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40 Cards in this Set

  • Front
  • Back
A contract is... (give the definition)
To determine the rights of the parties, it must first be determined whether a valid, enforceable contract exists. A valid, enforceable contract consists of an offer, that is open for acceptance, acceptance, and is supported by adequate consideration.
An offer is ... (give the definition)
An offer is a promise to do or to not do something. It consists of intent, terms, that are certain and definite, and is communicated to the offeree giving the offeree the power of acceptance.
How is intent shown?
Judged by outward conduct (objective)
Shown through promise, an undertaking, or a commitment
Intent to memorialize
Prior conduct is important
What typically does not show intent?
Jokes, Opinions, Ads, Negotiations, Inquiry, Estimates, or Hopes, Intentions, Desires, or Predictions, or Price Quotes
What are the key terms?
Parties
Subject matter
Time for performance (UCC 2-309)
Price (UCC 2-305)
Which terms, if missing, do not cause failure for indefiniteness?
Time or price under C/L
UCC requires only quantity
Exception: output and requirement Ks
Offer open is ... (give the definition)
An open offer is an offer that is open for acceptance that has not been revoked or terminated. Open offer starts upon receipt of the offer.
When can an offer be revoked?
An open offer may be revoked at any time prior to acceptance unless made irrevocable -- even if offeror says it is irrevocable.
Revocation effective upon receipt
Equal communication of revocation is required
What are the four ways an offer can be made irrevocable?
PDO MFO
1. Partial performance (unilateral only)
2. Detrimental reliance
3. Option K
4. MFO signed, in writing, <= 90 days
For what reasons may an offer be terminated?
Death of offeror
Rejection or counteroffer
Condition stated in offer
Lapse of time
Adjudication of insanity of offeror
Supervening illegality
Death or destruction of subject matter
What is C/L acceptance?
Mirror image rule
Unequivocal assent to each and every term communicated to the offeror
Otherwise, rejection + counteroffer
Last shot: last form wins
What is UCC acceptance?
UCC 2-207
Where there is a timely and definite acceptance with additional or different terms, then there is an acceptance and the additional or different terms are proposals, which must be unequivocally assented to in order to become part of the contract. Unless both parties are merchants, then:
(1) Additional minor terms become part of the contract unless objected to within a reasonable amount of time; and
(2) Different minor terms become part of the contract unless objected to within a reasonable amount of time; OR
(3) Knock-Out Rule: The different terms “knock out” each other, and the gaps are filled by the UCC

If one or more of the parties send confirmations, the contract consists of:
(1) The terms agreed to prior to the confirmation;
(2) The terms in the confirmations that agree with each other; and
(3) The terms which do not materially vary the prior agreement and are not objected to within a reasonable amount of time
c) If there is no acceptance, but the parties proceed as though a contract was formed, the contract will consist of the terms on which the writings of the parties agree, and any other necessary terms filled in by the UCC.
How must acceptance be communicated?
1. Specified exclusive: only by terms stated
2. Specified non-exclusive: by terms stated or other reasonable method
3. Unspecified: any reasonable method
4. No acceptance by silence unless duty to speak
When is acceptance or rejection effective?
Acceptance not required for unilateral unless requested.
Acceptance on dispatch for bilateral.
MFO acceptance on receipt.
Option K acceptance on receipt
If reject, then accept, whichever arrives first
Rejection/revocation effective on receipt
What is consideration?
Each party promises to do something they were not legally bound to do, or gives up the right to do something they have the legal right to do.
What is consideration (bilateral K)?
Mutually bargained for exchange of contemporaneous legal detriment (MBECLD)
What is consideration (unilateral K)?
Bargained for exchange of legal detriment (BELD)
What is NOT consideration?
Past performance
Moral obligation
Gifts
Illusory promises (no real obligation to do anything) -- except output or requirement Ks
Pre-existing duty
Not a sham
When are contract modifications allowed?
1. C/L gross hardship or unforeseeable events
2. Restatement: fair and equitable
3. CA: in writing and in good faith
4. UCC: in good faith (a) consistent with fair dealing in the trade and (b) motivated by honest desire to compensate for exigencies
Are oral modifications allowed?
C/L allows no oral mods clause
UCC no oral mod clause is binding for merchant to non-merchant only if in writing and signed by non-merchant
What is accord and satisfaction?
Accord: agreement to settle (send a check)
Satisfaction: payment of accord (cash the check)
What is an unliquidated claim?
Unliquidated claim (disputed amount): "payment in full" satisfies unless payee disputes "rights reserved"
What is a liquidated claim?
Liquidated claim (undisputed amount): less payment marked "in full satisfaction" does not satisfy.
What is Promissory Estoppel?
In the absence of a valid, enforceable contract, promissory estoppel may be available where there is
1. a reasonable and foreseeable detrimental reliance on a promise that
2. was actually relied on, and
3. results in a loss, where
4. injustice can only be avoided by enforcing the promise.

Usually only reliance damages apply.
What are the defenses?
Mistake
Fraud in execution
Total failure of consideration
Illegality
Capacity
Fraud in inducement
Undue influence
Duress
Unconscionability
Writing
What are the three types of mistake?
Mutual mistake: subject matter only
Unilateral mistake: only if known and exploited
Reformation: like a typo
What is fraud in execution?
Agreeing to something you didn't think you were agreeing to by fraud (swapping paper, etc.)
What are the two types of illegality?
Malum prohibitum
Malum in se
What is locus poenitentia?
You may withdraw from an illegal K early but only if malum prohibitum.
What are the three types of capacity defense?
Minor (age)
Insanity
Intoxication
What is fraud in inducement?
Tricking you to sign by inducing you to do so.
What are the three types of fraud in inducement?
Intentional: as long as P relied on it
Unintentional (misrepresentation): only if material item
Nondisclosure: Not usually a defense, but if statute, fiduciary relation, failure to correct, concealment, half-truth, suretyship
What types of Ks fall under statute of frauds?
Marriage
Year (1)
Land
Executor
Goods
Suretyship
What is required for a K that falls under the SOF?
A memo of essential terms signed by the party against whom enforcement is sought.
What are the exceptions for SOF when there is no memo?
Marriage: mutual promise to marry
Year: Partial performance
Land: Payment made, possession taken, improvements made
Executor: N/A
Goods: Specially manufactured, goods accepted
Surety: Main purpose rule
What is the general parol evidence rule?
When there is a writing, PER makes inadmissible any prior or contemporaneous extrinsic evidence that supplements or contradicts the written terms.
What is a totally integrated K?
A writing where the parties intend to be final and complete without supplement or contradiction.
What is a partially integrated K?
A writing where the parties intend to be final but not complete and may be supplemented but not contradicted.
What is the completeness of integration test?
Is there a merger clause?
Does the writing appear complete (4 corners)?
Without merger clause, unless K is long and detailed unlikely court will find it totally integrated.
What are the exceptions to the PER?
Evidence pertaining to:
1. Separate agreements
2. Ambiguity
3. Defenses
4. Subsequent agreements