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1L- final review > contracts > Flashcards

contracts Flashcards

1
Q

What is a contract (K)?

A

An agreement b/w two or more parties with legal effect

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2
Q

Mutual assent

A

“meeting of the minds”- intent to be bound

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3
Q

Building blocks of a contract?

A

offer
acceptance
consideration (legal effect)

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4
Q

what is an offer?

A

Offer is the manifestation of intent to enter a bargain by words or conduct,

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5
Q

Analysis: is there an offer?

A
  • Can be accepted by the party to whom communicated
  • Must be communicated
  • Both parties must manifest content
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6
Q

what can terminate an offer?

A
  • Death of incapacity
  • Rejection from the offeree
  • Lapse of time
  • revocation from offerer
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7
Q

What are NOT consider an offer?

and what are the exceptions?

A

ads
circulars
form letters

Exceptions (look at the language):
“First come, first serve”
“While they last”
Subject to proof of sale
Reward offer- only typically for one person
-public policy (e.g. “bait/switch)
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8
Q

termination of the offer by rejection?

A

Offeree rejects offer

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9
Q

counteroffer

A

an offer terminates the initial offer and presents another offer

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10
Q

common law- mirror image rule

A

acceptance must mirror offer- otherwise offer response is a counteroffer

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11
Q

grumbling acceptance

A

a compliant about the offer
-“the price is too high”
-“Cant afford to pay that”
does NOT terminate the offer

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12
Q

inquiry

A

asking the offeror about changing the price of the offer-

This does NOT terminate the offer

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13
Q

termination of the offer by revocation?

A

by the offeror-
an offer can be revoked at anytime before acceptance and must be communicated

anytime before acceptance- even if offeror says offer is to Remain open

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14
Q

comparable medium

A

use the method of communication

-some room to differ

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15
Q

Bilateral K

A

promise for promise- RESTATEMENT 2d 87- reliance

Return promise may inferred from beginning or preparation for performance

notice: is not require
performance is accepted

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16
Q

Unilateral K

A

promise for a performance- RESTATEMENT 2d 45

Pomissor not bound until promisee performs
Promissee never became bound to perform (no “mutuality of obligation”)

If offeror seeks performance and offeree has tendered or began performance offeror, it cannot be revoked

notice is not required
but when in a reasonable time after completetion

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17
Q

acceptance

A

Manifestation of assent to the offer

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18
Q

acceptance in Bilateral K

A

notice is required

Beginning performance is OKAY for acceptance

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19
Q

acceptance in Unilateral K

A

Generally not required—-EXCEPT if performance will not quickly come to offerors attention, offeree must notify within a reasonable time after completing performance.
Offer is accepted when performance is completely accepted

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20
Q

Option Contract (K)

A

A Contract with consideration Given to have offer left open-
Generally but not always money

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21
Q

Silence is…?

A

is NOT acceptance

General rule: offeror dictates terms of the offer but cannot have silence as acceptance unless agreed upon

-Offeree may be bound by other principles:
Dominion and control- using as the true owner
Pattern or practice- repetition of practice
Agreed silence- keeping for a trial use and not cancelling

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22
Q

Mailbox rule?

Exception?

A

General rule: acceptance is effective when it is mailed, Must be reasonable means and properly mailed
EXCEPTION: “Must be rec’d by”
NN: effective even if it never received by offeror

exception: Offer says, “I must receive it by” or Effective when received

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23
Q 
Vacillating offeree
Example 1:
Acceptance mailed 
Rejection sent (mailed, fax,etc)
Rejection rec’d
Acceptance rec’d
A

If offeror relies on rejection- offeree is estopped from asserting mailbox rule(stating there’s K)- NO K

Offeror has the option to choose K or no K

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24
Q 
Vacillating offeree
example 2
Acceptance mailed
Rejection sent
Acceptance rec’d
Rejection rec’d
A

Mailbox rule applies-there a K

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25
Q 
Vacillating offeree
example 3
Rejection mailed
Acceptance mailed
Rejection or acceptance rec’d
A

Mailbox rule does not apply- first to arrive

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26
Q

exceptions to an offer can be revoked at anytime before acceptance

A

Option K
Firm Offer
Unilateral k
Sub- contractor/General K

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27
Q

Bid shopping

A

GK seeking lower bids from other SK after award of open K- SK is bound,GK is not

-SK has an argument GK did not accept in a reasonable amount of time

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28
Q

Bid chopping

A

GK seeking lower price from SK

SK: GK response was a counteroffer that terminated SK offer

29
Q

UCC 2-205- K

A

An offer by a merchant to buy or sell goods in a signed writing by its terms gives assurance that it will be held open and it will not be revocable for lack of consideration during the time stated or if no time stated for a reasonable time, but in no event may such period of irrevocability exceeds 3 months.

