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66 Cards in this Set
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Florida Contracts
Formation |
In order to have an enforceable contract, there must be MUTUAL ASSENT in the form of an offer, ACCEPTANCE, CONSIDERATION (or some substitute there of, promissory estoppel) and NO VALID DEFENSES to the contract
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CONTRACT:
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A contract is a promise that is enforceable by law. It usually has two basis elemnts: MUTUAL ASSENT (meaning each party must intend to enter into the K and must agree to do so on mutually acceptable terms) and CONSIDERATION (bargined-for-exchange).
FORMATION: In order to have an enforceable K, there must be (1) and OFFER; (2) ACCEPTANCE; and (3) CONSIDERATION; and (4) NO DEFENSES. |
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Florida Contracts
Offer |
Objective expression of promise, undertaking or commitment to enter into a contract
Requires 1. definite and certain terms 2. communicated to the Offeree 3. - DEATH, Insanity, destruction of subject matter, supervening illegality |
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What will constitute a valid OFFER?
(3) Elements of an Offer: |
OFFER: A valid offer must create a reasonable expectation in the offeree that the offeror is willing to enter into a K on the basis of the offered terms.
Elements of an OFFER: (1) I.D. of the offeree; (2) Definiteness of the SM (ESSENTIAL K TERMS); (3) COMMUNICATION to offeree. [Write... "This offer contains all the essential terms to make the K capable of being enforced: Parties, Price, SM, Time of Pmt/Perform. [Facts] The offer and acceptance need not contain all the details, if its clear there was a meeting of the minds as to the essential K terms.] |
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Florida Contracts
Offer Termination (offeror) |
Offer may be accepted as long as it has not been terminated by act or operation of law
- OFFEROR - revocation plus offeree awareness, effective when received, generally revoed at will unless 1. option supported by consideration 2. unilateral contract whre the offeree has embarked on performance (normally construed as option giving offeree reasonable time to complete performance) 3. Foreseeable deterimental reliance by offeree 4. MERCHANT Firm offer rule - signed writing by general merchant dealing in goods of a kind, promising to hold the offer open for a period of time not to exceed 3 months |
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OFFERS - COMMON LAW
MATERIAL TERMS |
Common Law Essential K Terms:
(a) Parties (b) Subject Matter (c) PRICE [Under the common law, LAND Ks require: price, parties and land description] A LAND K must be in WRITING and SIGNED by the party to be charged, but the writing need not be a formal K; a memorandum suffices. The SOF requires that writing contain all ESSENTIAL TERMS of the K. These are: (i) a DESCRIPTION of the property, (ii) identification of the PARTIES to the K, and (iii) the PRICE and manner of payment (if agreed upon). General K PRINCIPLES require that there be MUTUAL ASSENT (offer and acceptance), CONSIDERATION (or some substitute therefor), and NO DEFENSES to creation of the K. |
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Florida Contracts
Offer Termination (offeree) |
Rejection, effective when received,
Indirect rejection in form of - COUNTEROFFER - Conditional acceptance (if, only if, provided, so long as, but, on condition that) - DEATH, Insanity, destruction of subject matter, supervening illegality |
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OFFERS - UCC
MATERIAL TERMS |
UCC Material K Terms:
QUANTITY UCC has no price requirement. The offer is an offer if the parties so intend. Quality is the only required K term - UCC "gap fills" will supply the rest if not agreed upon by the parties. |
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Florida Contracts
Acceptance |
Offeree with power to accept objectively communicates in unequivocal terms
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OFFERS: REVOCABILITY
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[Assuming there was a valid offer, an offer can generally be revoked prior to acceptance by the other party. A revocation is generally effective when received by the offeree.]
Generally, an offer is revocable. However, an offer will become IRREVOCABLE if: (1) OPTION K: Consideration was paid to keep the offer open for a certain period of time. (Must be timely exercised or the option lapses) (2) FIRM OFFER: Offeror was a Merchant who signs a written offer giving assurances that it would be held open for a period of time not to exceed 3 months. (No consideration required) (3) DETRIMENTAL RELIANCE: Offeror could reasonably expect that the offeree would rely on the offer, then the offer will be irrevocable for a reasonable period of time. (4) UNILATERAL K: The offer was for a unilateral K in which performance has begun (the offeree has a reasonable time in which to perfom. |
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Florida Contracts
Acceptance Terms |
Acceptance in terms that mirror the offer unless UCC permits an acceptance that varies from offer, whether the offer terms or acceptance govern depends on the status of the parties
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OPTION K
(Common Law) |
OPTION K (Common Law)
(1) Offeror promises to keep offer open for a specific period of time (if not time stated, the offer will be held open for a "reasonable period of time") (2) Offeree pays consideration - In FLORIDA, an option K requires "SUBSTANTIAL" CONSIDERATION (3) The option must be timely and properly exercised (4) Options are assignable |
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Florida Contracts
Acceptance Terms Non-Merchants |
Terms of the offer govern!
