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30 Cards in this Set

  • Front
  • Back
DEFINE

contract
Enforceable promise

Promise is a manifestation of a commitment
Types/classifications of contracts
Express, implied, constructive

Bilateral (promise for promise)
Unilateral (promise for performance)
Elements of contract
Mutual assent (offer, acceptance)

Consideration

No defenses
Standard used re:mutual assent
Reasonable person standard
DEFINE

offer
Communicated willingness to bargain seeking another's mere assent
Terminating an offer
By offeror: revocation by act effective when received at any time prior to acceptance except if option K, firm offer, performance begun

By offeree: rejection or counteroffer

Also terminate by operation of law if death of party, insanity, destruction of subject matter, illegality
DEFINE

acceptance
Requires offeree's manifestation of agreement in manner invited and at the time required

Must be communicated unless K says silence is good or custom makes silence OK
Mirror image rule
Acceptance must be unequivocal, or it's a rejection/counter
Mailbox rule
acceptance generally effective on dispatch

Applies to non-instantaneous communications

Exceptions: rejection also sent, option K, unauthorized means used
DEFINE

consideration
Bargained-for exchange of legal value

No consideration if gift, past consideration, illusory promise, watch/satisfaction clause, output K, exclusive agency K
Modification consideration
Must have separate consideration for modification to be binding
Preexisting duty rule
Cannot have new consideration if party attempts to bargain for something he/she already obliged to do

Exceptions: new/different consideration, honest dispute re:duty, unforeseen circumstances
Substitutes for consideration
Promissory estoppel/detrimental reliance

UCC modification

Promises to pay barred by law

Restitution claims
LIST

defenses
Absence of mutual assent

Misrepresentation

Fraud

Duress

Unconscionability

Latent ambiguity/misunderstanding

Capacity: infancy, insanity, intoxication
DEFINE

defense of absence of mutual assent
Mistake = factual error regarding a fundamental matter, which has material effect on agreed exchange

Adversely affected party may rescind contract, provided she did not bear risk of mistake
DEFINE

defense of misrepresentation
Innocent or negligent untrue assertion of fact or omission

Renders contract voidable if material and if induced detrimental reliance
DEFINE

defense of fraud
Deliberate, intentional omission

Renders contract voidable, if party is deceived to her detriment
DEFINE

defense of duress
Physical; economic

Economic: improper threat which leaves no reasonable alternative but to agree

Renders contract voidable by adversely affected party
DEFINE

defense of unconscionability
Renders contract voidable

Procedural = absence of choice in the bargaining process

Substantive = unreasonably harsh terms
DEFINE

defense of latent ambiguity/misunderstanding
If both parties knew/had reason to know of ambiguity, then no K

If neither party knew/had reason to know, then no K

If one party knew/had reason to know, then there is a contract, but on the innocent party’s terms
DEFINE

defense of capacity / infancy
Contracts by minors are voidable by minor, unless for necessities or minor ratified at age of majority
DEFINE

defense of capacity / insanity
Contract is voidable by one unable to understand nature/consequences of transaction
DEFINE

defense of capacity / intoxication
Voluntary - not a defense unless other party knows and takes gross advantage of it

Involuntary - contract voidable if unable to understand nature/consequences of transaction
SOF elements
MYLEGS

Marriage
Year
Land
Executor
Goods $500
Surety

Must be in writing
Rights/duties of third party
Parties other than the initial promisee/promisor may acquire rights and duties at formation (3rd party beneficiary) or post-formation of contract (assignment and delegation)

Assignment: transfer of contract right

Delegation: transfer of contract duty

Intended beneficiary or someone who has been assigned a contract right can sue breaching promisor directly for any nonperformance
When is performance due?
Performance is due when no conditions to performance, or all conditions have been satisfied or excused


No conditions to performance: timing (precedent - begins party’s performance/obligation, subsequent - cuts off performance/obligation); source (express, implied)

When unsatisfied conditions have been excused: failure to cooperate, substantial performance, waiver/estoppel, impossibility/impracticability/frustration
DEFINE

breach and types of
Any deviation from promised performance

Types: material = undermines substantial benefit of the bargain; minor = slight deviation from promise
LIST

remedies
Compensatory damage

Reliance damage

Punitive/non-punitive

Liquidated agreed damages

Specific performance

Restitution
DEFINE

compensatory damages
If the law finds breach, the court will attempt to compensate non-breacher for economic loss; standard measure for breach = expectation interest ($ to put party in position if K performed)

Limitations: certainty, foreseeability, avoidability (duty to mitigate)
DEFINE

specific performance
available if 1) legal remedy is inadequate; 2) administration of remedy is not unduly burdensome to the court; 3) contract terms are certain and definite

3 categories of cases: real estate, unique goods and no cover available, personal services