30
Q

Unilateral K- RESTATEMENT 45

A

Once the offeree begins or tenders performance the offeror cannot revoke

31
Q

Subcontractor/generalcontractor

A

GK relying on SK bid in the offer
Reliance on offer Bilateral K
Offer which the offeror should reasonably expect to induce reliance before acceptance and substantial reliance induced enforceable to the extent necessary to avoid injustice
Offeree must reasonably rely (variance)

32
Q

2-207- Acceptance of offer (battle of the forms)

Subsection 1

A

A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time

under subsection 1
operates as an acceptance even though it states terms additional to or different from those offered or agreed upon.
- UNLESS- acceptance is expressly made conditional on assent to the additional or different terms

33
Q

2-207- Acceptance of offer (battle of the forms)

subsection 2

A

(2) The additional terms are to be construed as a proposal for additional to the contract. Between merchants such terms become part of the contract

UNLESS:

  1. the offer expressly limits acceptance to the terms of the offer (look at the language)
  2. They materially alter it (hardship or surprise); or
  3. Notification of objection to them has already been given or is given within a reasonable time after notice of them is rec’d
34
Q

2-207- Acceptance of offer (battle of the forms)

A

207 (3)
Conduct by both parties recognized existence of a K is sufficient to establish K, for sale although
Mixed goods/service K

35
Q

Test: K predominantly for goods(UCC) or service(CL)

A

Factors:
-Language

  • Nature of business
  • Intrinsic value of materials greater cost alone is not sufficient enough
36
Q

agreement to agree

A

Postponed bargaining or indefiniteness

37
Q

Clickwrap

A

Must click “I agree” to use software, access programs, etc

38
Q

Browsewrap

A
  • Use of the site is agreement to terms
  • Not required to “accept”
  • Terms and conditions not readily apparent to the user
39
Q

Shrinkwrap

A

Sellers terms and conditions are inside package once product is purchased and opened

Keeping product usually indicates acceptance of terms

40
Q

Consideration

A

= legal effect to the contract- You can’t get something for nothing

41
Q

Bargain for exchange- R2d 71

A

a performance or return promise bargained for if its sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise (DEFAULT)

42
Q

Consideration analysis- bargain for exchange r2d-71

four parts- if one or more is missing then its not considereration

A
  1. What is the Promise by promisor?
  2. Promise or performance sought by promissor?-
  3. Promise or performance/forbearance by promisee?
  4. In exchange for promisor’s promise?
43
Q

Bargaining

A

consideration is present and thus you have an enforceable promise

44
Q

Gift with condition attached

A

gratuitous promise- generally unenforceable-

45
Q

Benefit test: benefit to promisor?

A

If benefit is to the promisor, the inference is that the promise or performance was bargained for.

If no, inference is that promise or performance is conditioned to receipt of gift

46
Q

past consideration

A

not consideration AT ALL!
Performance occurred before promise and thus not bargained for- if no consideration , then UNENFORCEABLE
May constitute as gratuitous gift

47
Q

Forbearance as consideration

A

forbearing someone from doing something they can legally do

  1. Genuine disputed and
  2. P asserted claim in good faith
    The court will uphold the agreement to s
48
Q

Performance to third party and not promisor

A

Buyer is still liable to the seller even though the seller performed to a third person

49
Q

“Peppercorn theory”-

A

the value of the consideration
Virtually anything can serve as consideration if bargained for
Courts generally do not inquire into the adequacy of consideration
Gross inadequacy may be evidence of fraud, duress, etc
Treated as no consideration

50
Q

Illusory promises

A

not enforceable promise- being able to end at anytime- no time stated
Promissory language but party not bound
party has complete discretion

51
Q

Illusory promises- three contexts

exception:

A
  1. Terminations clauses
    Exception: if notice is required- its not illusory
    At will employment will be enforceable
  2. Distributorship
    A gives B exclusive right to market goods, B promises to do so but no time stated
  3. Output contracts
    Output (requirement K’s)
    Historically, illusory because no stated amount
    Today, governed by UCC good faith provision

exception:
NN: not illusory if notice requirement
Exception: at-will employment K

52
Q

Promise v expression of future intention

A

Ex: “ I will give you car”
“We intend to employ 200 workers”
Look at context & why its being used
Circumstances and context

53
Q

Implied promise

A

does not need to be expressed- Promise can be inferred from conduct- Havey v Dow

54
Q

Promissory Estoppel

A

enforcing the contract without consideration- promise is foreseeably relied upon

Unbargained for reliance on a promise
Relied on detriment for one party
Application:
family and social setting
Most likely commercial setting to lesser extent
Consideration analysis and Promissory estoppel arise from the same fact

