K's Flashcards
What is an offer
A manifestation of intent to be bound, communicated to the offeree, and definite and certain in its terms.
how can offers be terminated
Offers can be terminated by:
- revocation
- rejection
- counteroffer
- lapse of time, or by operation of law (e.g., death or incapacity of the offeror).
what is acceptance
A manifestation of assent to the terms of the offer, communicated to the offeror.
How do you accept
Acceptance can be made by the method specified in the offer or, if none specified, by any reasonable means.
Mirror Image Rule
(Common law only)
Acceptance must mirror the terms of the offer without modification.
Consideration
A bargained-for exchange of legal value. Each party must incur a legal detriment or confer a legal benefit.
Promissory Estoppel
A promise that induces reliance may be enforceable without consideration if reliance was reasonable and detrimental.
Lack of Capacity
Defense to formation
Contracts with:
minors
intoxicated persons or mentally incompetent persons
may be void or voidable.
Duress and Undue Influence
Defense to Formation
Contracts entered into under coercion or undue influence are voidable.
Misrepresentation and Fraud
Defense to formation
Contracts based on false statements or fraud are voidable.
Mutual mistake
Defense to formation
both parties are mistaken about a basic assumption may render a contract voidable.
Unilateral mistake
one party is mistaken) may render a contract voidable if the non-mistaken party knew or should have known of the mistake.
Conditions
An event that must occur before a party’s performance is due.
Conditions precedent
must occur before performance
conditions concurrent
must occur at the same time as performance
conditions subsequent
terminate a duty to perform
Substantial Performance
Performance that, although not complete, is substantial enough to warrant payment, minus any damages for incomplete performance.
Material Breach
A significant failure to perform that excuses the other party from performing.
Minor Breach
A small failure to perform that does not excuse the other party but may allow for damages
Anticipatory Repudiation
A clear indication that a party will not perform when performance is due. The non-breaching party can treat the contract as breached and seek remedies immediately.
Impossibility
Defenses to Breach
Performance is objectively impossible due to unforeseen events.
Impracticability
Defenses to breach
Performance is extremely difficult or expensive due to unforeseen events.
Frustration of Purpose
Defenses to Breach
The contract’s purpose is substantially frustrated by unforeseen events, and both parties understood this purpose
Compensatory Damages
Aim to put the non-breaching party in the position they would have been in had the contract been performed. Includes expectation damages and consequential damages.
Reliance Damages
Reimburse the non-breaching party for expenses incurred in reliance on the contract.
Restitution Damages
Return any benefit conferred on the breaching party
Liquidated Damages
Agreed-upon damages specified in the contract, enforceable if they are a reasonable forecast of actual damages and not a penalty
Specific Performance
Equitable remedies
Court orders the breaching party to perform the contract. Typically available when monetary damages are inadequate, such as in contracts for unique goods or real estate.
Injunction
Equitable remedies
Court order preventing a party from performing an act.
Duty to Mitigate
The non-breaching party must take reasonable steps to reduce their damages.
Intended Beneficiaries
3rd party beneficiaries
Have rights under the contract and can sue to enforce it.
Incidental Beneficiaries
3rd party beneficiaries
Do not have rights under the contract and cannot sue to enforce it.
Assignment of rights
transfer of contractual rights to a 3rd party
limitations in terms of assignment of rights
rights can NOT be assigned if they materially change the obligors duty or risk
Delegation of duties
transfer of contractual duties to a 3rd party
limitations in terms of delegation of duties
duties cannot be delegated if they involve personal services or if the contract prohibits delegation
Novation
a new contract that substitutes a new party for one of the OG parties, releasing the original party form the contract
UCC offer and acceptance
UCC is more flexible, and a contract can be formed even if some terms are left open, as long as there is intent to contract and a reasonable basis for remedy.
Merchant Firm Offers
Under UCC, a merchant’s firm offer in a signed writing is irrevocable for the time stated (or up to 90 days if no time is stated)
Perfect Tender Rule
UCC
Seller must deliver goods that conform exactly to the contract terms. Buyer can accept, reject, or accept part and reject part.
Cure
UCC
Seller’s right to correct a nonconforming delivery within the contract time.
Buyer’s Remedies
UCC
Include cover (buying substitute goods), specific performance, and damages.
Seller’s Remedies
UCC
Include withholding delivery, reselling goods, and damages
