Contract formation Flashcards

Question

Acceptance by silence

Answer 1

Strong presumption against, unless a. offeree takes benefit of offered services, b. offeror gives reason to indicate that silence = assent, and offeree intends silence to = acceptance c. because of previous dealings, its reasonable that offeree should notify if he rejects.

Answer 2

Because of prior dealings, seller was justified in assuming that silence = acceptance

Answer 3

1. Each party promises to confer legal benefit or incur legal detriment 2. Promises are bargained for- inducement

Answer 4

Generally past acts do not count for consideration. Exception for moral consideration: when promise is made in recognition of past act conferred a material benefit received by the promisor, promise is enforceable to extent necessary to prevent injustice.

Answer 5

Past act of caring for son wasn't consideration to make father's promise to pay enforceable.

Answer 6

Employee saved employer's life by falling with block and permanently disfiguring his leg, moral consideration made employer's promise to pay him for life binding.

Answer 7

Generally, pre-existing duties don't count, unless a promise modifying an existing K duty is binding if: a. it's fair in light of unanticipated circumstances when first K was made, or b. to extent provided by statute c. to extent justice requires enforcement in view of material change in position in reliance on promise. UCC: no addt'l consideration necessary for modification to be binding if made in good faith.

Answer 8

Fisherman demanded a higher paycheck to do work they were contracted to do-no consideration.

Answer 9

Modification to K promised additional compensation for unforeseen work at time of contracting was binding.

Answer 10

Generally, value of consideration is irrelevant. a. ceremonial consideration generally invalid b. consideration whose value is contingent/uncertain: usually valid c. agreement to forbear from legal claim that turns out to be invalid: not consideration unless: - claim/defense if doubtful because of uncertainty as to facts/law, or - forbearer has good faith belief that claim may be valid.

Answer 11

While claim the employee agreed to forbear was invalid, forbearance constitutes consideration if employee believed it was valid in good faith

Answer 12

Don't count as consideration. ex: I will give you a car, but you can't paint it red.

Answer 13

Two lives: (1) as a substitute for consideration, perfecting the K. (2) as an alternate means of recovery based on reliance. same steps for both: 1. promise induces action/forbearance 2. would promisor reasonably expect such action/forbearance 3. can injustice only be avoided by enforcement of the promise?

Answer 14

Grandfather's promise to pay granddaughter so that she could quit her job was enforceable on PE (may not be a reasonable reliance today)

Answer 15

Mother induced son to move his family and give up homestead by promising a tract of land, son lived on and worked land for a year in reliance on promise. SP was enforceable because of PE

Answer 16

PE not applicable beacuse GC still had time to rescind bid after becoming aware of SC error

Answer 17

PE applied because GC's bid was accepted before becoming aware of SC error.

Answer 18

PE can create an option K where offeror should reasonably expect offer to induce substantial action/forbearance before acceptance as necessary to avoid injustice

Answer 19

No need for PE because consideration was met: college conferred benefit of posthumous remembrance.

Answer 20

Incapacity, misrepresentation, duress, unconscionability

Answer 21

Infancy, Mental illness/defect, intoxication.

Answer 22

Unless provided for by statute, infants can incur only voidable K duties, but infants are liable for necessaries.

Answer 23

Lease was voidable because infancy, apartment wasn't a necessary because teens could go home at anytime. Infant that reached age of majority voided the lease within a reasonable time of reaching majority (one week).

Answer 24

Infant Shields couldn't revoke consent for use of a photograph because her mother consented on her behalf.

Answer 25

A person incurs only voidable K duties by entering transaction by reason of mental illness/defect if: a. he is unable to understand in a reasonable manner the nature and consequences of transaction, or b. he is unable to act in reasonable manner in relation to transaction and other party has reason to know of his condition. If other party doesn't know of defect, power of avoidance terminates to extent that K has been performed in part/full OR circumstances have changed that make avoidance unjust.

Answer 26

Retirement K was voidable because teacher entered into it by reason of mental illness, she was unable to act reasonably in relation to transaction and retirement board knew of it.

Answer 27

A person incurs only voidable K duties if the other party has reason to know that by reason of intoxication, (1) he's unable to understand consequences of transaction in reasonable manner, or (2) he's unable to act in reasonable manner in relation to K. Higher bar than mental illness: other party must have reason to know.

