Contracts Issues

Front 1

•If there is not a “meeting of the minds” and if it is just a mistake, is a contract binding, even with signatures from both parties?

Back 1

• YES. Absent fraud, duress, or mutual mistake, that one having the capacity to understand a written document who reads and signs it, or, without reading it or having it read to him, signs it, IS BOUND BY HIS SIGNATURE. (Ray v. Eurice Bros)

Front 2

•Are you ever legally obligated to enter into a contract.

Back 2

Rarely, contracts are voluntary. (Hurley v. Eddingfield)

Front 3

Is there a contract if the offeror claims that he lacked contractual intent and that he was joking or bluffing?

Back 3

YES. As long as the offeree meets the objective standard (what a reasonable person would think) and had no reason to believe the offeror was joking or bluffing. (Lucy v. Zehmer)

Front 4

•If it is not explicitly explained or ambiguous is an offer is bilateral or unilateral, how do you decide between the two?

Back 4

Courts lean towards bilateral contracts. Bilateral contracts are accepted by promise to perform. Unilateral contracts are only accepted by actual performance. (Davis v. Jacoby)

Front 5

Difference between UCC and R.2d with acceptance.

Back 5

R.2d uses "mirror image rule" and "last shot rule" where UCC does not.

Front 6

Under Battle of Forms, when will a proposed term NOT become part of the contract?

Back 6

1.When the proposed new term materially alters the terms of the original agreement.

2.When the original offer expressly limited the terms of the contract to the original offers terms.

3.When the offeror objects to the new terms, either beforehand or shortly thereafter.

Front 7

Is forbearance on the part of a promisee sufficient consideration to support a contract?

Back 7

YES. Forbearance is valuable consideration. The party who abandons (forbears) some legal right in the future as an inducement for a promise gives sufficient consideration to create a legally binding contract. (Hamer v. Sidway)

Front 8

•Can promissory estoppel apply when the acceptance is after an offer has been made for a project in the case of contractors and suppliers?

Back 8

•YES. If the plaintiff can establish that a definite promise made by the Δ with the reasonable expectation that it would induce action of a definite and substantial character on π’s part; that plaintiff had acted in justifiable reliance upon the promise to its detriment; and that injustice can be avoided only by enforcement of the promise.

Front 9

To what extent does the seller have to bring an implied warranty disclaimer to the buyer's attention for the disclaimer to be valid?

Back 9

The disclaimer must be conspicuous and in usually in writing. (Hunt v. Perkins Machinery)

Front 10

•If an employer makes threats of discharge to an employee, is this considered duress, therefore, releasing the employee from the contract?

Back 10

YES. (1)No equal footing,
(2)great economic disparity,
(3) No equal bargaining power
(4) the threat was real.
there is duress or coercion. (Mitchell v. CC Sanitation)

Front 11

•Can financial difficulty by itself constiute duress, even if the duress was not caused by the defendant.

Back 11

NO. The mere stress of business conditions will not constitute duress where the defendant was not responsible for the conditions. (Selmer v. Blakeslee)

Front 12

When is an action not in "good faith?"

Back 12

An action in bad faith after the formation of the contract is: opportunistic behavior in an ongoing contractual relationship that would violate the duty of good faith performance however the duty is formulated. (Market Street Associates v. Frey)

Front 13

•In determining the measure of damages, should the plaintiff be awarded based on the “diminution in value rule,” or the “cost of performance rule” in a contract where the cost to fulfill the contract is significantly higher than the value it would add to the plaintiff’s property.

Back 13

Diminution in Value. If benefit of removing coal would add $300 to value of property and the cost of removing would be $29,000, damages should be $300. (Peevyhouse v. Garland Coal)

Front 14

•When does conflicting and intentionally misleading words in an advertisement, even if the dealer had not intended the language to constitute a binding offer, creates a binding offer

Back 14

Extreme level of detail. (Izadi v. Machado Ford)

Front 15

•Can mere “silence or inactivity” constitute acceptance, when the offeree knew that the offeror has commenced performance, therefore binding him to arbitration.

