Contracts I Flashcards
promisor
A person who makes a promise.
statements of opinion, prediction, or intention
A statement of opinion, prediction, or intention is not a promise, unless there are additional circumstances that would give the speaker reason to know the recipient would construe the statement as a promise.
applicable law
The UCC applies to contracts for the sale of goods (even if none of the parties is a merchant). The common law applies to contracts that are not for the sale of goods (for example, the sale of land or services). If the UCC does not have a rule applicable to a particular issue involved in a contract for the sale of goods, the common law rule applies.
strict liability
Contract liability is generally strict liability, meaning that a promisor is generally liable for breach of contract even if, in breaching the contract, she did not act negligently or with a bad motive.
legal enforceability of promises
The two principal ways promises are made legally enforceable is the promise is within a contract (a bargain) and the doctrine of promissory estoppel (reliance). “The mere fact that one… promises something to another creates no legal duty and makes no legal remedy available in case of nonperformance. To be enforceable, the promise muust be accompanied by some other factor.” Corbin
breach of contract [elements]
The elements of a breach of contract claim are (1) a manifestation of mutual assent, (2) consideration, (3) reasonably certain terms, and (4) a breach or repudiation.
promissory estoppel [elements]
The elements of a promissory estoppel claim are: (1) a promise; (2) the promisor should reasonably have expected the promise to induce action or forbearance by the promisee; (3) the promise induced action or forbearance by the promisee (detrimental reliance), (4) a breach or repudiation, and (5) injustice can be avoided only by enforcing the promise.
quasi-contract [elements]
A claim for quasi-contract (unjust enrichment or restitution) requires the plaintiff to prove that (1) the defendant has been enriched (benefited, either in the form of money, property, or services) (2) by the plaintiff, and (3) it would be unjust for the defendant to not pay for the benefit.
objective theory of contracts
The doctrine that a contract is not an agreement in the sense of a subjective meeting of the minds but is instead a series of external acts giving the objective semblance of agreement.
manifestation of mutual assent [elements]
A manifestation of mutual assent ordinarily takes the form of (1) an offer and (2) an acceptance.
misunderstanding doctrine (“Peerless doctrine”)
If the meaning the parties attached to a particular contract provision or word was different (a “misunderstanding” or a “mistake in expression”) and the misunderstanding goes to conflicting and irreconcilable meanings of a material term that could have either but not both meanings, and each meaning is equally reasonable, there is no manifestation of mutual assent. Remember that this case was named after the case of the Peerless ships. One ship came in October and one in December, but neither could be declared the Peerless referenced in the contract.
offer [elements]
An offer is (1) a promise or set of promises, (2) conditioned on acceptance by the promisee (3) that is communicated or delivered to the offeree.
“reason to know” standard
In the absence of information about another person’s characteristics that would make the other person more or less likely to construe a person’s actions or words as a promise, the person has reason to believe that another person will construe the person’s actions or words as a promise if a reasonable person in the position of the other person would believe the person made a promise, taking into account the context of the words or conduct.
intention to not be legally bound
Although a promisor need not manifest an intention that the promise be legally binding, an act or communication is not a promise if a reasonable person would understand that the alleged promisor did not intend a legal obligation to arise.
promise
A manifestation of intention to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.
advertisements
An advertisement is not ordinarily considered an offer, and is instead considered a solicitation (an invitation for an offer), because it ordinarily lacks a promise.
acceptance [elements]
Acceptance of an offer requires (1) a manifestation of assent (2) to the terms of the offer (3) made in a manner invited or required by the offer (4) while the offeree still has the power of acceptance.
silence as acceptance
Silence is ordinarily NOT construed as a manifestation of assent to an offer. Silence/inaction operates as an acceptance ONLY: (1) where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation; (2) where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction; (3) where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept; or (4) where an offeree does any act inconsistent with the offeror’s ownership of offered property and the terms of the offer are not unreasonable.
unordered merchandise
Under federal law, the recipient of merchandise mailed to him or her without prior express request or consent has the privilege to retain, use, discard, or dispose of it in any manner he or she sees fit without any obligation whatsoever to the sender.
preliminary negotiations
A communication is not a promise (and thus not an offer or acceptance), but simply preliminary negotiations, if a reasonable person in the position of the recipient of the communication would believe the person making the communication does not intend to conclude a contract until he or she has made a further manifestation of assent.
knowledge of offer
“Generally, a contract can only be formed if the offeree knew of the offer at the time of the alleged acceptance.” Perillo
motive
An offeree who engages in the act or acts necessary to accept an offer will be presumed to have manifested assent unless the offeree clearly manifested an intention to act solely for other purposes.
grumbling acceptance
An offeree’s expressed lack of enthusiasm or dissatisfaction about an offer will not render ineffective what is otherwise an acceptance.
