Page 1 Flashcards
What are the two types of governing law in contracts?
UCC and Common-Law
UCC articles 1 & 2 only apply to contracts that involve what?
Transactions for the sale of goods
What are the things that are involved in the sale of goods under the UCC?
- anything that is movable
- plus crops or timber once they are severed from the land
What parts of contracts does Common Law apply to?
- services
- real property
- intangible personal property
What is the order of things to discuss on a contracts essay?
- body of law
- formation
- defenses to formation
- conditions - performance
- breach
- remedies
- TPB
- assignments
- delegations
What are the things that need to be discussed in contract formation?
- mutual agreement
- consideration
- no valid defenses
What is mutual agreement?
Parties have mutually agreed to certain basic terms
Mutual agreement basically involves what two things?
Offer and acceptance
What is the basic kind of consideration?
A bargain
What does “no valid defenses” mean?
There can’t be any defenses to the enforcement of the contract
What are the three major areas of contracts?
- formation
- performance
- remedies
What is a contract?
A promise that is legally enforceable
Every contract has an implied promise to do what?
Negotiate in good faith
There can be no contract unless what initial thing has happened?
The minds of the parties have met and mutually agreed on some specific thing
A typical contract exam question involves what?
A broken promise
If an essay question has a broken promise, what should your discussion start with?
Whether the broken promise was legally enforceable
What is a promise?
Statement of intention coupled with commitment to act in accordance with that statement
What are contracts that are controlled by law?
- employment
- insurance
- contracts of adhesion
How does the law control employment contracts?
Sets:
- minimum wage
- hours
- working conditions
- social insurance programs
What is a contract of adhesion?
Standard form contract prepared by one party and signed by another in a weaker position who adheres to the contract with little choice about the terms
Adhesion contracts essentially have no realistic opportunity to do what?
Negotiate
Adhesion contracts should be interpreted to enforce only what provisions?
Those that a reasonable person signing the contract would anticipate.
Ones that can’t be anticipated or agreed with aren’t considered part of the bargain
What are the three categories of classification of contracts?
- formal and informal
- void/voidable/unenforceable
- express/implied/quasi-contracts
What is a formal contract?
One that is not binding unless it includes formalities like a seal and is in writing and signed
What is an informal contract?
All other kinds of contracts that aren’t formal
What is a void contract?
One that produces no legal obligation
What is a voidable contract?
When one or more of the parties has power to avoid the legal relations created by the contract
What is an unenforceable contract?
One that has some legal consequences, but can’t be enforced in an action for damages or specific performance
What is an express contract?
One where the parties show agreement by words that are either written or spoken
What is an example of an express contract?
Saying that you will sell someone your car for $5000, and that person says they will buy it
What is an implied in fact contract?
Show agreement by conduct
What is an example of an implied in fact contract?
Walking into a store and paying for an item
What is an implied in law contract?
Obligation imposed by law when the circumstances require it, even though no promise was made or intended
What is an example of an implied in law contract?
Unconscious accident victim is saved by a surgeon at the hospital, so the law imposes a duty to pay to avoid unjust enrichment
What is a unilateral contract?
A promise in exchange for complete performance
What is an example of a unilateral contract?
Telling someone you will pay them $500 if they paint your house
If you from a unilateral contract by telling someone you will pay them to paint your house, they can only accept by doing what?
Painting the house, and they have to complete the job to form the contract
Who is under the obligation in a unilateral contract?
Only the offeror, but he has to give the offeree a reasonable time to complete
If you make an offer to the public, is that a unilateral or bilateral contract?
Unilateral, since it can’t really involve a promise by the other party, so complete performance of the contract by one member of the public constitutes the promise
What is a bilateral contract?
One that is formed by mutual promises only
What is an example of a bilateral contract?
Promising to sell someone your car and they promise to buy it
Bilateral contracts are formed based on what?
Promises, because each person promises something and no one has yet performed
If someone makes an offer that doesn’t say what type of contract is involved, what should you always assume?
That it is bilateral
What is an implied promise?
If one party starts to perform in the presence or knowledge of the offeror
Can an implied promise work as a promise to create a bilateral contract?
Yes
What is a reverse unilateral contract?
When an offeree makes the only promise
What is an example of a reverse unilateral contract?
A homeowner pays $500 to an insurance company asking for their promise to pay $200,000 if his house burns down. He is the offeror but hasn’t made a promise
