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30 Cards in this Set
- Front
- Back
DEFINE
contract |
Enforceable promise
Promise is a manifestation of a commitment |
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Types/classifications of contracts
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Express, implied, constructive
Bilateral (promise for promise) Unilateral (promise for performance) |
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Elements of contract
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Mutual assent (offer, acceptance)
Consideration No defenses |
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Standard used re:mutual assent
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Reasonable person standard
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DEFINE
offer |
Communicated willingness to bargain seeking another's mere assent
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Terminating an offer
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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 |
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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 |
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Mirror image rule
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Acceptance must be unequivocal, or it's a rejection/counter
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Mailbox rule
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acceptance generally effective on dispatch
Applies to non-instantaneous communications Exceptions: rejection also sent, option K, unauthorized means used |
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DEFINE
consideration |
Bargained-for exchange of legal value
No consideration if gift, past consideration, illusory promise, watch/satisfaction clause, output K, exclusive agency K |
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Modification consideration
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Must have separate consideration for modification to be binding
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Preexisting duty rule
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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 |
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Substitutes for consideration
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Promissory estoppel/detrimental reliance
UCC modification Promises to pay barred by law Restitution claims |
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LIST
defenses |
Absence of mutual assent
Misrepresentation Fraud Duress Unconscionability Latent ambiguity/misunderstanding Capacity: infancy, insanity, intoxication |
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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 |
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DEFINE
defense of misrepresentation |
Innocent or negligent untrue assertion of fact or omission
Renders contract voidable if material and if induced detrimental reliance |
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DEFINE
defense of fraud |
Deliberate, intentional omission
Renders contract voidable, if party is deceived to her detriment |
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DEFINE
defense of duress |
Physical; economic
Economic: improper threat which leaves no reasonable alternative but to agree Renders contract voidable by adversely affected party |
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DEFINE
defense of unconscionability |
Renders contract voidable
Procedural = absence of choice in the bargaining process Substantive = unreasonably harsh terms |
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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 |
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DEFINE
defense of capacity / infancy |
Contracts by minors are voidable by minor, unless for necessities or minor ratified at age of majority
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DEFINE
defense of capacity / insanity |
Contract is voidable by one unable to understand nature/consequences of transaction
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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 |
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SOF elements
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MYLEGS
Marriage Year Land Executor Goods $500 Surety Must be in writing |
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Rights/duties of third party
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Parties other than the initial promisee/promisor may acquire rights and duties at formation (3rd party beneficiary) or post-formation of contract (assignment and delegation)
Assignment: transfer of contract right Delegation: transfer of contract duty Intended beneficiary or someone who has been assigned a contract right can sue breaching promisor directly for any nonperformance |
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When is performance due?
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Performance is due when no conditions to performance, or all conditions have been satisfied or excused
No conditions to performance: timing (precedent - begins party’s performance/obligation, subsequent - cuts off performance/obligation); source (express, implied) When unsatisfied conditions have been excused: failure to cooperate, substantial performance, waiver/estoppel, impossibility/impracticability/frustration |
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DEFINE
breach and types of |
Any deviation from promised performance
Types: material = undermines substantial benefit of the bargain; minor = slight deviation from promise |
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LIST
remedies |
Compensatory damage
Reliance damage Punitive/non-punitive Liquidated agreed damages Specific performance Restitution |
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DEFINE
compensatory damages |
If the law finds breach, the court will attempt to compensate non-breacher for economic loss; standard measure for breach = expectation interest ($ to put party in position if K performed)
Limitations: certainty, foreseeability, avoidability (duty to mitigate) |
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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 |