55
Q

From equitable estoppel to promissory estoppel

A

Historic view- gratuitous promises are unenforceable, even if relied upon
Equitable estoppel-remedy for representation of fact relied upon
Example: party represents that she owns the show business even though she does not
Party’s promise is enforceable NOV(stopped from stating) no consideration bc reliance upon estops her from asserting no consideration

56
Q

Promissory Estoppel -R2d 90

A
  1. A promise by promisor
  2. promise reasonably expect to induce action or forbearance on the part of the promisee or a third person
  3. promise induced such action or forbearance

4 enforcement of promise is necessary to avoid injustice

57
Q

Promissory Estoppel- Rest 90

A
  1. A promise by the promisor
  2. promisor reasonably expect promise to induce definite and substantial action or forbearance (reliance)
  3. Promise induced action or forbearance

4.enforcement of the promise necessary to avoid injustice
(Discretionary)

58
Q

Charitable pledges

A

R-90- charitable pledge enforceable w/o proof of reliance
Not widely adopted
Analysis starts with consideration or promissory estoppel
Generally, gratuitous promises- No bargaining

Is a pledge gratuitous promise w/ condition attached or bargain for exchange
E.g A says to B: “ Im donating $30M for a building to be named in my honor.”

Benefits test:

Gift with condition- condition of just putting the name on the building
Is A getting a benefit from having her name on the building?

Argue both sides

59
Q

Promissory estoppel in a commercial context

do the same promissory estoppel analysis

A

Expanded to commercial setting mainly applying to employee benefits and pensions- previously given as a gift in the past

same promissory estoppel analysis

60
Q

Restitution

A

avoidance of unjust enrichment-
a party is unjustly enriched at another’s expense required to make restitution
Recipient who knew provider of service expects to be paid is liable for reasonable value
The services are generally unrequested

Service is presumed to be gratuitous if its an emergency
Presumption is rebutted if the service
Is professional
Unduly burdensome

61
Q

Restatement of restitution 2d

116

A

116: one who provides services to another without knowledge or consent is entitled to restitution if:
Person acts unofficiously (-MUST BE NECESSARY- objectively aggressive in offering unrequested services) and with intent to charge
Services necessary to preserve HEALTH OR LIFE
No opportunity to obtain consent and
No Reason to believe consent would not have been given

62
Q

Restatement of restitution 2d

117

A

117: one who provides services to another without knowledge or consent is entitled to restitution if:
Person acting officiously and with the intent to charge
Services necessary to preserve ANOTHER’S PROPERTY
No opportunity to obtain consent
No reason to believe consent would not have been given
Person in lawful possession of property
Services not made necessary by breach of duty
Services accepted by other party

63
Q

Restatement of restitution 3d

20

A

20- a person is entitled to restitution as necessary to prevent unjust enrichment if:
That person performs, supplies, or obtains professional services
Required for the protection of another’s life or death
If the circumstances justify the decision to intervene without request
Unjust enrichment measured by a reasonable charge for services

64
Q

Restatement of restitution 3d

21

A

21- a person is entitled to restitution as necessary to prevent unjust enrichment if:
That person acts to prevent another’s property from threatened harm
If the circumstances justify the decision to intervene without request and
It is reasonable to assume the owner would want the action performed
Unjust enrichment is measured by the loss avoided or by a reasonable charge for services

65
Q

Benefit to recipient vs Value of services

A

e.g - A is admitted to the hospital but is unconscious and dies w/o regaining consciousness
Did A benefit from the services?
NN: the court may impose liability on A’s estates based upon the reasonable value of services rendered by hospital

66
Q

Restitution where no relationship b/n parties

A

Owner- no liability to SK if GK is paid (courts are split on partial payments)

  • NO contract with subcontractor
  • Contract with General contractor

General
Contract with subcontractor and owner

67
Q

Mechanic’s lien statute-

A

statutory encumbrance (burden) against real property for the value of improvements to the property
All jurisdictions- statutory requirements must be met
If met, O may have to pay 2x
Lien waiver: O obtains SK’s written waiver of right to file lien vs property BF paying GK

68
Q

Express K: based on the words- intent and mutual assent

Implied in fact k: based on the conduct (manifestation)- intent and mutual assent

Implied in law K (quasi-K): remedies imposed by court to do justice- intent & mutual assent NOT required

A

Express K: based on the words- intent and mutual assent

Implied in fact k: based on the conduct (manifestation)- intent and mutual assent

Implied in law K (quasi-K): remedies imposed by court to do justice- intent & mutual assent NOT required

69
Q

Restitution in the family

A

Benefits by family presumed gratuitous
presumption can be overcome
E.g offspring caring for parents

1L- final review (4 decks)

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