New/different terms are proposals |
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UCC MERCHANT'S FIRM OFFER RULE
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UCC Merchant's "Firm Offer" Rule:
A "FIRM OFFER" is an offer by a MERCHANT to buy or sell goods in a signed writing that, by its terms, gives assurances that it will be held open. It is not revocable for lack of consideration during the time stated, up to 3 months. (1) MERCHANT -- Offer to buy or sale goods; (3) SIGNED, WRITTEN promise to keep the offer open; (4) NO consideration required; (5) Open up to 3 Months. |
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Florida Contracts
Acceptance Terms Merchants |
Additional terms become integrated unless
1. they materially alter the agreement, 2. the offer expressely limits acceptance to the terms of the offer 3. or offeror objects within a reasonable time Different terms are treated as ADDITIONAL terms or KNOCKED OUT |
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K FORMATION - OFFER & ACCEPTANCE
General Rules for Effective Offers & Acceptance: |
General Rules for Effective Offers & Acceptance:
(1) Offer are effective when RECEIVED. (2) Rejects are effective when RECEIVED. (3) Revocations are effective when RECIEVED. Under the MAILBOX RULE: (a) An acceptance is generally effective when SENT (b) When an offeree sends a REJECTION and THEN AN ACCEPTANCE, the Mailbox Rules does NOT apply, and the 1st communication to be received is effective. (c) When an oferee sends an ACCEPTANCE and THEN A REJECTION, the Mailbox Rule generally applies, UNLESS the offeror receives the rejection 1st and CHANGES his POSITION IN RELIANCE on it. |
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Florida Contracts
Acceptance Mailbox Rule |
Under the mailbox rule, if acceptance is by MAIL and is properly addressed and stamped, it is effective upon dispatch HOWEVER doesnt apply if:
1. offer stipulates that acceptance is not effective until received 2. in option contracts because acceptance is not effective until received (FLORIDA exemts option contracts from mailbox rule) 3. Offeree sends rejection then sends acceptance (1st to receive controls) 4. Offeree sends acceptance then rejection (acceptance is effective unless rejection arrives first and offeror detrimentally relies) |
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Acceptance
Modern Rule (UCC and 2nd Restatement Rule) |
The Modern rule as provided by the UCC and the Second Restatement, however, provides that an offer may be accepted by any "medium reasonable in the circumstances." [UCC 2-206]
The offeror may limit acceptance to a particular means, but he must do so unambiguously since any ambiguity will allow the offeree to use any reasonable means. |
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Florida Contracts
Consideration Defined |
Bargained for exchange of legal value
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ACCEPTANCE
Additional Terms CL / UCC |
At common law (CL), any different or additional terms in the acceptance rendered the response a REJECTION and a COUNTER-OFFER. (i.e., No K)
The UCC, for Ks for the sale of goods, provides that the proposal of additional or different terms by the offeree in a definite and timely acceptance does not constitute a rejection and a counter-offer... Instead, the acceptance is effective - unless it is expressly made conditional on assent to the additional terms. -- Whether the additional terms become part of the K depends on the status of the parties: • If ONE or both parties to the K is NOT a Merchant, the new terms do not become part of the K unless the offeror agrees. • If BOTH are Merchants, the new terms automatically become part of the K - unless: (i) they materially alter the original terms; (ii) the offer expressly limits acceptance to the terms of the offer, or (iii) the offeror objects to the new terms within a reasonable period of time (10 days). |
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Florida Contracts
Consideration Bargained for exchange |
bilateral promises, unilateral promise for act
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OFFER
+ ACCEPTANCE + Mailbox Rule |
OFFER: An offer is a promise or commitment to enter into a K, communicated to the offeree so as to reasonably lead the offeree to believe that acceptance of the offer will result in a K.
