Contracts

Front 1

promissory estoppel

Back 1

- allows recovery without consideration:
o (1) Must be reasonable reliance/ suffered a detriment,
o (2) Promisor must reasonably expect to induce reliance,
o (3) and the relief must be necessary to avoid injustice. (objective standard of a reasonable person, not whether the plaintiff actually relied on the promise)
 unless it’s a charitable/marriage k, then you don’t need proof that it induced action/forbearance.

Front 2

Restitution.

Back 2

o A promise made in recognition of a benefit previously received by the promisor form the promisee is binding to the extent necessary to prevent injustice
o A promise not binding under (above)
 if the promisee conferred the benefit as a gift or for other reasons the promisor has not been unjustly enriched;
 to the extent that its value is disproportionate.

Front 3

Firm Offer.

Back 3

o under restatement: An offer is binding as an options k if it;
 is in writing and signed by the offeror, recites a purported consideration for the making of the offer, and proposes an exchange on fair terms within a reasonable time; or
 is made irrevocable by statute
o An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does not induce such action or forbearance is binding as an option k to the extent necessary to avoid unjust enrichment.
o Under the UCC: An offer to buy or sell goods in a signed writing which by its terms gives assurance that it will be held open is not revocable, for lack of consideration, during the stated time, or if no time stated for a reasonable time, but in no event may such period of irrevocability exceed three months, buy any such term of assurance on a form supplied by the offeree must be separately singed by the offeror.

Front 4

Offer

Back 4

• Clear, definite statement of the terms.
• Certainty:
o terms must be reasonably certain. They are certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy. The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or acceptance.

Front 5

option k

Back 5

an extended offer. Promisor manifests their intent to be bound, but promisee doesn’t have to immediately respond. It meets the requirements of a contract, but limits the promisor power to revoke. There must be consideration for the option contract, but the consideration can be nominal.

Front 6

Acceptance

Back 6

• Offeror is master of the offer, may specify how the offer is to be accepted.
o if offer only suggests a mode of acceptance, other modes are not precluded.
• Acceptance of an offer must be manifested by some appropriate act. A mental determination not indicated by speech or put in course of indication by act to the other party, is not an acceptance which will bind the other.
• A reasonable time for acceptance is used when the offer doesn’t specifically state how long the offeree has to accept. A reasonable time is very fact specific.
• A unilateral k is acceptance by performance. If performance has started, P cannot revoke offer.
• Mailbox rule- Acceptance is effective upon dispatch. (unless they say not acceptable by mail)

Front 7

Accpetance under the UCC.

Back 7

o A definite and seasonable expression of acceptance or a written confirmation which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon, unless acceptance is expressly made conditional on assent to the additional or different terms.
o The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless:
 the offer expressly limits acceptance to the terms of the offer;
 they materially alter it; or
 notification of objection to them has already been given or is given within a reasonable time after notice of them is received.
o conduct by both parties which recognizes the existence of a k is sufficient to establish to establish a k for sale although the writings of the parties do not otherwise establish a k. In such case the terms of the particular k consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provision of this act.

Front 8

Revoking an offer

Back 8

• Lapse of time
o specifically stated in K or “reasonable time”
• Revocation
• Death/incapacity of Offeror.
• Rejection
• counter-offer.

Front 9

Statute of Frauds

Back 9

if they admit it, the statute does not apply, its used for evidentiary purposes. • Marriage
• Year-long
o Does not apply to an agreement that is capable of performance within a year, even if a longer period of performance is probable. The agreements covered are those that “really cannot” be performed within a year.
o A contract that is initially within the one-year clause may be “taken out,” according to most courts, by the fact that the person seeking to enforce it has completed performance.
• Land
o Partial payment of the purchase price alone will not constitute part performance sufficient to enforce an oral contract, we have recognized partial payment considered in connection with other facts, such as the making of substantial improvements, will remove the contract form the statute of frauds.
• Executor of estate/wills
• Goods over $500
o UCC 2-201
o if it’s a custom good it doesn’t have to be written.
• Suretyship
o Main purpose doctrine. Its for their benefit not the benefit of the debtor. wherever the main purpose and object of the promisor is not to answer for another, but to subserve some purpose of his own
• P does not have to personally sign, someone who is allowed to sign for him may do so.

Front 10

Incapacity

Back 10

• minors
o For most purposes the age is 18.
o the general rule is that “the contract of a minor, other than for necessaries, is either void or voidable at his option.” The only exceptions to the rule permitting disaffirmance are statutory or involve contract which deal with the duties imposed by such as a contract of marriage or an agreement to support an illegitimate child.
 Unless goods/services are for necessaries.
o May disaffirm a k a reasonable time after reaching the age of majority.
o Can get restitution for payments already made, but must return the goods.
**cannot use as a sword rather than a shield.
Mentally ill:
o A person incurs only voidable contractual duties by entering into a transaction if by reason of mental illness of defect
 he is unable to understand in a reasonable manner the nature and consequences of the transaction; or
 he is unable to act in a reasonable manner in relation to the transaction and the other parties has reason to know of his condition.
o Where the k is made on fair terms and the other party is without knowledge of the mental illness or defect, the power of avoidance under subsection (1) terminates to the extent that the k has been so performed in whole or in part or the circumstances have so changed that avoidance would be unjust. In such a case, the court may grant relief as justice requires.
• Intoxicated persons.
o must be unable to act/understand in a reasonable manner.

