Contracts Flashcards
OFFER > UNILATERAL CONTRACT
The modern rule is that once the offeree
begins performance, an option contract is
created and the offeror may not revoke.
An offer may be revoked any time before
completion of the offeree’s performance.
FIRM OFFERS
A merchant can make a firm offer to buy or sell goods without consideration as long as the offer is in a writing signed by the merchant which explicitly states that it will be held open.
Firm offers are not limited to the sale of goods.
Consideration is not required for a firm offer that is in a signed writing. Such an offer, if it does not specify a period of time that it will be held open, is irrevocable for a “reasonable period of time.”
STATUTE OF FRAUDS
The majority of courts hold that an option to terminate a contract renders defeasance, not performance, possible within a year, thus the contract will still fall under the Statute of Frauds. A contract concerning an interest in land falls under the Statute of Frauds.
A contract concerning an interest in land falls under the Statute of Frauds.
A contract not performable within one year may be taken out of the Statute of Frauds either party has an option to terminate the contract within the year.
Lease agreements for a term not exceeding one year do not fall under the Statute of Frauds.
The Statute of Frauds does not apply to an agreement to form a partnership to conduct real estate transactions. Such a partnership interest is personalty.
A contract to assign or an assignment of a life, health, or accident insurance policy, or a promise to name a beneficiary of such a policy, must be in writing.
A promise to pay a commission for negotiation of a loan or for the sale of real estate or a business must be in writing, unless the party to be paid is an auctioneer, a licensed real estate
broker, or an attorney.
A writing is required for a promise to establish a trust or make or refrain from making a testamentary disposition.
Authority of an agent must be in writing and signed by the person to be charged if the contract made by the agent falls under the Statute of Frauds.
New York will enforce written agreements that prohibit modification or termination without a signed writing.
SIGNED WRITING AS SUBSTITUTE FOR CONSIDERATION
A promise to increase compensation
under an existing contract is an unenforceable modification to an existing
contract because no consideration is
offered for the modification.
A promise based on past consideration is binding if the consideration is expressed in a writing signed by the party to be charged, is proved to have been given or performed, and would be a valid consideration but for the time it was given or performed.
A promise to pay a debt discharged in bankruptcy is enforceable if in writing and signed by the promisor. Part payment will not substitute for a signed writing, but part payment of a contractual debt or written acknowledgment thereof will restart the statute of limitations.
No consideration is required to modify or discharge a contract or release a claim if the agreement is contained in a signed writing.
An assignment is enforceable without consideration if it is in writing and signed by the assignor.
EMPLOYMENT CONTRACTS
Employment contracts are presumed to be at-will, unless otherwise agreed by the parties. Employment coupled with a managerial or ownership interest may be terminated only for cause.
NON-COMPETE AGREEMENTS
Agreements not to compete for a certain period of time or in a certain area are generally enforceable, if reasonable.
Agreements not to compete are disfavored, and will be strictly construed.
An agreement not to compete will be enforced only if the employee’s services are unique, the clause is reasonable in time and scope, it is necessary to protect the employer, and it does not harm the public.
INFANCY
A husband and wife may not disaffirm on the basis of infancy with respect to loans, mortgages, contracts, or deeds on real property that they occupy or are about to occupy as a home.
ILLEGALITY
New York invalidates contract clauses that attempt to exempt contractors, caterers,lessors, and owners of parking garages, amusement parks, and gymnasiums from liability for negligence.
ASSIGNMENTS
An assignment is irrevocable if the assignee has paid value (or incurred bargained for legal detriment) for the assignment.
An assignment is irrevocable, even in the absence of consideration, if it is in writing and signed by the assignor or his agent.
New York prohibits assignment of any claim to recover damages for a personal injury.
ACCORD & SATISFACTION
By accepting a payment of less than the full amount of a disputed claim which is marked “paid in full,” the creditor accepts that there is consideration for an accord and satisfaction, and forgoes the balance of the claim.
A creditor may preserve his right to the balance of a disputed claim and avoid an accord and satisfaction by explicit reservation in his endorsement of a check tendered by a debtor as full payment.
UNSOLICITED GOODS
Under UCC Section 2-606, there is an acceptance of goods when the buyer does any act inconsistent with the seller’s ownership.
Retention of an unsolicited shipment of goods does not constitute acceptance, but the goods become an unconditional gift.
Where an offeree accepts the benefit of services with a reasonable opportunity to reject them, and circumstances indicate that payment is expected, he has accepted the offer.
IMPLIED CONTRACTS
Implied contracts for the division of property or income between an unmarried couple living together will not be recognized.
STATUTE OF LIMITATIONS
The statute of limitations for breach of
contract is six years.
WAIVER OF WARRANTIES
Words or conduct relevant to the creation of an express warranty and words of conduct tending to negate or limit warranty shall be constructed wherever reasonable as consistent with each other. Negation or limitation of an express warranty is inoperative to the extent that such construction is unreasonable.
Where an express warranty conflicts with a limitation or disclaimer, the express warranty will prevail.
New York follows the MBE rule on waiver of warranties, both express and implied.
