Contracts Midterm Flashcards
Elements of Promissory Estoppel
- A promise made to a promisee
- In which the promisor reasonably expects their promise to induce action or forbearance of action by the promisee or a third party
- And the promise being made induces the action or forbearance of action
- Injustice for the promisee can be avoided by enforcement of the promise.
Elements of Misrepresentation
1.A false statement of fact, intention or opinion
2.Addressing a fact, intention or opinion material to the contract
3.Made with the requisite state of mind (intentional, negligent, or innocent)
4.Actually and justifiably relied on by the other party; and
5.Caused damage to the other party.
Elements of Non-Disclosure
1.Failure to disclose a fact
2.A duty to disclose that fact
3.The non-disclosed fact was material
4.The other party actually and justifiably relied on the state of things in the absence of disclosure of the fact; and
5.Damage
When does the duty to disclose arise
- If the fact is not disclosed, would it materially alter the functionality of object of the contract or the ability of the seller to perform the contract
- Any party with an established relationship with the other party in the K in which regular advice and counsel had been given, has a duty to disclose any known material facts about the object of the contract
- If the fact that is not disclosed would cause significant financial damages of which the seller is aware are undoubtedly going to be incurred, or physical harm to the buyer as a result of their non-disclosure
- The seller must disclose an material fact that would materially alter the functionality of the object of the contract or the ability of the seller to perform if it is discovered that the material fact contradicts “selling points” used to induce the other party’s entering into the contract.
Elements of Concealment
1.The active efforts to prevents another party from learning a fact
2.The concealed fact was material
3.The other party actually AND justifiably relied on the facts as they appeared without the concealed fact; and
4.Damage
Elements of Mutual mistake
1.A mistake made by both parties about a fact surrounding a transaction at the time the contract is made.
2.Must be concerning a basic assumption to the contract
3.Must have a material effect on the parties’ contractual exchange
*Assumption of Risk
Elements of Unilateral Mistake
1.A Mistake by one party about a fact surrounding a transaction at the time the contract is made.
2.Concerning a basic assumption of the contract
3.Which had a material effect on the parties contractual exchange
4.Either
(a) Non-mistaking party knew or should have known, or caused the mistake OR
(b) The mistake makes the contract grossly unfair (think policy here
Elements of Duress
- One party commits a wrongful act
- Such a wrongful act precludes the other from exercising their free will/induce action (or if economical no other feasible option)
Elements of Illegality
- Contracts prohibited by statutes
- Contracts in violation of licensing statutes
- Covenants not to compete
- Tangential illegality
Covenant not to compete Requires:
Covenant not to compete
Elements of Unconscionability
Procedural Unconscionability
1. Absence of a meaningful ability to bargain
2. Little opportunity to understand the terms
3. Use of fine print and legalese
4. Deceptive sales practices
5. Take it or leave it; boiler plate agreements
OR – Gross inequality of bargaining power
Substantive Unconscionability
1. Terms that shock the conscience!!
Statute of frauds
Common Law
1. Is it a land sale?
2. Is it something that cant be performed within a year?
UCC:
1. Is it over $500?
UCC: Terms / General Definitions §
§1-201
UCC: Formation In General / Mutual Assent §
§2-204
a. Can be any manifestation to show agreement
b. If parties like they’re in an agreement, then there’s a
contract
UCC: Firm Offers §
§2-205
firm offer just means you are making an offer that is irrevocable for (a) time states, (b) a reasonable amount of time or (c) max 3 months. Firm offers requires…. see §
*this is only for merchants
