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4 Cards in this Set
- Front
- Back
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Types |
Express contract-oral or written Implied-in-fact- former by conduct Implied-in-law or Quasi-contract- remedy to prevent unjust enrichment
Unilateral- one promise. Contract not formed until perf is completed Bilateral- two promises. Contract is formed as soon as promises are exchanged
Executory- duties partially performed Executed- all of the duties have been performed
Common law "RISE" - real estate, insurance, services and employment UCC - sale of goods |
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Creation of contract |
1. Offer and acceptance 2. Exchange consideration 3. No defenses
1. Intent to make contract, ads are not offers except when specifying offerer "rewards" Terms must be definite and certain: UCC-quantity; RISE-all terms Communication to offeree (no knowledge, no acceptance)
Termination of offer - must be accepted first #1. Revocation by offeror anytime before acceptance -oral or written -direct or indirect (sell to someone else) -publication through comparable means EXCEPTIONS to revocation: Option contract (offeree buys time) Offeree begins to perform on unilateral contract Merchant's firm offer (written) #2. Rejection by offeree -express rejection or counteroffer (rejection and offer) -merely asking a question is not a counteroffer -lapse of time must be reasonable, silence is rejection #3. Termination by operation of law -death or incompetency - automatic -destruction of subject matter -illegality
Acceptance: -Method is any manner except when offeror specifies -Acceptance must follow "mirror image rule" for common law; UCC had no mirror image rule -generally effective when mailed "mailbox rule"(offers, rejections, revocations, counter offers are effective when received) EXCEPTION to mailbox rule: Had to specify in offer that acceptance must be "received"
2. Consideration -legal value: promisor's promise is supported by consideration only if the promisee agrees to do something he or she is not already obligated to do -bargained for exchange: gift is not enforceable unless donating to charity and they are detrimentally relying on it, past or moral consideration is not a bargain because something had already been done before the promise -need not have monetary value -promise can be made to third party -fairness not required if not related parties (arm's length) -preexisting legal duties generally not sufficient consideration; exception: new of different consideration given then the modification is enforceable for RISE but for UCC, good faith is enough
3. Defenses can make a contract void or voidable -fraud-MAIDS (material misrepresentation, actual reliance, induce reliance, damages are compensatory and punitive, scienter) -fraud in the execution VOID -fraud in the inducement (terms) VOIDABLE -innocent misrepresentation does not involve scienter - no punitive -if harm threatened is physical force VOID -if harm threatened is economic or social VOIDABLE -undue influence: abuse of a position of trust or confidence (not arm's length so fairness required) -mutual mistake of both parties as to material fact regarding the contract; stolen/destroyed subject matter VOID -unilateral mistake of one party is generally NOT a defense except if it's material the other party knew or should have known of the mistake -illegality generally VOID; Failure to have license to protect the public (i.e. CPA, attorney, doctor, realtor) VOID; Failure to have license to raise revenue - contract enforceable; Promises not to compete enforceable if reasonable (no stealing trade secrets, duration, distance) -Minors may generally cancel contracts except contracts for necessities (food, clothing, shelter) and except ratifying contract as adult -Intoxication -mental incompetency VOIDABLE unless he is adjudicated mentally incompetent VOID
Statute of Limitations: 4-6 years RISE, 4 years UCC, measured from date of breach
Statute of Frauds - contract requiring a writing and signed by defendant: MYLEGS Involving marriage Multiyear (cannot be performed within a year)-measured from date of contract Land (real property): exception->leases for less than a year and full or partial perf Executors Sale of goods ($500 or more) Surety (pay debt of another if it is collateral to the other's promise to pay)
Impossibility: destruction of subject matter or death
Accord and satisfaction and substituted contract: same parties, new agreement
Novation: same agreement, substituted party (release of original party)
Conditions: Condition precedent (qualify for a mortgage) Condition concurrent (store purchase) Condition subsequent (engagement ring)
Prevention of perf is a breach
Parole evidence rule "final": Oral or written statements made prior to written contract prohibited Oral or written statements made after the contract are admissible
Unconscionability - extremely unfair |
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Remedies (when a party fails to perform something he or she is contractually obligated to do) |
Breach: Material or substantial or intentional RISE, nonbreaching party can be discharged from contract
Anticipatory repudiation-> immediately sue, await the time for perf then sue, cancel the contract
Damages: Compensatory-the diff bet cost of substitute perf and contract price) Consequential-collect damages that are reasonable foreseeable OR Specific performance used with land or unique items (money is inadequate)
Punitive damages NOT available for breach of contract but yes for fraud
Recisssion or cancellation of contract unless substantially performed (RISE) but buyer may breach anytime for UCC
Quasi-contract (restitutional) damages:one party confers a benefit on another at the other's request and with a reasonable expectation of being compensated
Limitations on monetary damages: Reasonable efforts to avoid damages (landlord)
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Third-party rights |
Intended third-parties can enforce : donee and creditor beneficiaries
General rule: any contract right may be assigned and any contract duty may be delegated Exception: assignment will change obligor's risk (insurance) or involves specialized personal services Delegation and assumed mortgages: both parties liable Subject to mortgage: person who took this is not personally liable
Assignment of AR is permitted even if contract prohibits it Once debtor receives notice of assignment, then payments must be made to assignee No writing necessary Defense is breach |
