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Flashcards in Contracts Deck (81)
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1

type of law used in K

service: common law; good (all things moveable): UCC. If K has both goods and services, FL law determines whether the main purpose of the K is goods or services.

2

K formation requirements

1-mutual assent: offer & acceptance; 2-consideration; and, 3-no valid defenses

3

offer definition

invitation to enter into a K: 1-promise, 2-certain essential terms, and 3-communication w/ reasonable expectation of a K?

4

3 types of termination

revocation of offer; rejection; and, lapse of time

5

revocation of offer definition

an offer is revocable before acceptance, and generally effective upon receipt unless: 1-option contract; 2-detrimental reliance; and 3-partial performance of unilateral contract

6

option contract rules

1-common law: consideration paid to keep offer open for a certain period of time; 2-FL mailbox rule: does not apply to option K; 3-UCC Firm Offer: offeror is a MERCHANT who signs written assurance that offer will be held open

7

detrimental reliance definition

the offeror could reasonably expect that the offeree would rely to his detriment on the offer; the offer will be irrevocable for a reasonable period of time in an option contract

8

partial performance of unilateral K: definition

where offeree's performance has already begun, offeree has a reasonable time in which to perform,but offeree is NOT mandated to complete performance

9

rejection of K

includes counter-offer and conditional acceptance

10

lapse of time definition

failure to accept offer w/i a reasonable period of time or specificied period

11

acceptance in general

a manifestation of intent to enter into an agreement; must be communicated in any "reasonable manner" before offer is terminated

12

common law acceptance rule

mirror image rule: acceptance must be identical to the offer; otherwise no K

13

UCC acceptance rule

a K is formed even if acceptance contains different or additional terms. 1-if one party is not a merchant, terms of offer control; 2-if both parties are merchants, the additional terms in the acceptance become part of the K unless: they materially alter the K, the offer expressly limits acceptance to the terms of the offer, or the offeror objects to the terms w/n a reasonable time

14

mailbox rule of acceptance

K created at moment of dispatch unless: 1-stipulation; 2-option K; 3-first arrival of rejection/acceptance; 4-rejection and detrimental reliance

15

consideration in general

requires: 1-bargained for exchange; 2-legal value (benefit or detriment) between parties. FL RULE: (legal minority value rule) that consideration is either benefit or a detriment to one party.

16

consideration: pre-existing duty

FL finds consideration when a pre-existing duty was owed to a 3rd party

17

consideration: mutuality

both parties must be bound or = "illusory K"; discuss meetings of the minds, intent to be bound, mutual promises

18

consideration: promissory estoppel

consideration is not necessary when: 1-promise reasonably expected to induce action or forbearance; 2-of q definite and substantial character, and; 3-action or forbearance induced causing detrimental reliance. Limited remedies: restitution and reliance damages

19

consideration substitute-FL promises under seal

imports consideration because oral K is harder to modify, but not conclusive

20

no valid defenses exist generally

(usually 2-3 defenses in fact pattern) enforcement, absence of mutual assent, incapacity, excuse/discharge of performance or non-performance

21

no valid defenses exist: enforcement

1-SOF: a K w/i the statute must be 1-in writing, 2-signed by party to be charged, and 3-contain the essential terms of the K

22

Statute of Frauds K types

land; one year rule Ks; sale of goods over $500.

23

statute of frauds: land

promise creating an interest in land must adequately describe the land, identify the parties, and value to be paid. Ex.: sale of land, leases over 1 yr, fixtures, minerals/structures severed by buyer; mortgages

24

statute of frauds: one year rule

promises that cannot be completed w/i one year from DATE OF AGREEMENT; must be in writing

25

statute of frauds: sale of goods

sale of goods over $500, except where: 1-the agreement is for specifically manufactured goods; 2-the agreement is b/w merchants & one sent a confirmatory memo; 3-a party admits the K in court of pleadings; 4-part payment or acceptance has been made, which makes the K enforceable to that extent

26

FL specifically applies SOF to:

healthcare guarantees, debts barred by SOL, newspaper subscriptions, home solicitation sales, home improvement Ks, & credit card agreements to be in writing

27

defenses: enforcement: unconscionability

a K may be VOIDABLE where its clauses are extremely one-sided or unfair when made. This includes Ks w/ inconspicuous risk-shifting provisions (hidden disclaimers of warranty) and Ks of adhesion ("take it or leave it" where the parties don't have equal bargaining power). Tested at TIME K WAS MADE, not later.

28

defense: absence of mutual assent: unilateral mistake

K enforceable, unless: 1-unconscionable or 2-other party knew/should have known of the mistake

29

defense: absence of mutual assent: mutual mistake

mutual mistake is a defense if: 1-concerns a basic assumption, 2-adverse material effect on agreed upon exchange, and 3-adversely affected party did not assume risk of the mistake

30

defense: absence of mutual assent: ambiguity

1-neither party aware-no K unless both parties happened to intend the same meaning; 2-both parties aware-no K unless parties in fact intended the same meaning; 3-one party aware-binding K exists based on the ignorant party's reasonable interpretation of ambiguous terms