Answer 28

Four elements: 1. Assertion not in accord with the facts, 2. Assent was induced by misrepresentation to his detriment, 3. Receiving party must en justified in relying on misrepresentation 4. Misrepresentation must be either material or fraudulent.

Answer 29

May be statement of fact or opinion, or sometimes silence. Silence: generally not an assertion, except when prior assertions are now inaccurate, other party is mistaken about effect of writing, T&C relationship, half truths, failure to correct amounting to bad faith (must be extreme)

Answer 30

Facts: generally justified to rely on. Opinions: generally not justified to rely on, except (1) RTC or professional opinion, (2) person reasonably believes person asserting opinion has special skill, judgement, or objectivity, or (3) for other reason, person is particularly susceptible to misrepresentation.

Answer 31

Material: likely to induce assent or maker knows it's likely to induce reliance - makes K voidable Fraudulent: Maker intends it to induce and (a) knows/believes assertion isn't true, (b) doesn't have the confidence stated, or (c) knows she has no basis for assertion. -voidable K, possible tort action. Fraud in factum: voids K

Answer 32

Physical: voids K Economic: makes K voidable. 4 elements: 1. existence of threat 2. that's improper (legally actionable threats, OR non actionable threats that (1) result in exchange that appears one sided AND (1) involves imposing harm w/o benefit, or (2) prior unfair dealings significantly increase effectiveness of threat, or (3) threat is otherwise illegitimate use of power 3. induces assent 4. is sufficiently grave to induce such assent, or leave recipient with no real or reasonable alternative.

Answer 33

Economic duress: threat to breach contract was improper because it was in bad faith, sufficiently grave because there was no substitute performance, damages wouldn't remedy reputation.

Answer 34

No economic duress because progressive agreed to the raised K price.

Answer 35

Woman was induced by misrepresentation to take dance classes, justified in relying on dance instructors opinion as someone with special skill, judgement and objectivity.

Answer 36

Misrepresentation: assertion of possession (fact) was justifiable to rely one, was material to K.

Answer 37

In factum: fraud about nature of transaction (receipt signature actually signs away rights). Voids K Promissory fraud: induces transaction. K is voidable, can be ratified.

Answer 38

Procedural: gross inequality of bargaining power - education/lack thereof, -did each party have reasonable opportunity to understand terms of K? - were terms hidden in a maze of fine print? - deceptive sales tactics? Substantive: terms unreasonably favor the other party, manifestly one-sided in light of commercial background and needs of case and trade.

Answer 39

Procedurally unconscionable: company knew buyer did not have income to support purchases or understand the terms. Substantively: pro rata clase favors store

Answer 40

1. Signature of party against whom enforcement is sought 2. Reasonable ID of K's subject matter 3. Sufficient indication that K made by parties OR offered by signer to other party, AND 4. Essential terms of the unperformed promises to be stated with reasonable certainty

Answer 41

The following Ks are subject to statute of frauds: 1. Contract to answer for duty of another 2. Contract for marriage 3. Contract for sale of interest in land (Boone v. Coe) 4. Contract that is not to be performed within one year from the making thereof

Answer 42

1. Signature of party against whom enforcement is sought 2. Some writing sufficient to indicate that contract for sale of goods has been made between parties, AND 3. Specification of quantity of goods sold.

Answer 43

K for sale of goods for price of $500 or more is not enforceable unless there is writing to indicate K between parties and signed by party against whom enforcement is sought. A writing isn’t insufficient because it omits/or incorrectly states term, but K isn’t enforceable beyond quantity of goods in such writing. Exceptions: - Specially manufactured goods not suitable for sale to others in ordinary course of seller’s business, and seller has made substantial beginning of manufacture or commitments for procurement. - Admission in pleadings or testimony that an agreement was reached - Goods already received/accepted or payment already made/accepted

Answer 44

Lease was an interest in land: governed by SoF. No exceptions applicable, and no reliance recoverable because that would be tantamount to upholding an unenforceable K.

Answer 45

Oral agreement for 5 years was unenforceable under the UCC, but awards $2k in reliance under promissory estoppel life 2 (courts today may not do this).

Answer 46

No part performance: offer to pay was in contemplation of performance. PE didn't apply, only in exceptional circumstances.

Answer 47

Name on email is sufficient to constitute a "signature."

Contract formation Flashcards

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