Front 11

Inadequate consideration

Back 11

the court will generally not look into the adequacy of consideration. Only if its so unfair that its unconscionable.

Front 12

Duress

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by improper threat of the other party and victim has no reasonable alternative, it is voidable at victims option.
o threat of civil action if made in bad faith is duress.

Front 13

undue influence

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• undue influence includes taking an unfair advantage of another’s weakness of mind, or taking a grossly oppressive and unfair advantage of another’s necessities or distress. Characteristics of over-persuasion:
• discussion of the transaction and unusual or inappropriate time
• consummation of the transaction in an unusual place
• insisted demand that business be finished at once
• extreme emphasis on untoward consequences of delay
• the use of multiple persuaders by the dominant side against a single servient party
• absence of third party advisers to the servient party
• statements that there is not time to consult financial advisers or attorneys.

Front 14

concealment

Back 14

every seller is liable who fails to disclose any non-apparent defect known to him in subject of the sale which materially reduces it value and which they buyer fails to discover. (termites in house)
• Dealers in specialty goods- not under an obligation to tell you their special knowledge. If you had obtained an antique dealer, its different b/c you have contracted them and purchased their knowledge. In the first situation, they don’t have to disclose their information to you.

Front 15

misrepresentation

Back 15

generally, a misrepresentation, to be actionable, must be one of fact rather than of opinion. It does not apply where there is a fiduciary relationship between the parties, or where there has been some artifice or trick employed by the representor, or where the parties do not in general deal at “arms length” as we understand the phrase, or where the representee does not have equal opportunity to become apprised of the truth or falsity of the fact represented.
• P must establish that the d made the misrepresentation knowing it to be false, or at least with reckless disregard for its truth. misrepresentation must be a material one.
• Some degree of diligence is required of a party who relies on another’s statement.
• The complaint must show justifiable reliance.

Front 16

Adhesion k and unconscionability

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• Standard form k, take it or leave it basis. Usually no room for negotiating terms.
• Contracts by which one seeks to relieve himself from the consequences of his own negligence are generally enforced unless (1) it would be against the settled public policy of the state to do so, or (2) there is something in the social relationship of the parties militating against upholding the agreement. Use of a form contract does not of itself establish disparity of bargaining power. Judicial interpretations of public policy cannot readily take account of sporadic and transitory circumstances. O’Callaghan, P fell while walking in apartment court.

Front 17

agreeing to boiler plate

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• Disclaimers on contracts of a much less formal nature (tickets, stubs, passes that are regularly issued to customers of laundries, parking lots, coat checks, and the like.)
• Magnuson Moss provides that a customer may insist on a replacement or refund after the merchant has made a reasonable number of unsuccessful attempts to repair a defect.
• Graham v. Scissor Tail: A contract of adhesion is fully enforceable according to its terms, unless certain other factors are present which under established rules operate to render it otherwise. There are 2 judicially imposed limitations of the enforcement of adhesion K’s. first is that such a K/provision does not fall within the reasonable expectations of the weaker or adhering party will not be enforced against him, the second a contract or provision, even if consistent with the reasonable expectations of the parties, will be denied enforcement if, considered in its context, it is unduly oppressive or “unconscionable.”

Front 18

Duty to read/disclose

Back 18

the general principal is, in the absence of fraud, one who does not chose to read a K before signing it, cannot later relieve himself of his burdens; however, provisions which clearly tend toward injury of the public will be declared void as against public policy. Freedom to K is a factor of importance.: forum-selection clauses, although not historically favored, are prima facie valid. Including a reasonable forum-selection clause in a form ticket contract of this kind well may be permissible fore several reasons: first, a cruise line has a special interest in limiting the flora in which it potentially could be subject to suit. Because a cruise ship typically carries passengers from many locales, in is not unlikely that a mishap on a cruise could subject the cruise line to litigation in several different for a. additionally it dispels confusion about where a case must be brought. It does not violate fundamental fairness because it was not done to discourage suits.

Front 19

unconscionability

Back 19

• UCC 2-302, authorizes a court to refuse enforcement or to limit the application of a K or clause that it determines to have been “unconscionable”
• Restatement §208
• Williams v. Walker-Thomas Furniture Co. pg 403. where the element of unconscionablity is present at the time a K is made, the K should not be enforced. Unconscionabliity has been recognized to include an absence of meaningful choice. Clients were on welfare.
• look to disparity in bargaining power.
The arbitration must meet, the provision of adequate discovery, a certain minimum requirements, including the neutrality of the arbitrator, the provision of adequate discovery, a written decision that will permit a limited form of judicial review, and limitations on the cost of arbitration. If the K is adhesive, the court must consider other factors, that if present, render the K unenforceableIt is unfairly one-sided for an employer with superior bargaining power to impose arbitration but not accept such limitations when it seeks to prosecute a claim without at least some reasonable justification for such one-sidedness based on “business realities”