Contratcs Flashcards
Contract formation
A contract is formed where there is mutual assent (offer and acceptance), consideration, and a lack of formation defenses (capacity, statute if frauds, etc.).
Offer
An offer is an expression of an intent to enter into a contract that is certain and definite, and communicated to the offeree that creates a power of acceptance. An offer may be accepted or rejected until it is terminated.
Acceptance
Acceptance can be made either by a promise to perform or full performance. In a unilateral contract, acceptance can only be made by performance.
Consideration
Consideration is a bargained for exchange that has legal value (value-based inducement).
Termination by death
An offer can terminate sooner, by operation by law, on the offeror’s death, even if the offeree isn’t aware of the death. However, death will not terminate an offer if an option contract existed.
Option contract
An option contract is where the offeror promises not to revoke an offer in exchange of consideration given by the offeree.
Full performance and breach
When a party fully performs under a contract and the other party breaches, the non reaching party is entitled to expectation damages.
Expectation damages
Expectation damages is meant to put the nonbreaching party in the position he would have been in if the contract had been performed.
Restitution
Restitution is a remedy based on avoiding unjust enrichment. The measure of restitution is the value of the benefit conferred or the reasonable value of the work.
Restitution when no contract exists
It is available even when no contract exists if (1) the plaintiff conferred a benefit to the defendant, (2) the plaintiff conferred the benefit with reasonable expectation of compensation, (3) the defendant knew or had reason to know if the plaintiff’s expectation, and (4) the defendant would be unjustly enriched if allowed to retain the benefit without paying the plaintiff.
Third-party vesting
Vesting occurs when the beneficiary: (i) manifests assent to the promise in a manner invited or requested by the parties; (ii) brings suit to enforce the promise; or (iii) materially changes position in justifiable reliance on the promise.
Parol evidence rule
Contractual terms that are set forth in a writing intended as a final expression of the parties’ agreement cannot be contradicted by evidence of any prior agreement or contemporaneous oral agreement. Although this parol evidence rule prohibits contradicting the writing, the terms of the writing may be explained or supplemented by consistent additional terms, unless the court finds from all the circumstances that the writing was intended as a complete and exclusive statement of the parties’ agreement.
