Contact Basics

Question 1

K Requirements - Definition

Answer 1

A K is a promise or set of promises enforced by law (i.e. a legally enforceable agreement)

Question 2

K Requirements - Formula

Answer 2

K = MA (O + A) + C - D

Question 3

K Requirements - Mutual Assent

Answer 3

Meeting of the Minds

Demonstrated by an offer and valid acceptance

Determined by parties’ objective manifestation of assent

Question 4

K Requirements - Consideration

Answer 4

A bargained-for exchange of legal value between the parties

Question 5

K Requirements - No Defenses to K Formation

Answer 5

No defenses to formation exist that would invalidate the K

Question 6

K Requirements - Void (Definition)

Answer 6

K never had any legal effect

Question 7

K Requirements - Voidable (Definition)

Answer 7

One or both parties may elect to void the K

Question 8

K Requirements - Unenforceable (Definition)

Answer 8

Otherwise, valid K that is unenforceable b/c a defense applies (i.e. incapacity, Statute of Frauds)

Question 9

Types of Ks - Bilateral K (Definition)

Answer 9

Exchange of mutual promises

Each party is a promisor and promisee

E.g. A offers to sell his car to B for $5,000 and B promises to purchase A’s car at that price

Question 10

Types of Ks - Unilateral K (Definition)

Answer 10

Offer requires performance as the manner of acceptance

Offeror-promisor agrees to pay upon completion of the act requested by the promise; once act is completed, K is formed

E.g. A promises to pay B $100 if B paints A’s fence; B is not obligated to paint A’s fence, but if B does, K is formed and A must pay B $100

Question 11

Types of Ks - Quasi-Contract (Definition)

Answer 11

Not a K, but rather a restitution remedy designed to prevent unjust enrichment; an implied-in-fact K arises when there is an unenforceable or non-existent agreement, but one side has realized a benefit

Question 12

Types of Ks - Quasi-K (What to Look For)

Answer 12

1) P has conferred a benefit to D

2) P reasonably expects to be paid

3) D knowingly accepted the benefit; and

4) D will be unjustly enriched if P is not compensated

Question 13

Applicable Law - 2 Governing Bodies

Answer 13

UCC or Common Law

Question 14

Applicable Law - Common Law

Answer 14

Applies to most Ks, except sales of goods

Any K not involving the sale of goods should be treated under common law contract principles

Generally applies to Ks for real estate or services

Question 15

Applicable Law - UCC Article 2

Answer 15

Governs the Sale of Goods

If both parties to a K are merchants, the UCC has additional special rules

Question 16

Applicable Law - Mixed Ks

Answer 16

For Ks involving both goods and services, the predominant purpose of the K dictates the applicable law

Question 17

Applicable Law - Mixed Ks (Exception)

Answer 17

If K terms divide payment between the goods and the services, apply the UCC to the sale of goods portion of the K and common law to the remainder