Contracts BS part 1
Duty to mitigate
the injured party may not recover damages for loss that he could have avoided with reasonable effort and without undue risk, burden, or humiliation
Subjective impossibility
Think ONLY YOU cannot perform as a result.
What is a mutual mistake?
when both parties are mistaken as to the same set of facts
A valid consideration is…
Legally sufficient and bargained-for-exchange
An effective offer must be…
[1] be communicated to the offeree
[2] manifest an intent to be bound, and
[3] be sufficiently definite and complete
Phrases that would indicate a conditional duty
“provided that, “on condition that”, “if”, “subject to”
What is Parol Evidence?
Essentially things outside the formal written contract
3 ways to ratify a contract
Definition of consideration
each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to the other party to make a return exchange
A valid acceptance under UCC is…
A valid acceptance under common law is…
definite and seasonable
positive and unequivocal
What is a condition precedent?
an event that must occur before performance is due under a contract
Possibility test:
Court asks whether it is possible for the performance of the contract to be completed within a year.
When can an intoxicated person ratify a contract?
When they regain capacity or they ratify when they fail to disaffirm in a promptly manner
What is an illusory promise?
A promise where there is no consideration
What is a counteroffer under common law?
a counterproposal from the offeree to the offeror that indicates a willingness to contract but on terms or conditions different from those contained in the original offer. It generally operates as a rejection. It also operates as a new offer.
Express v. Implied Conditions:
Express conditions are specified in the contract making clear that one party is protected from the need to perform if the conditions does not occur
Implied conditions go unsaid, however. This is often the case when promises are made by both parties and those promises are (implicitly) connected by a condition
Expectation damages formula
Direct damages = loss of value - cost avoided + incidental damages + consequential damages
Loss of value = promised performance - actual performance
What is procedural unconscionability?
refers to the conditions of the contract formation and focuses on 2 factors: Oppression and Surprise
Elements of promissory estoppel
(1) promisor made a clear and definite promise
(2) promisor should have foreseen that the promisee
would act in reliance on the promise;
(3) promisee did act in reasonable reliance;
(4) Unfair/unjust not to enforce the promise.
Under UCC § 2-207(2), if both parties are merchants, additional terms become part of the contract unless:
[1] the offer says explicitly that acceptance is limited only to terms of the offer and no other terms
[2] the additional terms would materially alter the contract otherwise proposed in the offer;
[3] the offeror has already notified the offeree of her objection to the additional term or does so within a reasonable time after receiving the acceptance.
The perfect tender rule
The Perfect Tender Rule declares that if the goods or tender fail “in any respect” to conform to the contract, the buyer may “reject” the goods.
Under cannons of construction, what is ”The Whole Act Rule”?
A writing is interpreted as a whole, and all writings that are part of the same transaction are interpreted together
5 requisites for fraud in the inducement
1) the undisclosed fact is known
2) of a fact
3) is material and relevant to the contract
4) made with knowledge of its falsity and intention to decieve
5) misrepresentation is justifiably relied on
Officious intermeddler doctrine
A legal principle that prevents someone from demanding compensation for services or goods they provided without being asked to do so
Option contract under UCC and common law
Under UCC an offer can be held open by putting it in writing
Under common law an offer can be held open only if there is consideration
ex: putting money down