Contract Formation
What is mutual assent and what are the elements of a contract, required for mutual assent?
meeting of the minds
offer, acceptance, consideration
What is a firm offer?
Under UCC article 2, an offeror may be held to their offer when...
1. offeror is a merchant
2. who gives a signed writing
3. that writing includes assurances that the offer will be held open for a specified period of time
4. generally unenforceable after 90 days
Principles of Interpretation:
List the Rule for "construed as a whole"
contracts should be understood in their entirety, specific clauses should be subordinated to the general intent of the parties; looking for the "spirit of the contract"
Name the general requirements under the SOF
(1) writing (2) signed (3) by the party to be charged
what are the elements of duress?
1. there is a wrongful or improper act against a party
2. there is no reasonable alternative for that party but to acquiesce to the threat
What is consideration? What does not satisfy requirement of consideration?
the "bargained for exchange"; must have value, either that it is a detriment to the promisor or a benefit to the promisee; past or moral consideration will not suffice
What is an option contract?
the offerree gives consideration so that the offeror will leave an offer open for a period of time (i.e. not revoke); if there is a reasonable expectation of reliance on the option contract, it will be held irrevocable for a reasonable amount of time
Principles of Interpretation:
State the rule for Plain Meaning
words should be understood in their plain meaning, unless there is evidence that they are to be understood in some other way
Name the categories of contracts that are required to be in writing under the SOF?
Marriage
Year Long
Land
Executor
Goods over $500
Surety/Guaranty
What must be present for a finding of unconscionability?
procedural: based on unfair surprise or unequal bargaining power in drafting the contract
substantive: unfair terms within the contract itself
if a party promises to do or not do something that they are already legally obligated or forbidden to do, this will not satisfy the requirement of consideration as they have not incurred a benefit
exceptions: new consideration; honest disagreement about value
What are the elements of promissory estoppel?
(1) a promise which the promisor should reasonably expect to induce reliance on the part of the promisee, and which (2) does induce reliance, and is binding if (3) injustice can only be avoided by enforcement of the contract
Contextual Rules:
State the rule for Terms of Trade
if a term is understood in a certain way in the context of a certain trade, what may be relevant to it's interpretation; i.e., industry standard
Name the exceptions under each category (where applicable) of the SOF
Year-Long: full performance by either party
Land: full performance by seller, part performance by buyer
Goods over $500: specially made goods, acceptance of delivery
Surety: where the agreement is primarily for the promisor's own gain
What is Undue Influence?
when there is unfair pressure exerted by one dominant party over another in order to force or induce a certain outcome
contracts made under undue influence are voidable by the victim
What is a unilateral contract?
a contract that is not negotiated and where performance is acceptance; at the point of substantial performance, the offer can no longer be revoked; unilateral contracts "invite performance"
alternative theories to formation, where no formal contract has been made, and there is no consideration given, but enforcement may still be legal
Contextual Rules:
State the rule for Course of Dealing
prior practice / history of interaction between the parties may be relevant to a term's understanding
What is the general parol evidence rule?
when the parties to a contract set forth their final agreement in writing, neither party may introduce evidence that varies the terms of the final agreement, absent a recognized exception
What are the elements of misrepresentation/fraud?
1. false statement
2. induces reliance
3. reliance is justifiable under the circumstances
What is the mailbox rule?
a contract is formed from the moment acceptance is dispatched, unless...
1. offer states otherwise
2. rejection is sent and then acceptance is sent ; then, whichever is received first is binding
3. acceptance is sent and then rejection is sent ; then, acceptance is binding, unless rejection is received first and relied upon
1. through rendering service or expending property, P has conferred a benefit on D
2. P had a reasonable expectation of compensation for the benefit, and D knew or should have known of this expectation
3. D would be unjustly enriched in the absence of restitution to P
Contextual Rules:
State the rule for Course of Performance
if a contract involves repeated occasions for performance and it is not objected to by either party, that performance will be deemed acceptable under the terms of the contract
Name the exceptions to parol evidence
explanatory, validity, subsequent agreements, condition precedent, equitable remedies, collateral agreements
What are the elements of frustration of purpose?
1. the event was not reasonably foreseeable
2. the purpose of the contract has been effectively destroyed by the occurrence of the event
3. the purpose was frustrated/destroyed was understood by both parties at the time of the making of the contract