Contracts Flashcards
Is a merchant’s firm offer revocable or irrevocable?
No, even if there was no consideration was given up.
What is an implied in-fact contract?
Where the conduct of a party creates a contract.
Ex. Patient/doctor situation
Is an express contract written or oral?
Both
Who can enforce/create a quasi-contract?
The courts
What is the mailbox rule?
When the offeree MAILS the acceptance, the acceptance is considered to be received.
List some elements to contract formation.
- Offer
- Acceptance
- Consideration
- Capacity
- Mutual agreement
- Proper form (some must be written)
List some defenses to formation of a contract
Fraud or misrepresentation illegality incapacity undue influence duress unconscionability mistake indefiniteness
If a party terminates an offer before the offeree accepts it, is a contract formed?
No
Unless contract is unilateral, an option contract, or a merchant firm offer.
Name the ways an offeree can reject an offer
- Expressly
- Time lapse
- Counteroffer
Offers can be terminated by operation of law. List some examples.
Destruction or sale of subject matter
Illegal subject matter
Death of one of the parties
Insanity of one of the parties
What is consideration?
A promise for a promise (simply put)
List 3 forms of a bargain
Payment of cash
Payment of some other property
Time commitment
Action
Difference between void and voidable contract?
VOID
Unenforceable by either party
Essentially, when contract is illegal or impossible. Cannot be ratified by either party.
VOIDABLE
A legal contract, but one party has the right to cancel
I. Order for there to be a contract, both parties have to do something or give up something- T or F?
True
List 3 ways an offeror can revoke an offer
- Direct communication
- Indirect communication (must involve a reliable source to revoke. Offeree needs to clearly understand and accept revocation).
- Effective publication
One remedy for a breach of contract is discharge of a contract - T or F?
True
List 3 types of contract breach
Material breach
Anticipatory breach
Minor breach
What is a material breach?
One party’s failure to perform its contractual duties.
The non-breaching party can sue for damages, compel performance or discharge the contract.
What is an anticipatory breach?
When a party has a clear indication the the other party won’t perform its duties under the contract.
Resolution options include discharging the contract, suing for damages, or waiting to see what happens.
What is a minor breach?
Breach is immaterial.
Party who was breached can sue, but cannot discharge contract.
Other options include rescission, and reformation.
Name 3 types of damages that a contract breacher could be responsible for.
Compensatory
Specific performance
Punitive
List 3 elements of an offer
Seriously intended
Communicated to offeree
Definite in terms
List 3 elements of acceptance
Must be unconditional (under common law -Adding a condition creates a counter offer).
Must be communicated by words or actions
Must be accepted by offeree
Can offers be open-ended?
No
List the 3 ways an offer can end.
Counter offer (common law)
Rejection
Revocation
Under common law, can an offerer revoke an offer before acceptance?
Yes
When do offers end?
After stated time
If no stated time, after a reasonable amount of time
What is a bilateral contract?
What is a unilateral contract?
Promise for a promise
Promise for an act
Promise has to induce the act
What are the 6 types of contracts that must be in writing according to the Statute of Frauds?
Goods $500 or more Real Estate Marriage Contracts > 1 year A promise to answer a debt of another Executer's promise to be liable for the debt of an estate
What types of people does “capacity” acknowledge?
Minors
Insane
Inebriated
Under the eyes of the law, are minors considered competent to create a contract?
No
They can disaffirm a contract anytime while a minor, and a reasonable amount of time afterwards, once an adult.
How drunk does an inebriated person have to be to disaffirm a contract?
Very. If they understood the contract while inebriated, they cannot disaffirm.
What are the 4 elements of a fraud charge.
Misrepresentation of material fact
Reasonable reliance by the injured party
Intent to mislead -scienter
Results in injury or damage
What are the 4 elements of a gross negligence charge?
Material misstatement
Reasonable reliance by injured party
Reckless disregard for the truth
Results in injury or damages
Fraud in the inducement creates what kind of contract?
Voidable contract
Fraud in the execution creates what kind of contract?
Void contract
List 2 defenses to breach of contract (that would void the contract)
Undue influence
Duress
List contracts that can’t be assigned or delegated
Insurance contracts
Personal Services contracts that requires a special skill
If assignment materially increases risk or duties for other party
If the contract prohibits assignment
Most contracts are assignable-example is a mortgage contract that gets reassigned to different banks
What is parol evidence
Facts outside a contractual agreement that may be used to interpret the agreement.