ACCEPTANCE: Ks may be accepted by a manifestation of assent to the terms in the offer, communicated directly to the offeror or by the offeree's performance of an act stipulated in the offer. Most courts today hold that an offer may be accepted by any medium reasonable in the circumstances, unless the offeror limited it to a particular means. Under the "Mailbox Rule," acceptance by mail or similar means creates a K at the moment of dispatch, provided that the mail is properly stamped and addressed, unless: (i) the offer stipulates that acceptance is not effective until received; or (ii) an option K is involved. A revocation is effective only upon receipt. Accordingly, under the "mailbox rule," if the offeree dispatches an acceptance before he receives a revocation sent by the offeror, a K is formed. This is true even though the acceptance is dispatched after the revocation is dispatched and received after the revocation is received. [Note: Acceptance under an option K is effective only upon receipt.] |
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Florida Contracts
Consideration Legal value |
Fla follows the minority which requires a legal benefit or detriment, courts do not inquire into the adequacy/fairness of consideration
NO TOKEN, SHAM, ILLUSORY CONSIDERATION However a SEAL imports Consideration |
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CONSIDERATION:
The K included valuable consideration on both sides of the bargain; there was a... |
CONSIDERATION:
...there was a "Bargained-for exchange" of mutual legal benefits and detriments (FL follows the minority and 1st Restatement view that either a benefit to one party or detriment to the other party will suffice). • FLORIDA: Consideration is present if there is EITHER a BENEFIT to one party OR a DETRIMENT to another. [[Note: Option Ks in FL require "substantial" consideration.]] |
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Substitutes for Consideration:
DETRIMENTAL RELIANCE (Promissory Estoppel) [[ "If a party want DR they better be PERDI" ]] |
DETRIMENTAL RELIANCE - Elements:
(Promissory Estoppel) (1) PROMISE is made by one party to another; (2) Type of promise that D should reasonably EXPECT the P to RELY on; (3) P did in-fact rely on it to his DETRIMENT. (4) INJUSTICE would result if promise not enforced. [Remember: "If a party want DR they better be PERDI"] Under the doctrine of PE/DE, a promise is enforceable to the extent necessary to prevent injustice if: (i) the promisor should reasonably expect to induce action or forbearance; (ii) of a definite and substantial character, and (iii) such action or forbearance is in-fact induced. |
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Florida Contracts
Consideration Pre-Existing Legal Duty |
Generally, performing or promising to perform an existing legal duty is insufficient consideration UNLESS
1. new/ different consideration (slight deviation in terms will constitute the requisite consideration to support modification) 2. ratification of voidable obligation 3. honest dispute, forebearance to sue if claimant beleived in good faith valid claim 4. UCC, good faith agreement modifying contracts need no consideration |
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Florida Contracts
Consideration Substitutes for consideration PE and DR |
1. promisor reasonably expects
2. her promise to induce action/forebearance of a definete and substantial character 3. that is in fact induced |
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Florida Contracts
Defenses Formation Mutual Basic Material Mistake |
Mistake by both parties that a basic assumption, has a material adverse effect on the agreed-upon exchange, and the adversely affected party did not assume the risk (conscious ignorance or mistkae in value no-defense)
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Florida Contracts
Defenses formation Unilateral Mistake |
Not a defense unless the nonmistaken party shold have known if yes then VOIDABLE by mistaken Party
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Florida Contracts
Defenses formation Transmission |
Not a defense unless the nonmistaken party shold have known if yes then VOIDABLE by mistaken Party
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Florida Contracts
Defenses formation Intoxication |
Not a defense unless the nonmistaken party shold have known if yes then VOIDABLE by mistaken Party
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Florida Contracts
Defenses formation Latent Ambiguity |
If ambiguous term then result depends on parties awareness of ambiguity
1. Neither or both parties aware -- no K unless BOTH intended the same meaning 2. One aware - binding contract basedon what the IGNORANT party reasonably subjectively beleived the meaning Fraud in the inducement (misrepresentation) - voidable by the innocent party (void if fraud in the factum) |
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Florida Contracts
Defenses Formation Capacity |
Infant: persons under 18 lack capacity to contract unless NECESSITIES & pregnant minor who contracts for medical services related to pregnancy, then FMV
Voidable at option of Infant, upon reaching the age of majority the infant may affirm her obligation Minor may be estopped from raising legal incapacity as a defense to enforcement if minor induced the other party to enter into the K by fraudelent mistrepresenting that he had reached aged of majority Duress, Coercision |
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Florida Contracts
Defenses Enforcement statute of limitations |
In fla the SOL for a written K is 5 years and 4 years for an Oral K
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Florida Contracts
Defenses Enforcement Illegality |
Fla requires that illegality be alleged and proved by the party who asserts it (not automatic).
