When is a Promise Enforceable Under Contract Law? Flashcards
Generally, a promise requires consideration to be enforced
Hamer
RST 2d § 71
Consideration Majority View: Bargained for performance or return promise (Bargain Theory)
RST 2d § 71
Benefit to the promisor may provide a fair inference (but not conclusive) that a performance is induced rather than a mere condition
Pennsy
Where a condition is merely necessary to the giving of a gift, it is considered a condition for a gratuitous promise, and not consideration
Tomczak
Courts do not generally inquire into the adequacy of consideration
Batsakis, RST 2d § 79
Forbearance from asserting legal claims is consideration so long as those claims were asserted in good faith (even if invalid)
Dyer, RST 2d § 74
Nominal consideration may be insufficient to support a promise
Schnell
Generally, Performance of a preexisting duty is not a valid consideration
RST 2d § 73
Assignment of a note from a this person may satisfy a debt
Birdsall
If the parties voluntarily agree to a modification that is fair and equitable in view of circumstances not originally anticipated by the parties it is enforceable
Angel, RST 2d § 89
If the parties voluntarily agree to a modification, it is enforceable
UCC § 2-209
A promise which should reasonably be expected to induce reliance and which is relied upon may be enforceable (if non-enforcment would be unjust). Remedy may be limited as justice requires.
RST 2d § 90
Promise which should reasonably be expected to induce reliance of a definite and substantial charter and which is relied upon may be enforceable (if non-enforcment would be unjust)
RST 1st § 90
Promise which should reasonably be expected to induce reliance of a definite and substantial charter and which is relied upon may be enforceable (if non-enforcment would be unjust)
RST 2d § 90
Where a condition is merely necessary to the giving of a gift, it is considered a condition for a gratuitous promise, and not consideration
Tomczak
Forbearance from asserting legal claims is consideration so long as those claims were asserted in good faith (even if invalid)
Dyer, RST 2d § 74 - Forebearance of Claims
Nominal consideration may be insufficient to support a promise
Schnell - Nominal Consideration
Generally, Performance of a preexisting duty is not a valid consideration
RST 2d § 73 - Pre-existing duty rule
Assignment of a note from a this person may satisfy a debt
Birdsall - Contract Modification
If the parties voluntarily agree to a modification that is fair and equitable in view of circumstances not originally anticipated by the parties it is enforceable
Angel, RST 2d § 89 - Contract Modification
A promise which should reasonably be expected to induce reliance and which is relied upon may be enforceable (if non-enforcment would be unjust). Remedy may be limited as justice requires.
RST 2d § 90 - Promissory Estoppel
Promise which should reasonably be expected to induce reliance of a definite and substantial charter and which is relied upon may be enforceable (if non-enforcment would be unjust)
RST § 90 (old rule) - Promissory Estoppel
Charitable subscriptions or a marriage settlement are still binding under promissory estoppel
RST 2d § 90 - Promissory Estoppel
Promisory estoppel may be a basis for enforcing a promise if the standard laid out by RST 2d § 90 is met AND the promisor INTENDED to induce reliance
Conrad - Promissory Estoppel
Past Material benefit to promisor may create a moral obligation that is binding as consideration
Webb - Material Benefit Rule (Promissory Restitution)
Promise made in recognition of past material benefit is binding to “extent necessary to prevent injustice”
RST 2d § 86 - Material Benefit Rule
In certain circumstances, restitutionary damages may be awarded even when there is no promise, user principles of quasi-contract
Restitution (Unjust Enrichment)
Preliminary agreements may be enforceable, even if parties anticipated the execution of a formal agreement, if the parties intended them to be binding. If an alleged contract is ambiguous, the parties’ intent to be bound is a question of fact.
Quake Construction
A contract may be enforced even though some terms are missing or left to be agreed upon, but if the essential terms are so uncertain that there is no basis for determining breach, there is no contract.
Academy of Chicago Publishing
If the parties intended a contract, the court is obligated to fill gaps, if it is reasonably able to do so. Courts should not void an agreement for lack of essential terms except as a last resort.
B. Lewis Productions
The terms of a contract must be reasonably certain - they must provide a basis for determining the existence of a breach and for giving an appropriate remedy
RST 2d § 33
A contract does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.
UCC §2-204
Duty of good faith and fair dealing is implied in all contracts, and may be used to help interpret terms
B. Lewis Productions
Every contract imposes upon each party a duty of good faith and fair dealing in its performance and its enforcement
RST 2d § 205
Exclusive dealings agreement imposes a mutual obligation to use best efforts
UCC 2-306
In determining whether an offer is made, we look to the objective reasonableness of the alleged offeree’s belief that there was an offer, or whether is was “evidently in jest.”
Lucy v Zehmer, Leonard v. Pepsico
Advertisements are not offers, but merely invitations for an offer of sale on the terms stated
Lefkowitz
Where the advertisement is clear, definite, and explicit, and leaves nothing open for negotiation, it constitutes an offer
Lefkowitz
Advertisements offering rewards for the performance of a specific action may be construed as offers to anyone who is induced to perform that action
Leonard v Pepsico (Carbolic Smoke Balls)
A reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to or different from those offered is not an acceptance but is a counter-offer
RST 2d § 59 (Mirror Image Rule)
An acceptance which requests a change or addition to the terms of the offer is not invalidated unless the acceptance is made to depend on an assent to the changed or added terms
RST 2d § 61 (Mirror Image Rule)
Acceptance of a bilateral (return promise) contract takes effect when manifestation of assent is SENT
RST 2d § 63(a) - Mailbox Rule
Acceptance of an Option Contract takes effect when manifestation of assent is RECIEVED
RST 2d § 63 (b)
The power of acceptance is terminated when the offer RECIEVES from the offer a manifestation of an intention not to enter into the proposed contract.
RST 2d § 42 - Revocation
For a Bilateral Contract, acceptance takes effect when performance is BEGUN
RST 2d § 62
For a Unilateral Contract, acceptance takes effect when performance is COMPLETED
RST 2d § 50
Where an offer invites an offer to accept by rendering a performance, no notification is necessary to make such an acceptance effective unless the offereror requests such a notification
RST 2d § 54
If an offer who accepts by rendering a performance has reason to know that the offeror has no adequate means of learning of the performance with reasonable promptness and certainty, the contractual duty of the offeror is discharged unless
(a) the offer exercises erasable diligence to notify the offeror of acceptance, or (b) the offeror learns of the performance within a reasonable time, or (c) the offer indicates that notification of acceptance is not required
RST 2d § 54
Generally, silence or inaction does not serve as valid acceptance, except:
(a) where the offeree takes the benefit with reasonable opportunity to reject and reason to know that they were offered with the expectation of compensation (b) Where the offeror has stated or given offeree reason to believe that acceptance could be made through silence or inaction and the offer intends to accept the offer (c) Where because of previous dealings or other it is reasonable that the offer should notify the offeror if he DOES NOT intend to accept
Houston Dairy, RST 2d. § 69
An offered who does any act inconsistent with the offer or ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. Offeror has option to ratify the acceptance.
RST 2d § 69
An offered cannot actually assent to an offer unless he knows of its existence
Specht v Netscape
A valid acceptance requires reasonable notice of the existence of contract terms and unambiguous assent to those terms by the offeree
Douglas v Talk America
