contracts not enforceable by law
