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Contracts Flashcards

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1
Q

What is a contract?

A

A contract is just a legally enforceable agreement.

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2
Q

All or nothing rule exception

A

Divisible contracts-the agreement is divided into two mini contracts.

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3
Q

Predominant Purpose Rule

A

Does the good or service play the bigger role?

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4
Q

What are the four elements of formation?

A

1) Agreement (offer and acceptance) 2) Consideration 3) Defenses to formation 4) SOF

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5
Q

Offer

A

Manifestation of willingness to enter into an agreemet by the offeror that creates a power of acceptance in the oferee

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6
Q

Offer and acceptance are governed by the

A

Objective test (outward appearance of words and actions matter)

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7
Q

Key question in creating a legal offer

A

Whether an offeror displays an objectively serious INTENT to be bound

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8
Q

CL requirement for an offer

A

All essential terms must be covered in the agreement (parties, subject, price, and quanity)

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9
Q

UCC requirements for an offer

A

Only essential term is quantity –> UCC will fill the rest of the gaps

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10
Q

Requirements and output contracts

A

Permissible under the UCC ( will sell/buy everything from you)

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11
Q

Invitation to deal

A

A preliminary communication that reserves a final right of approval to the speaker

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12
Q

Terminating an offer (6 things)

A

1) the offeror revokes the offer by express communication 2) the offeree learns that the offeror has taken an action that is absolutely inconsistent with the ability to contract (constructive revokation) 3) The offeree rejects the offer 4) the offeree counter-offers 5) the offeror dies 6) reasonable amount of time passes

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13
Q

Irrevokable offer (Option)

A

Offeree pays consideration in exchange for the offer to remain open

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14
Q

Merchant

A

Someone who regularly deals in the type of good at issue

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15
Q

Firm offer requirements (TEST)

A

A merchant can make a firm offer to buy or sell goods. A firm offer must be written, signed by the offeror, and contain an explicit promise not to revoke.

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16
Q

Time period for a firm offer

A

1) as long as stated in the offer or 2) a reasonable time period not to exceed 90 days

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17
Q

Unilateral contract

A

Cannot be revoked when the party has started performance. Arises from a promise that requests acceptance by an action of the promisee. Promisee has the right to finish.

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18
Q

Detrimental Reliance

A

Arises when an offeree reasonable and detrimentally relies on the offer in some foreseeable manner (general/subcontract relationships)

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19
Q

Acceptance

A

A manifestation of a willingness to enter in the agreement by the offeree (objective test and the offeree must accept according to the offeror’s terms)

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20
Q

Acceptance (TEST)

A

1) must be specifically directed to the person trying to accept it 2) Oferee must KNOW about the offer in order to accept it 3) Must communicate your acceptance to the other party

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21
Q

Mailbox Rule (General Rule)

A

An acceptance sent by mail is effective when the letter is sent

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22
Q

Mailbox rule does not apply in 4 situations:

A

1) the offeree sends something else first (rejection etc) 2) To other types of communications 3) option contracts or 4) unclear whether it applies to email

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23
Q

Acceptance by silence (TEST)

A

Offer says that acceptance must come by silence and the offeree intends to accept the offer by silence

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24
Q

Implied in fact contracts

A

You can communicate an acceptance with gestures or actions called an implied-in-fact contract

