Contracts Flashcards
What is an offer in contract law?
A manifestation of willingness to enter into a contract, creating a power of acceptance in the offeree. Must be definite (terms: parties, subject, price, quantity, etc.)
How can an offer be terminated?
An offer may be terminated by:
* Revocation
* Rejection
* Counteroffer
* Lapse of time
* Death of the offeror before acceptance
What is an option contract?
An offeror promises to hold the offer open for a specific time in exchange for consideration
What defines a firm offer under UCC?
A merchant’s signed written promise to keep an offer open for a maximum of 3 months
What is acceptance in contract law?
A clear expression of assent to the terms of the offer
What is the mirror image rule?
Acceptance must exactly match the offer under common law
What is UCC 2-207?
Additional terms in acceptance may become part of the contract unless they materially alter the contract or are objected to
Define consideration in contract law.
A bargained-for exchange of legal value. A promise must induce a detriment or a return promise
What is the Pre-Existing Duty Rule?
A promise to perform a duty already owed is not valid consideration unless there is a new legal detriment
Is consideration required for contract modifications under UCC?
No, consideration is not required for contract modifications made in good faith
What does the Statute of Frauds (SOF) require?
Certain contracts must be in writing and signed by the party to be charged. Applies to:
* Marriage
* Contracts that cannot be performed within one year
* Land sale contracts
* Executor’s promise to pay estate debts
* Sale of goods $500+ (UCC)
* Suretyship (promise to pay another’s debt)
What is the Parol Evidence Rule (PER)?
If a written contract is fully integrated, prior oral or written agreements cannot contradict its terms
Under what circumstances can a contract be voidable due to misrepresentation?
A contract may be voidable if a party materially misrepresents a fact and the other party relies on it
What is duress in contract law?
A contract is voidable if a party was forced to agree under improper threats with no reasonable alternative
What does unconscionability refer to?
A court may refuse to enforce a contract if it is shockingly unfair due to procedural or substantive abuse
What is a condition precedent?
An event that must occur before a party’s performance is required
What is substantial performance?
If a party substantially performs, the contract is enforceable, but the non-breaching party may claim damages for defects
What is the Perfect Tender Rule?
Seller must deliver perfect goods. If not, the buyer may reject, accept, or request cure
What is anticipatory repudiation?
If a party unequivocally refuses to perform before performance is due, the non-breaching party may sue immediately or wait for performance time
What is the difference between impossibility and impracticability?
Impossibility is when performance is objectively impossible; impracticability is when performance is unreasonably difficult or expensive due to unforeseen events
What are expectation damages?
Places the non-breaching party in the same position as if the contract had been performed. Formula:
(Market Price – Contract Price) + Incidental/Consequential Damages – Mitigation
What are reliance damages?
Reimburses the non-breaching party for expenses incurred in reliance on the contract
What is restitution in contract law?
Prevents unjust enrichment by returning benefits conferred to the other party
What are liquidated damages?
Enforceable if:
* Damages were difficult to estimate at formation
* The amount is reasonable and not a penalty
