Contracts Essay Rules Flashcards
How to start a basic contracts rule statement
Addie can successfully assert a claim against Laurie for
breach of contract. To create a contract there must be an offer, acceptance, and consideration, and there
must be no defenses against formation or enforcement of the contract. For a communication to be an
offer, it must contain a promise, undertaking, or commitment to enter into a contract. An acceptance
is a manifestation of assent to the terms of the offer. To constitute consideration: (i) there must be a
bargained-for exchange between the parties; and (ii) that which is bargained for must be considered of
legal value, or constitute a benefit to the promisor or a detriment to the promisee.
Addie would argue all elements were satisfied to create a valid contract and
Modification language/ example
While a contract generally cannot be modified unless the modification is supported by new consideration, Addie would argue there was new consideration when
they included Daughter in the contract because Addie and Laurie were now obligated to purchase two
tickets a week
Mutual assent
When determining if there is mutual assent to form a contract courts use an
objective measure by which each party is bound to the apparent intention that she manifested to the
other
SOF
Statute of Frauds: Laurie might attempt to assert that the contract is unenforceable because
it violated the Statute of Frauds. Certain agreements, by statute, must be evidenced by a writing
signed by the party sought to be bound. These agreements include: (i) a promise by an executor or
administrator to pay the estate’s debts out of his own funds; (ii) promises to pay the debt of another
(suretyship promises); (iii) promises in consideration of marriage; (iv) promises creating an interest
in land; (v) promises that by their terms cannot be performed within one year; and (vi) contracts for
the sale of goods for a price of $500 or more. In this case, Laurie might assert that this contract had
to be evidenced in a signed writing because there was no guarantee it could be performed within one
year. This argument would fail. If a contract is possible to complete within one year, it is not within
the one-year prong of the Statute of Frauds, even though actual performance may extend beyond the
one-year period. The terms of their agreement stated that the agreement would continue until they won
the jackpot or until one person notified the other in writing that she was no longer participating. It was
possible that the jackpot could have been won and the winnings split within one year as evidenced by
Addie winning small prizes a few months after the promise was made and delivering one-third of that
prize money to Laurie. Thus, the Statute of Frauds is not a valid defense.
Illegality
APPARENTLY WE SHOULD INCLUDE EVEN ARGS THAT WILL FAIL
Illegality: Laurie also might attempt to assert the defense of illegality. If the subject matter of a
contract is illegal, this will serve as a defense to enforcement. Laurie might argue that the contract was
illegal because the subject matter was gambling, but this argument would fail. The promise to purchase
lottery tickets formed a legal contract because playing the lottery in the state of Florida is legal
Promissory Estoppel:
Promissory Estoppel: In the unlikely event that Addie cannot win on her breach of contract
claim, she could attempt to recover under the theory of promissory estoppel. Even in the absence of an enforceable contract, a promise is enforceable when necessary to prevent injustice if: (i) the promisor
should reasonably expect to induce action or forbearance; and (ii) such action or forbearance is in fact induced. Addie would argue the agreement they made to purchase lottery tickets and split the winnings
reasonably induced her into purchasing two tickets every week for two years and into giving Laurie a
portion of her winnings. Thus, Addie would argue that Laurie should be estopped from not sharing her
own winnings to prevent the injustice of Laurie receiving the benefit of all of the monies earned by the
winnings instead of splitting it three ways. Even if Addie is not able to recover from Laurie’s winnings,
at the very least justice might require that she receive some compensation for the expenses she incurred
in reliance on their agreement by purchasing the tickets and driving to the store to play the lottery for
the two years and by sharing her smaller winnings with Laurie.
Attorneys’ Fees in K
In Florida, parties to a contract may agree to the allocation of attorneys’ fees in
their contract and this will be enforced like any other contractual provision. In this case, however, there
is no indication that the contract contained a provision stating that if litigation ensued, the losing party
would be responsible for paying attorneys’ fees. Therefore, there is no contractual basis to be used by
Addie to recover attorneys’ fees. The court has the inherent authority to award attorneys’ fees for bad
faith conduct. Addie could assert that Laurie’s defenses are frivolous because they are unsupported by
the law, but this is unlikely to be successful on these facts. If a court were to rule in Addie’s favor on
this argument, it is possible that she would be able to recover attorneys’ fees
modification, third party and no capacity
Assuming that Addie is successful in her breach of contract claim against
Laurie, Addie could argue, on behalf of Daughter, that Daughter is also entitled to one-third of Laurie’s
lottery winnings under the terms of the modified contract. Daughter was not a party to the contract
between Addie and Laurie, but she became an intended third-party beneficiary to the contract when
Addie and Laurie modified the contract and agreed to pay Daughter one-third of any winnings from
the tickets they purchased. Intended third-party beneficiaries have contract rights and can enforce the
terms of a contract.
Laurie might argue Daughter is an infant and lacked capacity to enter into a contract and thus the
modification of the contract was illegal and not a valid contract, but this argument would fail. Daughter
was not a party to the contract and was not purchasing any lottery tickets. She was a third-party beneficiary of the agreement between Addie and Laurie. In addition, contractual promises of an adult made
to an infant are binding on the adult, they are only voidable by the infant. Therefore, even though
Addie’s daughter is considered an infant at the age of 14, she can still enforce the contract against
Laurie
contract terms expressly stated payment to Cal
was contingent upon another event
condition precedent
The facts indicate there was a contract between Cal and Addie for the investment plan he rendered for Addie. Cal would assert that Addie breached the contract when she failed to pay him the amount owed for his services. However, the contract terms expressly stated payment to Cal
was contingent upon Addie’s recovery of the lottery prize money. In other words, this was a condition precedent to Addie’s obligation to pay Cal. Cal claims that he did not read the contract and was unaware of this condition. However, an individual’s failure to read or investigate the terms of a contract
generally is not a defense to enforcement of the contract. Cal was a responsible party and could have retained legal advice to review the contract. However, he chose not do to so. He likely will be held to
the terms of the contract and would not be eligible for payment unless Addie receives the funds from the lottery winnings.
Cal might argue that the payment term in the contract was not meant as a condition of payment, but rather was intended to indicate the time of payment. Courts generally prefer the time interpretation,
which reduces the obligee’s risk of forfeiture, unless the event is within the obligee’s control. However, it is unlikely that Cal would succeed with that argument under these facts since the contract clearly stated that payment was “contingent on Addie’s recovery of lottery prize money.”
3rd party
Cal might attempt to assert that he is a third-party beneficiary to the contract
created between Addie and Laurie, but this argument would also fail. He would argue that if Laurie had fulfilled the contract terms, Addie would have the means to pay him for the investment services he rendered. However, only intended third-party beneficiaries can enforce a contract. Whether a person
is an intended beneficiary depends on the intent of the parties. Laurie would argue the discussion she
had with Addie involved the intent to have Addie create an investment plan, not to hire a third party to create the plan. Thus, Cal could not be considered an intended beneficiary because he was not
mentioned in the contract as someone who would render services. Accordingly, Cal has no right to sue
Laurie.
