Chapter 10 Contract Law

Front 1

Contract

Back 1

A legally enforceable promise or set of promises.

Front 2

Freedom of Contract

Back 2

1. Importance show by our nation's founders
a. Contracts clause of the U.S. Constitution: "States shall pass no laws impairing the legal obligation of contracts"
b. Declaration of Independence: "life, liberty, and property"
2. Limitations of freedom without freedom to contract

Front 3

Mutual manifestation of assent

Back 3

1. Consists of offer and acceptance
2. Viewed objectively

Front 4

Quid Pro Quo

Back 4

this for that

Front 5

Capacity

Back 5

Rule of law: minors, mentally incompetent persons and highly intoxicated persons may not enter a valid contract

Front 6

Legality

Back 6

A contract involving illegality is void. Those who make a deal involving a crime should not expect a court to enforce the contract

Front 7

Lack of reality of consent

Back 7

Where assent to a contract is not real or voluntary, the contract is voidable (fraud and duress)

Front 8

Noncompliance with formalities

Back 8

Some contracts must be formalized by a writing or a witnessed writing to be enforceable (contracts for sale of land must be in writing)

Front 9

Unilateral

Back 9

A promise in exchange for a completed act
-Offer contemplates acceptance by performance
-Duty of offeror arises upon complete performance
-Offeree has no duty
-Return a lost dog for money/reward

Front 10

Bilateral contracts

Back 10

A promise in exchange for a promise
-Offer contemplates a promise as acceptance
-Duties of offeror and offeree arise on verbal acceptance

Front 11

Express

Back 11

created by the specific words of the parties

Front 12

Implied

Back 12

created by the conduct parties (haircut-it is implied that you pay even though you don'r discuss it before)

Front 13

Implied in law

Back 13

Quasi contract
created by a court when one party unjustly enriches another party (emergency room when you are unconscious)

Front 14

Valid contract

Back 14

enforceable by all parties

Front 15

Void Contract

Back 15

enforceable by none of the parties
Illegal contracts

Front 16

Voidable contracts

Back 16

may be avoided by one or more parties
Contracts procured through fraud

Front 17

Unenforceable contract

Back 17

the four requirements for a valid contract are met, but the contract is not binding because of a statute
Statute of Frauds or Limitations

Front 18

Executed contract

Back 18

all performance is complete

Front 19

Executory contract

Back 19

part of the performance is lacking

Front 20

Objective nature

Back 20

1. A judge looks at the words and actions of the parties rather than what they were thinking
Lucy vs. Zehmer

Front 21

Plain meaning rule

Back 21

If the words of the contract are clear in their meaning, the courts will enforce the contract as written--> generally no extrinsic evidence allowed
ex: covenant not to compete signed unknowingly

Front 22

Entire Writing Rule

Back 22

the court will do its best to enforce the entire contract when there is a potential conflict of terms

Front 23

Meaning of words

Back 23

Ordinary words: dictionary definition
Legal terms: legal definition
Technical terms: technical meaning in the relevant trade or profession

Front 24

Conflict of terms

Back 24

review the entire contract and apply the most consistent with the intent of the parties

Front 25

Ambiguous terms

Back 25

Interpret against the drafting party.
Priorities of terms when resolving conflict or ambiguity: hand written, type written, then pre-printed.
An ambiguity makes extrinsic evidence admissible.

Front 26

Surrounding circumstances

Back 26

Course of performance: the way the parties performed the contract being interpreted
Course of dealing: the way the parties performed previous, similar contracts
Usage of trade: the way the issue is question is customarily dealt with in the type of business involved.