Back 15

YES. An offeree, who, knowing that the offeror has commenced performance, fails to notify the offerror of its objection to the terms of the contract within a reasonable time, can, under certain circumstances (where the court will consider previous relations) will be deemed to have assented to those terms.

Front 16

Can unmarried parties start quasi-contracts, therefore allowing parties to split assets upon break-up?

Back 16

Nonmarital partners are not entitled to division of community property, but the courts will instead enforce express agreements between the parties to the extent that these agreements do not rest on an unlawful meretricious consideration. (Marvin v. Marvin)

Front 17

•Can a court make a Δ liable for damages, finding that the Δ fraudulently concealed information from the π.

Back 17

YES. If either party to a contract or sale conceals or suppresses a material fact which he is in good faith bound to disclose, then his silence is fraudulent. (Obde v. Schlemeyer)

Front 18

•Upon death, what are the legal consequences of an offeree beginning performance of a unilateral contract?

Back 18

Beginning performance of a unilateral contract creates a contract that renders the offer irrevocable until the offeree has had a reasonable time to complete performance. (Brakenbury v. Hodgkin)

Front 19

Even if there is not a duty to disclose, when can misrepresentation be assumed.

Back 19

Sheer volume of flattery and volume of purchases. (Vokes v. Arthur Murray)

Front 20

If one term is unconscionable is the entire contract voidable?

Back 20

Not usually, but sometimes, where no meaningful choice was exercised by one of the parties (for example unreasonable bargaining power) then if the terms are so extreme as to appear unconscionable according to the mores and business practices of the time and place, then the contract is not enforceable. (Williams v. Walker-Thomas)

Front 21

•Can a low bidder for a public contract refuse to enter into a contract because of a mistake in the bid without forfeiting the bid bond (guaranteed money to Marana, usually used to insure that the contractor will do the work.)

Back 21

YES.
1.The mistake must be of such grave consequences that to enforce the contract as made or offered would be unconscionable

2.The mistake must relate to a material feature of the contract

3.The mistake must not have come about because of the violation of a positive legal duty or from culpable negligence

4.The other party must be put in status quo to the extent that he suffers no serious prejudice (detriment) except the loss of the bargain. (Maran v. Aetna)

Front 22

Is a requirement contract (contract requiring someone to buy goods) essentially an option to the buyer, allowing him to breach.

Back 22

YES. Courts allow a buyer to reduce his requirements to zero if he was acting in "good faith," even though the contract contained an estimate of those requirements. However, if he can't state a reason for the breach, then he is held liable. (Empire Gas v. American Bakeries)

Front 23

Does trade usage factor into a contract, even if one party did not know of such a usage?

Back 23

• 1) YES A party who seeks to interpret a contract’s ordinary terms in a narrower sense than is used in everyday trade has the burden of proof to establish that meaning.
• 2) YES. Parol evidence is admissible to show the meaning of an ambiguous term and its usage in a contract. (Frigaliment Importing v. B.N.S.)

Front 24

If a contract stipulates that all modifications must be written, if the offeror watches performance, has he waived that condition?

Back 24

YES. The effectiveness of a non-written modification in spite of a contract condition that modifications must be written depends upon whether enforcement of the condition is or is not barred by equitable considerations, not upon the technicality of whether the condition was or was not expressly and separately waived before the non-written modification. (Universal Builders v. Moon)

Front 25

If a license is included in a package, does the buyer have to agree that license (arbitration agreement)?

Back 25

YES. If the buyer has a chance to read the license, and fails to object within a reasonable amount of time, he is deemed to have accepted the contract and is bound by the terms. (ProCD v. Zeidenberg)

Front 26

Does the battle of the forms differ between merchants vs. between a merchant and non-merchant?

Back 26

YES. If between merchants, the proposals are binding in the contract.

If between a merchant and a non-merchant, the propasals are not binding unless there is an express statement stating that the seller is unwilling to proceed with the transaction unless the buyer agrees to the added or different terms. (Klocek v. Gateway)