Covenants not to compete in connection with busienss sale dissolution of partnership use of trademark or service mark ALL statutorily approved |
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Florida Contracts
Defenses Enforcement SOF |
Certain agreements must be in writing/ evidenced by a memorandum and signed by the party to be CHARGED, writing need not be a formal contract, a memorandum suffices
1. Interest in land (leashold interests for 1 year or less NO) unless 2 of the following - full payment - possession - and or valuable improvement 2. Service not capable of being performed within 1 year from time of K (unlimted resources) 3. Gurantantor 4. prenuptual agreement 5. Sale of good > $500 except - specially manufactured goods - written confirmation of an oral agrt between merchants and failure to respond within 10 days - parital payment - delivery actually made/accepted 6. Redeem: Fla says a promise to pay a debt barred by the SOL must be in writing and signed by the party sought to be charged 6. health care contracts, newspaper subscriptions, home solicitation sales, home improvment contracts, credit agreements |
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Florida Contracts
Terms Construction |
Objective, intent of the parties controls
Factors: words of agreement, prior practices, custom, 3rd party performance FLA presumes that provision is a promise rather than a condition FLa considers parties subsequent acts/conduct |
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Florida Contracts
Terms Parol Evidence Rule |
Evidence of prior or contemporaneous negotiations that very contractual terms is inadmissible if the written K is intended as a complete/final express of the parties.
EXCEPT evidence of: 1. formation defects (frauds, duress, mistake, illegality, no consideration) 2. condition precedent 3. intent regarding ambiguity terms 4. collateral agreement if it does not contrat or vary the main contract 5. subsequent modifications |
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Florida Contracts
Terms Warranties |
Express
Implied Merchantability - Merchant dealing in goods of a kind warrants goods are fit for ordinary purposes Implied fit for a particular purpose - disclaim warranties eliminates implied warranties if: conspicuous language of disclaimer mentioning "merchantability" or "as is" / without faults" (limitations on remedies limits or sets recovery for any breach of warranty) |
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Florida Contracts
Performance |
Duty of performance becomes absolute when conditions are either performed or excused
Intent of the parties determines, Fla. presumes taht provision is a promise rather than condition |
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Florida Contracts
Performance Promise |
is commitment to do or refrain from doing something
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Florida Contracts
Performance Condition |
is an event that occurence or nonoccurence with will create, limit, or extingush the absolulte duty to perform
PRecedent - occurs before an absoulte duty of performance arrises, - COncurrent - Subsequent |
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Florida Contracts
Performance Excused conditions Actual material breach |
by one party excuses the other's duty of counterperformance, minor breach suspends duty
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Florida Contracts
Performance Excused conditions Anticipatory Repudiation |
that is unequivocal applies if executory duties on both sides, provides nonrepudiating party with 4 alternatives
1. treat K as totally repudiated and sue immediately 2. suspends his only performance and wait until performance is due to sue 3. ignore and urge performance 4. treat repudiation as an offer to rescind + discharge K. (distinguish from inability/unwillingness to perform.) |
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Florida Contracts
Performance Excused conditions Substantial performance |
applies to constructive conditions
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Florida Contracts
Performance Excused conditions Divisible Contract |
Contract where 1 party performes unit of K she is entitled to agreed equivalent for unit
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Florida Contracts
Performance Excused conditions Waiver or Estoppel |
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What are the legal reasons for why an agreement may not be legally enforceable?
