Contract Law Flashcards
(47 cards)
1
Q
Contract enforceability
A
-
Valid
- Agreement
- Consideration
- Contractual capacity
- Legality
-
Voidable (unenforceable)
- Valid contract can be avoided or rescinded
- Example: contract with a minor
-
Void
- No contract
2
Q
Agreement
A
- Agreement = Offer and Acceptance
- Once an agreement is reached,
- if the other elements of a contract are present,
- a valid contract is formed
3
Q
Cat adoption contract
A
- Julie doesn’t like the format of this contract
- The Lost Dog & Cat Rescue Foundation
- Has all the identifying information at the top
- Gives the contract a name: Cat Adoption Contract
- Two parties
- Lost Dog foundation
- Adopting Party
- Topic or point of the contract: Cat adoption
- Specifics over the content of the contract
- Need to describe all in detail
- Language should be precise
4
Q
Cat adoption contract:
Paragraph 6
A
- Condition subsequent
- Agree not to declaw the cat
- Julie is not sure that this is an enforceable provision
5
Q
Cat adoption contract:
Paragraph 7
A
- Julie does not like this provision
- If not already spayed/neutered, then adopting party should do it
- Changes from a condition precedent to a condition subsequent
6
Q
Condition precedent
A
- before the contract
7
Q
Condition concurrent
A
- along with the contract
8
Q
Condition subsequent
A
- after the contract is executed
- example:
- job contract for after law school
- must graduate and pass bar or contract is voided
9
Q
Requirements of the Offer
A
- Offeror’s serious intention
- Definiteness of terms
- Communication
10
Q
Can you write a contract on a napkin?
A
- Yes
11
Q
Lucy v. Zehmer case
basic
A
- August 18, 1953 ???
- Lucy is the buyer
- Zehmer is the owner and seller of the property
- Ferguson Farm is the property
- Supreme Court of Virginia
- In trial court, Lucy lost the case, but Supreme Court of Virginia reversed their decision (Lucy won)
12
Q
Lucy v. Zehmer case
details
A
- Lucy was a lumberman and farmer
- Lucy knew Zehmer for 15 years
- December 20
- Zehmer operated a restaurant, filling station, and motor court
- Lucy attempted to buy the Ferguson Farm
- “I bet you wouldn’t take $50,000 for that place”—Lucy
- Wrote agreement on the back of a restaurant check
- Re-wrote agreement to include Mrs. Zehmer
- Lucy offered $5, but Zehmer declined the down payment
- “You haven’t got $50,000 in cash.”—Zehmer
- Mrs. Zehmer said “It’s nothing but a joke.”
- Zehmer refused to sell farm to Lucy
- “High as a Georgia pine.” “Nothing but a couple of drunks…”
13
Q
Lucy v. Zehmer case
ruling
A
- Supreme Court of Virginia determined that there was serious intent and that is was a valid contract
- In the field of contracts, we must look to the outward expression of a person, rather than at his secret, hidden intention
- At no time prior to the execution of the contract did Zehmer indicated that he was joking about the execution of the contract
- Whether it was in jest or not, it was still a valid contract
- Awarded specific performance of the contract – must actually sell farm to Lucy, not merely monetary damages
14
Q
Offeror’s Serious Intention
A
NOT OFFERS:
- Offers made in anger, jest, or undue excitement
- Expressions of **opinions **
- Statements of intention or **preliminary negotiations **
-
Advertisements, catalogs, price lists, and auctions
- treated as invitations to negotiate
15
Q
Definiteness of terms (expressed or implied)
A
- Identification of parties
- Object or subject matter of the contract
- Consideration to be paid
- Time of payment, delivery, or performance
16
Q
Communication
A
- An offer must be communicated
17
Q
Termination of the offer
A
- By the offeror
- By the offeree
- By operation of law (NOT TESTABLE)
- lapse of time
- destruction of property
- death or incompetence
- supervening illegality
18
Q
Three ways to terminate an offer
A
- Revocation – by the offeror
- Rejection – by the offeree
- Counteroffer – by the offeree
19
Q
Revocation
A
- Must be communicated
- must express repudiation
- “I revoke the offer”
- Acts inconsistent with offer
- Do it before the offer is accepted
20
Q
Rejection
A
- Done by offeree
- rejected = terminated
- effective when rejection is received by offeror
21
Q
Counteroffer
A
-
offeree simultaneously
- rejects the offer
- makes a new offer
22
Q
Mirror Image Rule
A
- Requires that the terms of the offeree’s acceptance to match exactly the offeror’s offer for a valid contract to be formed
- Common law rule
- Very strict; must match 100%
- Julie says “mirror image rule is the old rule, but isn’t always going to be followed”
23
Q
Acceptance
A
- voluntary act by the offeree that shows
- assent, or agreement, to the terms of an offer
- may consist of words or conduct
-
Unequivocal acceptance
- mirror image rule
-
Communication of acceptance
- bilateral contracts
- unilateral contracts
-
Mode and timeliness
- mailbox rule
- Technology and acceptance rules
24
Q
Mailbox Rule
A
- mode and timeliness of acceptance
- Acceptance is effective on dispatch, providing that authorized means of communication is used
- Offeror specifies (expressly or impliedly) how acceptance should be made
- Effective if properly dispatched (mailed, shipped)
25
*consideration*
* Usually, its all about the $$$$$
* **Value in exchange for a promise**
* Legal **benefit** received by one person
* and legal **detriment** to another person
* Must be something of **legally sufficient value**
