Test3 Flashcards
Elements of a Valid Contract
Offer
Acceptance
Consideration
Capacity
Legality
Offer
A promise or commitment to do or refrain from doing some future action
Validity of Offer
Objective Intent of the Promisor
Definite Terms
Communicated to a third party ( oral + written)
Objective Intent
If offer seems sincere
Lucy v Zehmer
Panhandle Realty LLC v Olins
Lucy v Zehmer
Objective Intent( the offer for a 50,000 farm was written on a napkin)
Panhandle Realty LLC v Olins
Objective Intent ( Attempt to back out of lease)
Definite Terms
Offer must include sufficient detail ( parties + specific work+ specific item+ payment details +timing)
Venture Associates Corp V Zenith Data Systems Corp ( letter of intent for merger)
Terminating an Offer
Revocation
Rejection
Counter Offer ( any changes is a new offer)
Time Lapse
Subject Matter Destroyed
Party who made the offer dies
Change of Law
Acceptance
Mirror Image Rules
Mailbox Rule ( regretful seller paradigm)
Express Authorization
Bilateral Contracts
A contract that the parties form once they exchange promises to perform the contract ( future)
Unilateral Contracts
Contract only happens when performing the terms of the offer ( future does not count)
Consideration
Value given in exchange for value
Hammer v Sidway
Hammer v Sidway
Consideration ( uncles 5k clean “clean life” payment )
Illusory Consideration
Value you exchange cannot be illusuory value
( a value that only is preexisting duty + past consideration)
Baugh v Columbia Heart Clinic
Baugh v Columbia Heart Clinic
12 month + 20 miles non complete case
Parties Lacking Capacity
Minors
Victims of Involuntary Intoxication
Mental Incompetence ( insanity and some disabilities)
Types of Illegal Contracts
Gambling Contracts ( in non gambling jurisdiction)
Contract with parties lacking required licenses
Contracts in restraint of trade ( Brown v Brown, Inc v Johnson
Brown v Brown, Inc v Johnson
Contracts in restraint of trade (2-year insurance industry global noncomplete)
Contracts that must be in writing
Prenuptial Agreements
Real Estate Contracts
Sales of Goods In excess of $500
Contracts that span more than one year
Discharge Obligation
Strict Performence ( complete)
Substantial Performance
Timeliness of Performance
Discharge of Agreement (5)
Discharge By Operation of Law
Substantial Performance
Good Faith Effort + Minor Deviation + substantially same outcome
Jacobs & Young v Kent ( construction company)
Timeliness of Performance
Minor Delay unless Time of the Essence
Discharge Agreement
Mutual Recession ( walking away together)
Novation ( substitute)
Settlement ( Doing Less)
Accord& Sastification ( Swapping the obligation)
Covenant not to sue ( extensions for cash)
Discharge by Operation of the Law (5)
Material Alteration ( adding money to check)
Statute of Limitations ( 5 years ended)
Bankruptcy
Commercial Impraticability ( Geopolitical)
Impossibility of Performance ( impossible)
