R6- Contracts Flashcards
What must a contract contain?
- Offer & Acceptance
- Exchange of Consideration
- Proper form (oral or written)
- Lack of Defenses
- Legal subject matter
- Competent parties
What forms may acceptance of a contract take?
- Meeting of the Minds
- Can be written or oral
- Must be in the form/method required by offeror
- Must be mirror image- i.e. no changes in terms
Who can accept an offer?
- Must be accepted by intended party (offeree)
- Definiteness & Certainty
- They must intend to accept
- Acceptance can only be made by a party who knows an offer has been made and has all of the facts
What happens if an offeree accepts a contract but puts added stipulations?
It is not acceptance
- But instead becomes a counter-offer and the original offeror is now the offeree
When is an offeror bound by a contract?
- When they RECEIVE the acceptance.
- If the offeree rejects; then accepts
- Whatever gets to the offeror first is what is binding.
What will void an offer?
- Destruction of Subject Matter & Illegality
- If offeror dies or becomes insane before acceptance; offer is void.
- Contract is binding if acceptance occurs before death/insanity.
What actions or circumstances will revoke a Offer/contract?
– Offeror revokes and offeree receives revocation
- Offeree finds out prior to acceptance that offeror has sold the item
- In the case of an Option;
–Offeror cannot revoke until the time of the option has elapsed
- Initial rejection by offeree doesn’t void the option.
What is an Option?
Some amount of consideration (like money) is put forth by offeror to keep the offer open for a stated period of time
What is a Requirements Contract?
- These are contracts where someone becomes the exclusive provider of something in exchange for consideration
What is Detrimental Reliance/Promissory Estoppel?
- Promises to donate are legally enforceable
- One Party detrimentally relied upon by another can be enforced without consideration
What can make a contract VOID?
- Fraud in the execution
- Formed under extreme duress
- Extreme Illegal
What can make a contract VOIDABLE?
- Fraud in the inducement
- Party not competent to contract
- Formed under SIMPLE duress
- Undue influence
What is the result of a clerical error in a contract?
- The contract is unenforceable.
Contracts under the Statute of Frauds must be in what form to be valid?
They must be in writing.
What kinds of contracts are subject to the Statute of Frauds?
- Marriage
- Cannot be completed within one year
- Involves the purchase of Land/real estate
- $500+ Sale of Goods
- Executors
- Surety: Co-signing and guaranteeing the debt of another
“MY LEGS”
What is the parol evidence rule?
- Prevents one party to a written contract from coming in after the fact and claiming that a certain conversation took place that conflicts with what is agreed upon in the written contract
- It also prevents using an oral argument to read into the meaning of what is written on paper
- If it’s on paper; it trumps what was agreed-upon orally prior to the written contract
Note: does not negate oral agreements made AFTER the contract or disallow oral words from clarifying ambiguous contract language.
What are the requirements for the assignment of a contract?
- Contracts are assignable to a third party beneficiary; but must be done so in good faith
- Obligations may be assignable
- Assignor is still liable
- Assignor may be released from liability if other party grants a novation
When can contracts be discharged by law?
- Party under contract is bankrupt
- Party under contract dies or is incapacitated
Party cannot physically complete the contract
(i.e. They are in prison so can’t finish building your house)
What is a Executory Contract?
- If duties remain to be performed
- Partially: One party has performed
What are Governed by Common Law?
- Real Estate, Insurance, Services & Employment: “R.I.S.E.”
An Offer for the Sale of Goods generally need only include?
- UCC
- The Quantity Term
