Contracts - Adaptibar Flashcards
What is a mutual mistake?
When the contract is based upon a mistake made by both parties.
What are the three requirements that must be satisfied to avoid a contract on the account of a mutual mistake?
- the mistake must concern a basic assumption on which the K was made;
- the mistake must have a material effect on the agreed exchange of performances; and
- the party seeking avoidance did not assume the risk of the mistake
What is the test for whether a mutual mistake relates to a basic assumption on which the contract is formed?
Whether one party will get an unexpected, unbargained-for gain, and the other party will suffer an unexpected loss.
Are market conditions and financial ability sufficient to void the contract?
No. These are not considered assumptions that are basic to the contract, and a mutual mistake on those terms will NOT void the contract.
What is impracticability/impossibility
Where the non-occurrence of an event was a basic assumption of the parties in making the contract, and neither party expressly or impliedly assumed the risk of the event occurring.
What is the test for impracticability?
That the party who is supposed to perform has encountered:
- extreme and unreasonable difficulty and/or expense; and
- its non-occurrence was a basic assumption of the parties when they entered into the contract
When may a party seek reformation from the court?
When parties orally agree on a deal, and reduce it into a writing that incorrectly reflects the oral agreement that was made.
What can reformation NOT do?
Remedy an underlying disagreement about the deal itself.
Reformation is a proper remedy ONLY…
when the writing incorrectly summarizes the parties’ shared understanding, NOT when they fundamentally disagree on terms of the deal to begin with.
- Where a clerical error has been made in reducing an agreement to writing, a party may bring an action for reformation
- This will allow the writing to be corrected or include an omitted provision
Is a promise to surrender a legal claim sufficient consideration to support a return promise?
Yes, even if the claim turns out to be invalid, so long as the person surrendering the claim has a good faith belief in its validity.
When does the power of acceptance created by an offer end?
When the offer is terminated
When does a revocation terminate the power of acceptance?
If it is communicated to the offeree before the offeree accepts
In what ways may an offer be effectively terminated indirectly?
If the offerree indirectly receives:
- correct information;
- from a reliable source;
- of acts of the offeror that would indicate to a reasonable person that the offeror no longer wishes to make the offer.
What is the UCC equivalent of the mirror image rule?
Contracts are allowed to be formed even when the acceptance differs from the offer, and then parties can determine what the terms of the contract are.
- between merchants, the UCC allows for additional terms proposed in the acceptance to become part of the contract under certain circumstances if the other party remains silent
