Formation of a Contract Flashcards
Plaintiff’s lost benefit of the bargain
expectation
= Value of promise breached - cost PLF avoided being excused from promise + any other loss from the breach.
Expectation
Any lost benefit of the bargain and any other loss from the breach.
Reliance
Loss caused by the reliance on a promise.
Restitution
Restoration of any benefits PLF gave to Def.
Consideration
Thing given in exchange for a promise.
A promise can be enforced if there was consideration. (gift is not consideration)
Bilateral
Two parties trade.
Unilateral
One performs immediately or without making any promise.
Fly on the Wall Approach
Objective, observable manifestation of intent. Based on a reasonable person under the circumstances. Objective facts with common sense.
Implicit Exchanges
Implied or Express promise. After receiving a favor, promise to return the favor.
Illusory Promise
Unenforceable and cannot be consideration for a promise in return.
Is a condition of the promise the promisor’s absolute control?
Circumstances when not performing would be a breach?
Threat of Lawsuit
No consideration if meritless. Determined by good faith and reasonableness.
Pre-existing Duty Rule
Performance of a duty already owed that is not doubtful is not consideration.
Exception: similar performance is consideration if differs from the original duty required.
Successful “Pirate”
Exceptions to pre existing duty.
Demand a payment in advance.
Promise to change performance.
Assert dispute over the existence/ extent of duty.
Mutual release to void original contract.
Pre-existing Duty Exceptions to ammend
Good reason to modify.
Unexpected circumstance.
Unsophisticated parties.
Implied Mutual Release
Promise modifying a duty to not fully perform on either side.
Binding if: modification is fair and equitable.
