Crucial Definitions
Define mutual assent.
Meeting of the minds; manifesting by words or conduct of an agreement to enter a contract
MUST HAVE: offer and acceptance
What are the two elements of an effective acceptance?
1) Definite
2) Unequivocal
What are the elements of consideration?
1) Legal sufficiency
2) Bargained-for-Exchange
When can a minor disaffirm a contract?
What is the difference between a unilateral and mutual mistake?
A unilateral mistake one has one person mistaken
Define consideration.
Often includes money; each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as inducement to the other party to make a return exchange.
MUST HAVE: exchange, benefit, detriment
What is the mailbox rule?
An acceptance, if properly addressed and sent in a reasonable time, is effective when it is "put out of the offeree's possession." Acceptance arrives first = acceptance, rejection first then acceptance = counteroffer
What is a gratuitous promise?
Gifts; those made without consideration; generally not legally enforceable
What does ab initio mean?
From the beginning
Define the 'palpable unilateral mistake' doctrine.
Define legality of object.
The purpose of a contract must not be criminal, tortious, or otherwise against public policy.
MUST HAVE: criminal, tortious, or otherwise against public policy.
An effective offer must have which three elements?
1) Be communicated to the offeree
2) Manifest an intent to enter a contract
3) Be sufficiently definite and complete
What are the four methods of discharge?
1) Performance by the parties
2) Material breach by one of both of the parties
3) Agreement of both of the parties
4) Operation of law
Under the traditional cognitive ability test, when is a person considered mentally incompetent?
Unable to comprehend:
1) The subject of the contract
2) The nature of the contract
3) The probable consequences of the contract
What question should you ask to figure out if a mistake is mutual or unilateral?
Who cares about the mistake?
Define capacity.
Parties must have contractual capacity. Certain persons like adjudicated incompetents have no contractual capacity. Others like minors, incompetent persons, or intoxicated persons have limited capacity to contract.
MUST HAVE: Adjudicated incompetents, minors, incompetents, and intoxicated
MUST INCLUDE
Definite
Seasonable
Dickered term
Common Law: must be supported by mutual consideration, new consideration - beyond which is already owed
UCC: Both intend to modify and act in good faith; no consideration required
What is the prevailing view for misrepresentation of age?
Minor may disaffirm the contract regardless
What is fraud in the execution?
Deceit affects the very nature of the contract; defrauded person doesn't know the nature or essence of the proposed contract
Define the four main types of invalidating conduct.
1) Duress
2) Undue Influence
3) Misrepresentation
4) Mistake
What are the 7 ways an offer can last (minus acceptance)?
1) Expiration
2) Revocation
3) Rejection
4) Counteroffer
5) Death
6) Destruction
7) Illegality
What are the four elements of promissory estoppel?
1) Promisor made a clear and definite promise
2) Promisor should have foreseen that the promisee would act in reliance
3) Promisee did act in reasonable reliance
4) Unfair or unjust not to enforce the promise
What is the 'modern' disaffirmance rule?
Minor makes full restitution; return an equivalent of what has been received to put the seller in the same position
What are the five requisites for fraud in the inducement?
1) A false representation
2) Of a fact
3) That is material and
4) Made with knowledge of its falsity and the intention to deceive and
5) Which representation is justifiably relied on