Contracts Flashcards
What is a bilateral contract?
an agreement between two parties who both make promises
To have a contract, both parties must intend to:
be legally bound by the contract
What does consideration require?
the exchange of something of value
What are the elements of consideration
promise and act or forbearance
What is forbearance?
When a party refrains from an act may constitute consideration
Past consideration does not constitute consideration if:
it was offered before the contract was formed
What is the pre-existing duty rule?
An existing duty to perform under a prior agreement that is being offered as performance in a subsequent agreement is not consideration
Forbearance is not consideration if:
the forbearing party already lacks the legal entitlement to take the action (Teenager agrees not to drink but this is not consideration because he couldn’t legally drink)
Modification to an existing contract w/o consideration is unenforceable unless:
It is fair and equitable in light of unforeseen circumstances that were not anticipated
If it alters the parties’ duties under the existing contract
The adequacy of consideration is not an issue unless
the amount of consideration is nominal (5¢)
What is an illusory promise?
An apparent promise that does not amount to consideration because the promisor reserves a choice for alternative performance
Courts determine meaning based on:
terms
intent
purpose
circumstances
terms that reopen or uncertain
indefinite terms
If the indefinite terms are essential then the contract is
void
If the indefinite terms are minor, then the court interprets it to mean what is
customary or reasonable
Terms that have multiple meanings or there is a misunderstanding between parties
ambiguous
If both parties have the same meaning for ambitious terms, then the court will _____ the contract
enforce
extrinsic evidence can’t be used to modify or supplement a written contract
parol evidence rule
Parol evidence rule only pertains to
written agreements that are integrated
writing that has been adopted by the parties as a final and complete statement of the terms
completely integrated agreement
writing that has been adopted by the parties as a final but incomplete statement of the terms
partially integrated agreement
Can sue for remedy if:
- There’s a material breach
- Anticipatory repudiation
- Prospective inability to perform (w/o assurance)
