Part A--Formation, Battle of Forms, SoF, etc. Flashcards
Statute of Fraud Categories
MYLEGS500
-Consideration of Marriage
-Will not be completed w/in 1 year (from date of formation)(exception–employment contracts)
-Contract for sale of interest in land (exception–present conveyance, short term leases, contracts to lease, partial performance)
-Contract of executor/administrator to answer for duty of decedent
-Contract of guarantee or suretyship (i.e. promise to answer for debt to 3d party)(exception–main purpose exception, and creditor discharges original debtor on faith of guarantee )
-Sale of goods $500 or more (UCC)
Main purpose exception
Exception to SoF writing req. for guarantors/promise to answer for debt of third party
-If main purpose protect/promote own econ. interests–can be oral
Contract for future sale vs. present conveyance of land
Key difference–present conveyance not covered by SoF
-SoF takes “contract for sale” literally
Exception to L SoF
Sale of interest in land exception–short term leases for year or less, contracts to lease
-If year or more–need writing (see year req.)
Exception to G SoF
Guarantee/suretyship (agreement to answer for debt of third party) exceptions
1) Creditor discharges original debtor from oblig. to pay based on guarantee of third party
2) Main purpose exception–if main purpose (“leading object”) to protect promote guarantor’s own econ. interests
Exception to L SoF
Sale of interest in land exceptions
1) Present conveyance (v. contract to sell)
2) Short-term lease/contract to lease (w/in one year)
3) Partial performance–Partial payment AND entrance into land OR made improvements–idea is reliance that cannot be remedied by $$
4) Promissory estoppel
Statute of Frauds general rule
If the Statute of Frauds applies, then an oral contract is unenforceable except when the agreement is written/memorialized in a writing signed by party against whom enforcement is sought
Common law SoF Writing requirement
1) Writing
2) Signed by party against whom enforcement is sought
3) containing: a) ID of parties; b) nature and subject matter; and c) essential terms
Tacking together signed + unsigned (not incorp. by reference) docs under SoF
Need:
1) One signed writing unambig. establishes contract relationship
2) Signed + unsigned docs clearly refer to same subject AND
3) Clear and convincing evidence of acquiescence to unsigned docs by party being sued
Signature under SoF
Anything intended to authenticate the doc. (ex. initials, typed sig., letterhead, most states–elect. sig.)
Part performance enforcement for land only applies if
Action by buyer v. seller
Action for specific performance
Restitution
Recover value of benefits conferred
Quantum meruit
Recover reasonable value of services rendered
Part performance + 1 year contract
Not valid–but full performance = enforceable, might get quantum meruit
Promissory estoppel + SoF
Some jx impose stiffer reqs vs. ordinary promissory estoppel–still need same reqs. but look at
CL
1)nature of reliance + relationship to remedy
2) corroboration of reliance by terms of contract
3) evid. of contract existence/terms
UCC–sometimes need to show unconscionable injury, unjust enrichment
Exception to stiffer reqs–general (i.e. construction) contractors almost always allow p. estoppel
Common law v. UCC Statute of Frauds
Common law–marriage, year or more, sale of interest in land, executor’s personal promise re: decedent, guarantor promise to debt of 3d party
UCC–goods of $500 or more
Writing req. under UCC Statute of Frauds
1) Writing
2) Signed by party against whom enforcement sought
3) “sufficient to indicate a contract for sale has been made”
4) Quantity of goods (+ only enforceable to that extent, even if wrong)
Quantity under UCC SoF
Required for enforceability (up to amount listed)
-Can use other language in contract IF provide “unambig.” basis for quality
-Output/requirements contracts + expression of “output” “requirements” or equiv. = OK
Ways to satisfy UCC SoF
1)Signed writing
2)Merchant’s confirmation
3) In court admission
4) Part performance (if divisible only up to amount/payment received and accepted)
5) Substantial reliance by seller of specially manufactured items
Merchant Confirmation
Confirmation of oral agreement IF
1) Both merchants
2) “Sufficient v. sender”
3) “confirmation of contract”
4) w/in “reasonable time
5) receiving merchant has “reason to know” of contents (ex. not lost in mail)
UNLESS
1) written notice of objection w/in 10 days (Notice can also be a merchant confirmation + binding if meets above–ex. “please send the remaining 200”)
Part Performance under UCC SoF
1) actions of both parties indicating contract exists AND
2) payment or goods received and accepted (indivisible = partial payment enough for whole contract, divisible = only amt paid/accepted)
Substantial Reliance SoF UCC Exception
Seller can enforce oral SoF contract if
1) Goods specially manufactured for buyer
2) Not suitable for sale in ordinary course of business
3) Seller sub. begun making goods or made commitments to get
4) Circumstances r. indicate the actions/ goods for buyer AND
5) Actions occurred before received notice of revocation
Revocation of Unilateral Contract
Irrevocable once performance has begun (majority rule)
Preparation does not count–offeror can revoke
(Min disfavored rule–only irrevocable once performance complete)
Types of Contract Law
1) UCC–re: sale of goods
2) Common law–re: services
UCC definition of goods
Any “movable item”
Hybrid Contract types (for goods and services)
Majority: predominant purpose
Look at:
1) Language of contract
2) Nature of supplier’s business
3) Rel value of goods v services
Minority: partition contract–goods use UCC, service uses CL
Goods incidental = CL
Services incidental = UCC
Offer Elements
1) Outward manifestation AND
2) Signal that acceptance will seal deal
Key–is offeror willing to commit w/out further assent if accepted?
