Basics
What are the three sources for contract law?
Common law, Restatements (not binding), Uniform Commercial Code
What are the three elements of an effective offer?
1) be communicated to the offeree
2) manifest an (objective) intent to enter a contract
3) be sufficiently definite and complete
What is the "duty to read"?
The offeree has assented to the terms of what is offered even if the offeree has not read or otherwise reviewed the terms in the offer.
What are the two elements of consideration?
1) Legal Sufficiency
2) Bargained-for exchange
What does it mean to disaffirm?
To exercise power of avoidance; releases party with limited contractual capacity from any liability in the contract.
What are the elements of a contract? Define each.
1) Mutual assent: meeting of the minds, parties must manifest by word or conduct an agreement to enter into a contract, usually through offer and acceptance
2) Consideration: each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to the other party
3) Legality of Object: purpose of contract must not be criminal, tortious, or against public policy
4) Capacity: parties must have a contractual capacity; adjudicated incompetents have no legal capacity to contract; minors, incompetent persons, and intoxicated persons have limited capacity
4.5) Absence of invalidating conduct: duress, undue influence, misrepresentation or mistake
What is an option contract?
This is required for an online platform to enforce an agreement made?
Reasonable conspicuous notice
What is the term used to reference a promise given for an act already done?
Past Consideration
What are the three ways a minor can ratify?
1) through express language
2) imply through conduct
3) through failure to make a timely disaffirmance
A contract that is partially or entirely unperformed by one or more of the parties
What are the 7 ways an offer can lapse?
1) Expiration
2) Revocation
3) Rejection
4) Counteroffer
5) Death
6) Destruction
7) Illegality
Revocation can be manifested indirectly if...?
1) The offeror takes action that shows that offeror no longer intends to commit to offered bargain; AND
2) offeree learns of that action
What is it called when parties mutually agree to void an agreement between them?
Recission
What is fraud in the execution?
consists of misrepresentation that deceived the defrauded person as to the very nature of the contract; occurs when person does not know, or does not have reasonable opportunity to know, the character or essence (essential terms) of proposed contract
How are bilateral and unilateral contracts accepted?
Bilateral contracts are accepted through a communication to the offeror
Unilateral contracts are accepted through conduct; notice of acceptance is usually not required UNLESS offeror would not otherwise find out
Besides communication, what makes an acceptance effective?
The acceptance must be definite and unequivocal
What is the mailbox rule?
The mailbox rule states that an acceptance, if properly addressed and sent in a reasonable manner invited by the offer, is effective when it is put out of the offeree's possession (even if acceptance never arrives)
What are the elements of promissory estoppel?
1) Promisor made a clear and definite promise
2) Promisor should have foreseen that promisee would act in reliance on the promise
3) Promisee did act in reasonable reliance
4) Unfair or unjust not to enforce the promise
What are the two types of non-fraudulent misrepresentation? Define them.
Negligent misrepresentation = false representation that is made without knowledge of its falsity and without due care in ascertaining its truthfulness
Innocent misrepresentation = false representation made without knowledge of its falsity but with due care
What is a firm offer?
An offer by a merchant that binds them to keep an offer to buy/sell goods open for a stated period or reasonable time, not exceeding 3 months.
What are the three situations in which silence (silent assent) operates as an acceptance?
1) Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation
2)Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent or inactive intends to accept
3) Where because of previous dealings or otherwise, it's reasonable that the offeree should notify the offeror if he does not intend to accept
What are the majority and minority approaches to addressing different terms in a contract between merchants?
Majority approach: "knock-out rule" = different terms cancel each other out, matching terms are kept
Minority approach: "first-shot rule" = offeror prevails and different terms in the acceptance are dropped
What are the three types of remedies available for quasi contract breaches? Define each.
1) Expectation Damages: amount necessary to fulfill the expectation created by promise
2) Reliance Damages: amount necessary to compensate promisee for expenses or costs incurred in reliance on existence of promise
3) Restitution Damages: if benefits have been conferred on a party, a court may require that party to "disgorge" the benefit by paying the other party the value of those benefits
1) False representation
2) of a fact
3) that is material
4) made with knowledge of its falsity and the intention to deceive
5) which representation is justifiably relied on