* must be a **bargain for exchange**
* If you lack consideration, you are not going to have a valid contract
* Courts don’t like to get involved with consideration
26
*roots of consideration*
* Roots in Roman law
* Concept of ***causa***
* Must have both
* a reason for making a promise
* sufficient reason for enforcing a promise
* Without *causa*, there is no promise
27
*consideration as forbearance*
* Sometimes legally sufficient value can come from ***forbearance***
* (not doing something)
* Sidway case (**uncle/nephew case**)
* Uncle told his nephew that he would give him $5000 if he didn’t drink, use tobacco, or gamble until he was 21
* Uncle died and estate said they were not going to pay him, claimed no consideration
* Court ruled **_was_ consideration** because of what he had given up
28
*capacity*
* Minors
* Intoxication
* Mental incompetence
29
*legality*
* *Is the contract formed for a legal purpose?*
* *Can I contract to buy cocaine?—**NO***
* *Can I enter into a contract to hire a hit man?—**NO***
30
*Contracts contrary to public policy*
* Covenants ***not to compete***
* ***Exculpatory*** clauses
* Limiting liability
31
*Statute of Frauds*
* State statutes that **require certain** types of **contracts to be in _writing_**
* **Land**
* If contract terms cannot be performed within **one year** from contract formation
* Promises made in consideration of **marriage**
* (there are others—not testable)
32
*Contract remedies*
* Law
* Equity
* Rescission
* Restitution
* Specific performance
* Reformation
33
*Performance and discharge*
* A party may be **discharged** from a valid contract by
* ***full performance*** or ***material breach*** by the other party
* a ***condition*** occurring or not occurring
* ***agreement*** of the parties
* operation of ***law***
34
*Conditions*
* Possible ***future event***, the occurrence or nonoccurrence of which ***will trigger***...
* the ***performance*** of a legal obligation or...
* ***terminate*** an existing obligation...
* ...under a contract
* Types:
* Conditions ***pre**cedent*
* Conditions ***con**current*
* Conditions ***sub**sequent*
35
*Discharge by performance*
* The contract **comes to an end** by...
* ***Complete performance***
* strict performance
* ***Substantial performance***
* performance does not vary greatly and creates **substantial benefit**
* other party **_must_ pay**
36
*Material breach of contract*
* Breach of contract
* The nonperformance of a contractual duty
* ***failure of consideration***
* ***nonbreaching party is discharged*** from contract
37
*Anticipatory repudiation*
* If before performance is due,
* one party refuses to perform his or her contractual obligation
* Results in ***material breach***…
* The nonbreaching party should...
* **_not_** be required to perform
* have the opportunity to seek a ***similar contract elsewhere***
* Idea of ***minimizing losses*** (get another contract)
38
*Mitigation of damages*
* When breach of contract occurs, the innocent injured party is held to a ***duty to reduce the damages that he or she suffered***
* Duty owed ***depends*** on the nature of the contract
39
*Impossibility, commercial, frustration*
* Personal contract where **one party dies**
* contract **subject matter** **destroyed**
* Frustration – **supervening event** makes it impossible to attain point of contract
* **RARE!**
40
*Types of damages*
* ***Compensatory***—compensate injured party for damages _actually sustained_
* **Sale of goods**—difference between the contract and market price
* **Sale of land**—same as sale of goods
* **Construction contracts**—depends on when and who breaches
* ***Consequential***—_foreseeable_ damages as a consequence of the original injury
* ***Punitive***—designed to _punish_ the wrongdoer and deter similar activity in the future.
* ***Nominal***—no financial loss.
41
*Liquidated damages vs. penalties*
**(NOT TESTABLE)**
* ***Liquidated***
* amount determined by court order
* ***enforceable***
* ***Penalties***
* designed to punish the breaching party
* generally ***_not_ enforceable***
42
*Specific performance*
* Equitable remedy calling for the ***performance of the act promised*** in the contract
* Remedy where the consideration is...
* **unique**
* sale of **land**
* **scarce**
* **_not_** available ***for personal services***
43
*Reformation*
**(NOT TESTABLE)**
* Equitable remedy allowing a contract to be reformed, or ***rewritten to reflect the parties true intentions***
* Available when an agreement is ***imperfectly expressed*** in writing
44
*Quasi-contract*
**(NOT TESTABLE)**
* Equitable remedy imposed by courts to ***prevent unjust enrichment***
* Requires:
* A benefit was conferred to the other party
* Party conferring did so with the reasonable expectation of being paid
* The benefit was not volunteered
* Retaining benefit without paying for it would result in unjust enrichment of the party receiving the benefit
45
*Can you have your cake and eat it too?*
* **No**
* Remedy must usually be
* **monetary** _or_
* **specific performance**
* **_not_ both**
46
*Election of remedies*
* Doctrine created to
* ***prevent double recovery***
* Nonbreaching party must
* ***choose which remedy*** to pursue
47
*Contract provisions – limiting remedies*
* ***Exculpatory*** clauses
* Provisions stating that...
* ***_no_ damages can be recovered***
* ***Limitation of liability*** clauses
* Provisions that affect the availability of certain remedies