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25
Mirror image rule
CL rule-the terms in the acceptance must match the terms of the offer exactly-or it is not an acceptance but a COUNTEROFFER
26
2-207 Text
A definite and seasonable expression of acceptance which is sent within a reasonable time operates as an acceptance even though it states terms additional to or different from those offered or agreed upon UNLESS ACCEPTANCE IS EXPRESSLY MADE CONDITIONAL UPON ASSENT TO THE ADDITIONAL OR DIFFERENR TERMS
27
Additional term under 2-207 TEST
The new term in the acceptance may control if 1) both parties are merchants 2) the new term does not materially alter the deal 3) the intial offer did not expressly limit acceptance to its terms 4) the offeror does not reject within a reasonable time to the new term
28
Knock-Out Rule
When acceptance has a DIFFERENT term from the initial offer (as opposed to just an additional term) --> minority say the initial offer controls the terms. Majority --> both terms knocked out and UCC gap-filling occurs.
29
Acceptance based on conduct under 2-207(3)
Only terms that both writings agree on become part of the contract with all other terms supplied by the UCC default rules
30
UCC confirming memos under 2-207
Confirming memo can add new terms which means to run through the 2-207 test
31
Consideration defined
A deal in which the parties exchange promises involving a legal detriment or benefit
32
Do gift promises or conditional gifts count as bargained for consideration?
No.
33
Nominal consideration
A pretense of consideration is insufficient.
34
Illusory promise
"I would like to buy your car if I had more money."
35
Satisfactory contract example
If you paint a painting that I like, I will pay you, and this is consideration.
36
Pre-existing Duty Rule
a promise to do something that you are already entitled to do is not consideration
37
Pre-existing duty rule exception
A change in performance (like paying a bike instead of cash); A third party promising to pay; or unforeseen difficulties that would excuse performance
38
Debt Contract modification
If debt isn't due yet, you can't sue if it's not yet due
39
UCC modification
Ask whether the modification is made in good faith
40
Three key elements to reliance
1) a promise is made that would be reasonably expected to induce reliance; 2) the promisee does indeed take detrimental action in reliance on the promise; and 3) injustice can only be avoided by enforcement of the promise
41
Quasi Contract Test
1) the plaintiff confers a measurable benefit on the defendant; 2) the plaintiff reasonably expected to get paid; and 3) it would be unfair to let the defendant keep the benefit without paying
42
Moral obligation subsequent promise (the half-theory)
A few jurisdictions have case law suggesting that a moral obligation plus a subsequent promise to pay can be binding
43
Misunderstanding test
1) the parties use a material term that is open to two or more reasonable interpretations (objective test does not apply); 2) each die attaches a different meaning to the term; and 3) neither party knows, or should know, of the confusion
44
Incapacity
Minors can't make contracts unless it is a contract for necessities (things to live) or the party ratifies it once they're 18
45
Mentally Ill 2 standards:
The person cannot understand the nature and consequences of his actions; or the person cannot act in a reasonable manner in relation to the transaction (if the other side knows or has reason to know this)
46
Mistake test
A mistake is a belief that is not in accord with a present fact
47
Mutual mistake test
1) there is a mistake of FACT existing at the time that the deal is made; 2) the mistake relates to a basic assumption of the contract and has a material impact on the deal; and 3) the impacted party did not bear the risk of mistake
48
Unilateral Mistake
1) there is a mistake of fact existing at the time the deal is made; 2) the mistake relates to a basic assumption of the contract and has a material impact on the deal and 3) the impacted party did not bear the risk of mistake 4) either the mistake would make the contract unconscionable OR the other side knew of, had reason to know of, or caused the mistake
49
Misrepresentation Test
1) a misrepresentation of a present fact (not opinion); 2) that is material OR fraudulent (intentional); and 3) that is made under circumstances in which it is justifiable to rely on the misrepresentation
50
Fraud in the execution
You trick someone into signing something that they do not even know is a contract
51
Nondisclosure
Normally you do not have to tell the other side about all material facts related to the deal unless there is a special fiduciary relationship or active concealment
52
Duress
An improper threat that deprives a party from making a meaningful choice to contract
53
Economic duress
Arises when one party makes threats to induce another party to contract
54
Undue Influence
When one party puts very intense sales pressure on another party who often seems weak-minded or suseptible to high-pressure sales tactics
55
Illegality
Illegal contracts are enforceable but a contract entered in furtherance of an illegal act will be enforceable
56
Unconscionability
Procedural unconscionability (a defect in the bargaining process like a hidden term or an absence of meaningful choice or substantive unconscionability a rip-off in some term of the contract)
57
SOF Types
Marriage; Suretyship; One-Year; UCC of $500 or more; Real Property (has to transfer an interest)
58
Main-purpose exception suretyship
If the main purpose in agreeing to pay the debt of another is for the surety's own economic advantage, then we are not in SOF world
59
1 year rule is very
NARROW. Question is whether it would be IMPOSSIBLE to perform the contract.
60
Full service and SOF
Full service by 1 side satisfies the SOF

Bar Exam (2 decks)

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