mirror image rule
A purported acceptance that varies the terms of the offer in ANY way and that is conditional on the offeror’s assent to the additional terms is not an acceptance, it is a counteroffer. But an offeree’s SUGGESTION or REQUEST for an additional/different term made along with the acceptance will not render ineffective an otherwise effective acceptance.
promisee
A person to whom a promise is made.
master of the offer
The offeror is the “master of the offer,” which means the offeror not only specifies the terms of the proposed agreement, but has the privilege to insist on a particular place, time, or manner for the offeree to manifest assent.
prescribed vs. suggested method of acceptance
“If an offer prescribes the place, time or manner of acceptance its terms in this respect must be complied with in order to create an agreement. If an offer merely suggests a permitted place, time or manner of acceptance, another method of acceptance is not precluded.”
when offer doesn’t prescribe method of acceptance
“Unless otherwise indicated by the language or the circumstances, an offer invites acceptance in any manner and by any medium reasonable in the circumstances.”
bilateral contract
A contract “in which there are mutual promises between two parties to the contract, each party being both a promisor and promisee.”
unilateral contract
A contract in which the promisor does not seek a return promise, but instead seeks only completed performance by the promisee.
accepting offer of bilateral contract vs. unilateral contract
If an offeror requires a return promise as the exclusive method of acceptance, the offeree must provide a return promise to have an acceptance.
written document to follow
When negotiations show that the parties discussed expressing their agreement in a written document, but they fail to do so, there is no contract if either party manifested an intention that the agreement would not be binding until expressed in a written document. If the parties manifested an intention to have a binding agreement prior to completing the written document, and manifested an intention to prepare the written document simply to memorialize the agreement already reached, the failure to reduce it to a written document will not prevent it from being binding.
case of doubt or offeror indifference
“In case of doubt [or offeror indifference] an offer is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance.”
case of doubt or offeror indifference results in bilateral contract
Where an offer can be accepted by either a return promise or by performance (a case of doubt or offeror indifference), the tender or beginning of the invited performance or the tender of a beginning of it operates as an acceptance and a promise to completely perform.
late or defective manifestation of assent as counteroffer
A late or otherwise defective manifestation of assent to an offer is a counteroffer, but the original defective manifestation of assent to an offer is a counteroffer, but the original offeror’s silence in response constitutes an acceptance of such counteroffer only if such silence qualifies as an exception to the general rule that silence is not ordinarily an acceptancec
door-to-door sales
Under federal law, a person who makes a purchase of $25 or more for a personal, family, or household purchase has three days to cancel the transaction when the buyer’s agreement or offer to purchase is made at a place other than the seller’s regular place of business
termination of power of acceptance
Except as stated in the rule regarding the effect of an option contract, an offeree’s power of acceptance is terminated by (1) the offeree’s rejection (unless the offeror has manifested a contrary intention) or counteroffer (unless the offeror has manifested a contrary intention), (2) lapse of time, (3) offeror’s revocation, (4) offeror’s or offeree’s death or legal incapacity, or (5) the non-occurrence of any condition of acceptance under the offer’s terms.
revocation
An offeree’s power of acceptance is terminated when (1) the offeree receives from the offeror a manifestation of intention not to enter into the proposed agreement (direct revocation), or (2) the offeror takes definite action inconsistent with an intention to enter into the proposed agreement and the offeree acquires reliable information to that effect from someone other than the offeror (indirect revocation).
rule of Dickinson v. Dodds
In general, an offeror can revoke an offer any time prior to acceptance, and a promise to keep an offer open is unenforceable unless there is a basis for making such a promise enforceable.
when power to accept terminates upon revocation of an offer made by newspaper or similar medium
Although as a general rule an offeror’s revocation only terminates the power of acceptance when notice of the revocation is received by the offeree, when an offer is made by advertisement in a newspaper or other general notification to the public… the offeree’s power of acceptance is terminated when a notice of termination is given publicly by advertisement or other general notification equal to that given to the offer and no better means of notification is reasonably available.
notice of acceptance by return promise (dispatch rule)
An acceptance by return promise, made in a manner and by a medium invited by the offer, is effective and completes the manifestation of mutual assent as soon as it is put out of the offeree’s possession (regardless of whether it reaches the offeror) UNLESS (1) the offer provides otherwise, (2) the offer includes an option contract (in which case acceptance is effective only when received by the offeror) or (3) the acceptance is sent after a rejection is sent by mail or telegram (in such a situation, whichever is received by the offeror first is effective.)
notice of acceptance by performance
“Where an offer invites an offeree to accept by rendering a performance, no notification is necessary to make such an acceptance effective unless the offer requires such a notification.
lapse of time
“An offeree’s power of acceptance is terminated at the time specified in the offer, or, if no time is specified, at the end of a reasonable time.”
in-person or telephonic negotiations
“Where the parties bargain face to face or over the telephone, the time for acceptance does not ordinarily extend beyond the end of the conversation unless a contrary intention is indicated. A contrary intention may be indicated either by express words or by circumstances.
