Contracts Flashcards
Contract modification
Common law- requires consideration
UCC- good faith only
Types of contracts for Statute of Frauds (M.Sour)
Marriage
Suretyship
One year (to complete)
UCC- $500 or more
Real property
Contract types and governing law
Common law- services and real estate
UCC- goods
Promissory estoppel
-Promise made/ reasonably expected to induce reliance.
- detrimentally relied on promise
-injustice can only be avoided by enforcement of promise
Irrevocable offers
Option
Firm offer
Unilateral contract- offeree started performance
Detrimental reliance
Mailbox rule
Acceptance sent by mail is effective when letter is sent except:
-offeree sends something first (rejection or counter)
-other types of communication (revocation/rejection)
-option contracts
-unclear whether it applies to other media (fax/email)
What terms need to be in the contract for both kinds?
Common Law- all essential terms
UCC- quantity. Both parties intend to contract and there is a reasonable certain basis for giving a remedy.
Offer
Objective manifestation of a willingness by the offeror to enter into an agreement that creates the power of acceptance in the offeree
Express contract
Words express intent of the parties
Implied in fact contract
Conduct indicates assent or agreement
Acceptance
Objective manifestation by offeree to be bound by the terms of the offer
UCC firm offer
Offer to buy or sell goods is irrevocable if:
-offeror is merchant
-an assurance that the offer is to remain open; and
-assurance is contained in a signed writing from the offeror
(No consideration needed and no more than 3 months open)
Doctrine of substantial performance
A party who substantially performance recover on the contract even though full performance has not been tendered. (Not valid in material breach scenarios)
Parol evidence rule blocks…
Terms that conflict each other. Look for terms not in the writing
Requirements contract
Exclusive agreement between buyer and seller. Duty of good faith and fair dealing and requires buyer to purchase goods from seller only.
Minor breach (common law)
Breaching party substantially performed. Non breaching party must still perform under contract. Generally, substantial performing party can recover the contract price minus cost to other party of obtaining full performance.
Material breach- common law
Non breaching party doesn’t receive the substantial benefit of the bargain. Allows the non breaching party to withhold any promised performance to purse remedies for breach, including damages. Breaching party who failed to sub. Perform cannot recover damages except maybe restitution as long as breach wasn’t willful.
What is the general measure of damages for a contractor’s failure in construction contracts?
The difference between the contract price and the cost of construction by another builder, plus any progress payments made to the breaching builder and compensation for delay in completion.
What happens if a breach results in defective or unfinished construction?
A court may award damages equal to the diminution in the market price caused by the breach if fixing or completing the construction would result in economic waste.
What is economic waste in the context of construction damages?
Economic waste occurs when the cost to fix or complete the construction is clearly disproportional to any economic benefit or utility gained as a result. Courts may reduce payment by diminution in market value instead.
Fill in the blank: The general measure of damages includes compensation for _______.
delay in completion
Assignment (and exceptions)
Transfer of rights under a contract. Valid so long as there is a present intent to transfer contractual rights. No consideration required.
When made without consideration- gratuitous assignment- it is removable by assignor unless:
-Obligor performed
-Document symbolizing the assigned right delivered to assignee
-Written assignment signed by assignor has been delivered to assignee or
-Assignee detrimentally relied on assignment