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A contract is more than an agreement. Some agreements are not legally enforceable. Legal reasons for not enforcing an agreement include:
1. Lack of consideration (or a consideration substitute for the promise at issue) 2. Lack of capacity of the person who made that promise 3. Statute of Frauds 4. Existing laws that prohibit performance of the agreement 5. Public policy 6. Misrepresentations 7. Nondisclosure 8. Duress 9. Unconscionability 10. Ambiguity in words of agreement; and 11. Mistakes at the time of the agreement as to the material facts affecting the agreement. |
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Florida Contracts
Performance Duty of Performance discharged |
Once it is established that there is an immediate duty to perform, that duty must be discharged by:
1. performance or tender of performacne 2. Rescission - possible when duties are executory on both sides 3. Modification, Novation, Substitued Contract, Accord + Satisfaction 4. Impossibility, Impracticability, Frustration - Impossibility - objective, arrises after the K is formed, party who rendered part performance may recover in quasi-contract |
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Florida Contracts
Performance Duty of Performance discharged Impossibility |
Objective, arrises after the K formed, party who rendered part performance may recover in quasi-contract
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Florida Contracts
Performance Duty of Performance discharged Impracticability |
Fla requires that circumstances causing breach have made performance vitally different from what anticipated, so that the contract cannot reasonably though to govern
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Florida Contracts
Performance Duty of Performance discharged Frustration of purpose |
A supervening event that was not reasonably foreseeable at the time of the K which completely destroys the purpose of the K as understood by both parties
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Florida Contracts
Breach |
Promisor is under absolute duty has not been discharged then his failure to perform in accordance with the contractual may be held to be a breach
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Florida Contracts
Breach Material |
nonbreaching party does not receive a substantial benefit of her bargain + may treat the K as at an end (duty to counterperformce is discharged) and has an immediate right to all remedies for breach of entire contract..
NOTE - failure to perform by the time stated is NOT material if performance is rendered w/in a reasonable time unless K expressly provies time is of the essense Material breach - amount of benefit received - adequacy of damages - extend of part performance - hardship - willful behavior |
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Florida Contracts
Breach Perfect Tender |
IF S sends non-conforming goods then treated as acceptance and breach unless S provides accomodation which is treated as counteroffer and no breach
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Florida Contracts
Damages Compensatory |
goal is to put the non breaching party into as good a position as full perormance measured as
Standard (benefit of the bargain) Consequential (forseeable) STANDARD - expectation damges that would permit Plaintiff to buy substitute, if speculative then reliance meaures of cost incurred by performance |
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Florida Contracts
Damages Compensatory Sale of Good |
Difference between KP and MP (at time when seller tenders goods or when buyer learns of breach)
S may withold delivery, resell and recover the differnce or recovery ordinary K damages for Non acceptance, or recover KP if B accepts 1. S breaches B keeps good (FMV if perfect tender - FMV as delivered) 2. S breaches, S keeps good (MP at time of breach discovery - KP) or (replacement cost - KP) 3. B breaches, B keeps good (KP) 4. B breaches, S keeps goods (KP - MP at time/place of delivery) or (KP - resale price) and possibly lost profit if lost volume ("regular inventory" "off the rack") |
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Florida Contracts
Damages Consequential |
Awarded in addition to the standard measure if a reasonable person would hae foreseen at the time entering the K that such damages would result from the breach
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Florida Contracts
Damages Liquidated |
disfavored valid if:
1. damages were difficult to ascertain at the time the K was formed 2. amt agreed upon was a reasonable forecast of compensatory damgeas (Consider actual damages) |
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Florida Contracts
Damages Specific Performance |
where the legal remedy is inadequate, nonbreaching party can seek specific performance
Equitable Defenses are 1. laches 2. unclean hands 3. sale to BFP |
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Florida Contracts
Damages Restitution |
quasi-implied in law to prevent unjust enrichment, measured by value of benefit conferred to D, P's loss
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Florida Contracts
3rd party beneficiaries |
Intended (not incidental) have contractual rights
TWO types Creditor or DOnee prior to vesting, promisee/promisor free to modify/rescind 3P's rights but 3P may enforce K only when rights have vested 1. manifests assent to a promise in the manner required 2. materially changes position in justifiable reliance on promise |
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Florida Contracts
Assignment |
generally all contractual rights may be assigned unless substnatially change obligor's duty of risk, no writing required, consideration not required, assignment for consideration, assignment without consideration is recovable unless detrimental reliance
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Florida Contracts
Assignment A nonassignment Provision |
Prohibits assignment of "the contract" bars only delagation of assignors duties
Prohibits assignment of "contractual rights" - generally does not bar assignment but merely gives obiligro the right to sue for damages Assignments "will be void" - bars assignment |
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Florida Contracts
Delegation |
generally all duties may be delegated unless, personal judgment or skill, change obligee's expectancy, contractual restrictions on delegation
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Florida contracts
Torts |
1. tortious intereference with con in florida is called INTERFERENCE WITH BUSINESS RELATIONSHIP
- 3P knew of contracual relationship and caused breach |
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