Termination of Power of Acceptance
1) Lapse of Time
2) Death/Incapacity of Either Party
3) Revocation by Offeror
4) Rejection by Offeree
Termination through lapse of time
Can be time stated in offer
If not specified–r. time
Face to Face Conversation Rule
Offer made face-to-face = ordinarily deemed to be only open till close of conversation, unless evidence otherwise
Revocation By Offeror
General rule–free to revoke at any time, if
1) Prior to acceptance AND
2) Effectively communicated
Can be direct OR indirect (learned from 3d party)
Exception: enforceable/non-revocable options contract/offer
Direct Revocation
Offeror communicates revocation directly w/ offeree
Indirect Revocation
Offeree learns of offeror’s intention to abandon from third party source
Effective IF
1) Definitive action inconsistent w/ keeping offer open AND
2) Offeree acquires reliable info re: action from 3d party source
Revocation by Advertisement/General Notice
2d RST-OK if
1) Communicated by ad or general notice that is functional equiv. AND
2) No better means r. available
Mirror Image Rule (CL)
CL rule–unless Acceptance mirrors terms = rejection + counteroffer
Mirror Image (UCC)
Does not exist under UCC
If acceptance does not match offer/adds terms
Non-material = part of contract, unless explicitly stated
Material or conflicting = knock out
Enforceable Options Contract (CL Majority)
MUST HAVE
1) Offer AND
2) Subsidiary promise to keep offer open AND
3) Valid mech for sec. enforcement (almost always consideration)
Promissory estoppel–foreseeable + r. reliance, + injustice if not enforced
Enforceable Options Contract (CL Minority)
Can prevent revocation of offer IF OFFER
1) In writing + signed by offeror AND
2) Recites consideration for promise to keep open AND
3) Proposes exchange on fair terms w/in r. time
Promissory estoppel–foreseeable + r. reliance, + injustice if not enforced
Firm Offer Rule (UCC)
Can make irrevocable offer without consideration IF
1) Made by merchant AND
2) In writing signed by merchant AND
3) Offer expressly states will be held open AND
UCC only–NOT CL
CANNOT be longer than 3 months UNLESS also meets reqs of CL options contract
Offers + Construction Contracts
Generally–if gen. contractor uses subcontractor bid to formulate own bid = implied option contract via promissory estoppel
Idea—reliance, can’t revoke even though no consideration
Merchant (UCC)
Party with special knowledge or skill re: practices OR goods of transaction
Still merchant if only have knowledge re: goods, or vice versa
Bilateral Contract
Offer looking for promise to do x
Promise to perform = acceptance
Unilateral Contract
Offer looking for performance
Can only accept via performance
Even if abandon partway–gen. not liable, b/cause not accepted
Pretty rare: gen reward offers + real estate brokerage agreements
Acceptance (CL)
1) Mirror Image Rule–must mirror terms of offer
2) Communicated to offeror
No method specified = any r. means IF
1) Means used by offeror OR
2) Means customarily used in sim transactions OR
3) Means equivalent in expeditiousness + reliability to means used by offeror
Acceptance by Silence
Default no–but 3 exceptions
1) Takes benefit of services w/ r. opp to reject and reason to know offeror’s intent OR
2) Offeror gives reason to believe silence = acceptance AND offeree intends to accept via silence OR
3) Because of previous dealings, etc it is r. that offeree will only notify if not accepting (binding EVEN IF no intent to accept)
Crossed Offers/Offers Passing in the Night
Need meeting of minds to form contract–so if two offers fly/are mailed past each other–even if same terms, no contract
Acceptance of Offer (UCC)
1) Promise to ship goods in conformity (ex. acknowledgement of order form)
2) Prompt or current shipment of goods in conformity
3) Shipment of nonconforming goods (but also breach)
Exception to Mailbox Rule
If mail rejection first and THEN mail **acceptance **= whichever reaches offeror first determines result
Battle of the Forms (CL)
Perfect tender rule–if acceptance’s terms do not match offer’s terms (ex. new or contradicting clauses–> no contract
Battle of the Forms (UCC Consumer)
If acceptance contains additional or different terms –> terms are proposals for addition
NOT part of contract UNLESS **offeror expressly agrees
Battle of the Forms (UCC Merchants)
Additional terms = incorp into contract UNLESS
1) offer expressly limits acceptance to terms OR
2) Offeror object w/in r. time OR
3) Materially alter contract
Different/contradicting = knockout rule—invalid
Sec. 2-207–Material Alterations
Q– would it result in surprise/hardship if incorporated w/out express awareness of other party
Ex.
-Negate standard warranties
-Materially shorter period for complaints
-Vary trade usage/course of dealing in sig. way
Written Confirmation with Different Terms
V. similar to Battle of Forms
Consumer = proposal for addition–N/A unless accepted
Merchants = additional terms added UNLESS a) materially alter OR b) objection w/in r. time
Conflicting terms–knockout
Conditional Acceptance
Acceptance that is conditioned on agreement to added/different terms
Majority–if language re: material change clear and conspicuous–> conditional acceptance
Minority–must explicitly say won’t do business unless accept terms
Contracts Formed By Conduct (UCC)
If act like have contract but no writing = can still estab. contract (but see SoF)
Approaches to Consideration
Majority = bargained-for exchange
Minority = benefit/detriment test
Minority test–is promisee giving up something had legal rt to do/not to do?
Gratuitous Transfer
Legally binding gift if
1) Deliver gift AND
2) Intent to bestow gift
Moral Consideration
AKA past consideration (ex. “you saved my life–I’ll give you 1K!”) Majority–not valid consideration
Minority–valid if
1) Past benefit was conferred on promisor (vs. 3d party) AND
2) Benefit material
Promissory Estoppel
1) Promise AND
2) Foreseeable Reliance AND
4) Actually Relied AND
5) Injustice w/out Enforcement
