Final Flashcards
What are the guiding principles of Law? (2)
WHAT DOES SOCIETY DEFINE AS FAIR
WHAT DOES SOCIETY DEFINE AS REASONABLE
Essential Elements of a Contract (4)
Mutual Assent
Consideration
Legality of Object and Performance
Capacity
What makes consideration ‘of legally sufficient value’? (4)
- a promise to do something that has no prior legal duty to do
- the performance of an action that one is otherwise not obligated to undertake
- refraining from an action that one has a legal right to undertake (called forbearance)
AND
must provide the basis between the contracting party
forbearance
refraining from an action that one has a legal right to undertake
mutual assent
law requires that mutual assent be voluntary and knowing
What are the two types of express contracts?
Bilateral and Unilateral
express contract
a contract in which the terms of agreement are in words; oral or written
characteristics of a bilateral contract
- two promises
- each exchanged for the other
- formed when promises exchanged
(promise given in exchange for a return promise)
ex. going to a restaurant is a bilateral contract. the person brings you food, in exchange you bring them money.
charactersitics of a unilateral contract
- one promise
- exchanged for act or forbearance
- formed when performance completed
contract that results when an offer can be accepted only by the offeree’s performance
ex. putting up a ‘lost dog reward’ sign is unilateral. if a person finds the dog, you give a 30 dollars. if the person doesn’t find the dog, you don’t.
What are the two classifications of contracts?
informal vs formal
What kind of contracts are informal contracts?
Most contracts
What kind of contracts are formal contracts?
contracts that are required by law to have a set of formalities and are ONLY valid by law if they are in a specific form
ex. check, seal
duty
obligation the law imposes on a person to perform or refrain from performing an act
right
capacity of a person with the aid of the law to require a person to perform or refrain from performing an act
implied in fact - what it is and the conditions
3
based on conduct.
- plaintiff furnished service or product
- plaintiff expects to be compensated
- defendant had a chance to reject and did not
quasi contract
- ‘as if’ contract existed
- courts impose a contract to ensure one party is not unjustly enriched at the expense of the other
ex: A delivers to B an envelope intended for c. A is entitled to get the $ back from B based on quasi contract
elements of a quasi contract
- benefit conferred on defendant without the defendant’s knowledge
- circumstances would make it inequitable to permit defendant to retain benefit without paying for it
promisory estoppel - what it is and conditions (3)
can be used only when there is detrimental reliance on promise
- promisor should reasonably expect promise to induce substantial act or forbearance
- promisee takes substantial action or forbearance in reliance on promise
- injustice can only be avoided by enforcing promise (ny requires that circumstances are unconscionable)
What does it mean if someone says ‘unconscionable’
they ‘shock the conscience’
What is an offer?
A manifestation of willingness to enter into a bargain to justify another person in understanding that his assent to the bargain is invited and will conclude the bargain.
What is MUST an offer have? (3)
- Communication
- Intent
- Definiteness
How long do offers stay open?
If not a stated time, a reasonable time under the circumstances at hand
When can offers be revoked?
- unless offer is irrevocable, it can be revoked at any time before an offer has been accepted.
- however, to effect a revocation, the notice of or knowledge about revocation or revocable act must be received by offeree
What are the conditions of a revocation of offer? (4)
-manifestation of unwillingness to enter into a contract on offeror’s terms
-must be express or implied
-may be by conduct
-effective on receipt by offeror
-terminates power to accept
(unless its an irrevocable offer, note estoppel theories)
estoppel
A legal principle that bars a party from denying or alleging a certain fact owing to that party’s previous conduct, allegation, or denial.
firm offer language (4)
‘this is a firm offer’
‘will remain open’
‘will not be withdrawn’
‘is irrevocable’
all firm offers for merchants and non merchants MUST
give affirmative assurance
NON ACCEPTABLE language for firm offers (3)
‘this offer will expire on…’
‘you must reply by…’
‘if i do not hear from you by…’
elements of a counteroffer (4)
- counteroffer terminates offer and power to accept, unless irrevocable offer*
- effective on receipt (i.e offer is terminated)
- offeror does not have to respond to offer to terminate
- offeror can accept counteroffer
elements of inquiries (4)
- no indication of unwillingness to accept the terms of the offer
- merely proposes new or different terms
- does not terminate the offer
- difference between counteroffer and inquiries may be subtle
If an offeree of a firm offer dies, what happens to the contract?
Terminates. Offer not transferable.
If the offeror of a firm offer dies, what happens to the contract? (2)
Irrevocable- treated as a contract
Revocable- Offer terminates upon end of offer or upon receipt of revocation
What is effective only when received?
An offer, a revocation, a rejection, and a counteroffer
What is effective when sent? What are the exceptions? (3)
An acceptance UNLESS -Offeree uses an unauthorized means -Acceptance follows prior rejection -Offeror requires acceptance to be received to be accepted.
What is the purpose of a contractual remedy? What it not?
The purpose is NOT to penalize the breaching party (punitive damages) rather to compensate the aggrieved party
ie to put the aggrieved party in the position she/he would have been in if contract had been performed
What are the common general rules of damages at law? (3 stages)
Start with: What would put the damaged party in the place he would have been if the contract had been performed
Then ask: What type of damages is damaged party entitled to (4 types)
**MITIGATION MUST ALSO OCCUR* the aggrieved party must take reasonable steps to avoid excess losses- what losses could you have avoided with reasonable efforts
What are the 4 main types of damages?
Compensatory damages
Incidental damages
Consequential damages
Nominal damages
What are the conditions that damages must be (3)
Proximate- where the act or omission plays a substantial part in causing the damages
Foreseeable- to know in advance the act of looking forward (foresight), what a reasonable person would be able to foresee as a result of the breach
Reasonably Certain- damages must be proved not merely speculated
What are the 2 other types of damages?
Liquidated damages
Quantum meruit
Liquidated damages - what it is (3), the 2 types
Contract fixes amount other party has to pay if he breaches; must be reasonable and not punitive
Generally one of 2 types
Forfeit - e.g. down payment
Fixed amount - e.g. delay damages in construction contract
quantum meruit - what it means, (3) characteristics
Quantum meruit – “as much as he deserves”
Reasonable value of services
where services, issue may be value of services to other party
( the parties did not have an express contract, but one party enjoyed the benefits of the other party’s services.)
For court to determine
equitable contract remedies
If there’s NOT a remedy at law ( damages) i.e. if money won’t suffice to pay for the breach
types of equitable remedies (4)
specific performance, injunction, recission/restitution, reformation
specific performance (4)
- cannot get for non-unique personal property as there damages can be quantified
- cannot get for personal services agreement
- can be used to force someone to sell you a specific (unique) painting or a piece of land you agreed to buy