Contract Elements
What are 2 essential elements of a valid contract?
Offer, Acceptance, Consideration, Genuine Agreement, Capacity, or Legality
This type of contract is legally binding and meets all essential elements.
Valid Contract
You promise your friend, Alex, $200 if they help you move into your new apartment. After helping you move, Alex asks for the $200, but you refuse, claiming you never meant to make a formal agreement. Alex insists you agreed to pay them.
Who should win you or Alex?
Alex should win because a verbal agreement can form a contract if there is consideration (helping to move). Even if informal, the promise is enforceable.
Which legal principle involves the unfair manipulation of one party’s lack of bargaining power in a contract?
Unconscionability
Who should win the case where a teenager lies about their age to get a contract, but wants to return the product after two weeks?
The teenager (Voidable contract due to being a minor, even though there was a misrepresentation of age).
This occurs when one party is forced or threatened into signing a contract.
Duress
A contract made by a minor is often considered what type of contract?
Voidable Contract
You see an ad offering a $500 reward for finding a lost dog. After finding and returning the dog, the person who placed the ad refuses to pay the reward, claiming they didn’t expect someone to actually find the dog.
What type of contract was this?
Unilateral
What is it called when a contract is formed based on a promise to do something that the person is already legally obligated to do?
Pre-existing Duty
Who should win when a parent promises their adult child money on their 18th birthday but later tries to back out?
The parent (No enforceable contract, as it was a gift and there was no legal consideration).
What term refers to something of value exchanged between the parties of a contract?
Consideration
You offer a neighbor $300 to mow your lawn every week during the summer. In exchange, the neighbor agrees to mow your lawn once every week for the duration of the summer. What type of contract is this?
Bilateral Contract (Both parties make promises: you promise to pay $300, and the neighbor promises to mow the lawn every week).
You book a trip through a travel agency that promises a 100% refund if canceled within 14 days of departure. A week before the trip, you cancel due to a family emergency, but the agency refuses the refund, claiming you're not eligible.
Who should win?
You should win because the travel agency is bound by the contract terms specifying a 100% refund within 14 days. Since you canceled in time, they must honor the agreement.
What is it called when one party makes a false statement about a fact in a contract?
Misrepresentation or Fraud
Who should win in the case where a customer paid for four skiing lessons but only needed one, claiming the contract was unconscionable?
The customer (The contract could be considered unconscionable due to being overly expensive for what was actually needed).
What element of a contract involves having the legal ability to enter a contract?
Capacity
In the scenario where a neighborhood watch group offers a $1000 reward for catching a thief, but the sheriff claims it, what type of contract is this?
Unilateral Contract (because the offeror promises to pay for the performance of the act—capturing the thief)
You hire a contractor to remodel your kitchen for $5,000, with the work to be completed in three months. Two months later, the contractor hasn’t started and demands full payment before continuing.
What type of contract is this?
This is a bilateral contract because both parties made mutual promises (you promised $5,000 for the work, and the contractor promised to complete the job).
Jamie agrees to design a website for Morgan's business. They shake hands and write on a napkin: "Jamie will create a website, and Morgan will pay what she thinks is fair." Later, Jamie completes the website, but Morgan refuses to pay anything, claiming the agreement was unclear.
Why can't this contract be enforced?
The contract cannot be enforced because the terms are too vague. A valid contract must have definite and specific terms, including the scope of work and payment amount. The phrase "what she thinks is fair" is subjective and lacks clarity, making it impossible to enforce the agreement.
Who should win when a sheriff captures a thief and claims a reward from a neighborhood group, but the group refuses to pay?
The sheriff (The reward offer was valid and could be accepted by anyone who captured the thief, including the sheriff).
What rule states what contracts must be in writing in order to be enforced?
Statute of Frauds
In the scenario with the artist and the hired person to follow the boyfriend, what makes the contract voidable or unenforceable?
Unenforceable/Illegal Contract (since the terms were illegal, i.e., hiring someone to follow and potentially cause harm)
You are a college student who has been struggling to pay rent. One day, a man approaches you and offers to lend you $2,000 to cover your expenses for the semester, but at an interest rate of 75% per month, to be paid back in six months. Desperate for money, you sign the loan agreement without fully understanding the terms. After six months, you owe him over $10,000 and realize you can't pay it back.
Under what grounds could you void this contract (i.e. what type of contract is this)?
This contract could be voided on the grounds of unconscionability. The terms of the loan are grossly unfair and shock the conscience because of the excessive interest rate of 75% per month, which is exploitative and predatory. This extreme imbalance in the contract makes it unenforceable in court, as it takes advantage of the student's financial vulnerability. The court could determine that the contract is unconscionable and refuse to enforce it.
In the case (we studied earlier) where the father promised to pay $1000 to his daughter when she turns 18 and decides he doesn't want to pay it.
Why would the father likely win this case?
The contract is unenforceable because there was no consideration in exchange for the $1,000 gift. The father’s promise to give his daughter money was a gratuitous promise—a promise made without receiving anything in return. Without consideration, there is no valid contract.
Who should win when a hired person completed a task to follow a suspected cheater, but the artist refuses to pay for the completed work?
Neither side should win (The contract is likely illegal since it involves assault, and illegal contracts are unenforceable in court. The artist should not have to pay because the task was illegal, but the hired person cannot claim payment either due to the illegal nature of the contract).