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Pre-existing Duty Rule --Summary R2d Contracts Section 89

The agreed price increase is enforceable without any new consideration if based on a good faith reason that was not anticipated when the parties originally entered the contract. No signed writing is required to enforce the modification


Pre-Existing Duty Rule Summary under NY General Obligations Law Section 5-1103

In contracts that do not involve the sale of goods, the General Obligations Law abolishes the Pre-Existing Duty Rule, provided the price modification is contained in a writing signed by the party to be charged with breach of the modified contract


to be a "valid" acceptance of an offer

(1) Acceptance must be made by the one to whom the offer was made, "the offeree." An offer is non-assignable, but once the offer is accepted and a contract has been formed, rights and duties generally can be assigned.
(2) Acceptance must be unconditional and according to the terns and conditions of the offer


Basic Elements of a contract

1- Necessary and Definite Terms
2- Acceptance of a valid offer
3- Consideration supporting the promise; and
4- A binding offer


Liability for breach of a contract requires

Proof of a contractual relationship between the plaintiff and the defendant, in other words, "there must be 'privity' of contract" between the parties


Definition of a Contract

A contract is a voluntary agreement (no duress), mutually assented to by competent parties (not infants or incompetents) supported by valid consideration, to do or not to do a specific thing. it is a promise or set of promises, which if breached, law or equity will provide a remedy


Seven General Types of Contracts

1- Unilateral
2- Bilateral
3- Expressed
4- Implied in fact or law
5- Integrated
6- Quasi


Executory Contract

An executory contract is a valid contract that has been entered into, but has not been performed. Once the contract has been performed, it is called a performed or completed contract


Acceptance of the offer is defined as

the asset by the offeree to all of the terms and conditions of the offer


Unilateral Contract

A unilateral contract is a promise for an act. The offeror of a unilateral contract seeks a completed performance, not merely a promise of future performance. In a unilateral contract, the promise to pay is the offer and the Act; once performance is completed, the offer is deemed accepted


Distinguish between a common law unilateral contract and the R2d of Contracts and UCC 2-206

At common law, in a unilateral contract, at no time is the offeree bound to perform, even if the offeree starts performance there is no legal or contractual duty to complete performance. Both the R2d and UCC 2-206 alter the common law and hold that when the offeree starts to perform under a unilateral contract, the offeree must complete performance, otherwise the offeree is in breach


To be a valid acceptance of an offer

An acceptance must be an affirmative response. Silence cannot be construed as acceptance. Thus language such as "unless this offer is rejected within 7 days, the offer will be deemed accepted" cannot bind the offeree.

Under traditional contract law, identical cross-offers generally do not form a contract, they are treated as two separate offers.

Acceptance must be either by a promise or an act

Acceptance of a unilateral contract need not be conveyed to the offeror prior to performance, but once complete the offeree must give notice if the offeror would not otherwise know of the performance

Offeree must be aware of the offer before the offeree begins performance


Bilateral Contract

A bilateral contract is a promise for a promise; it arises where both parties make promises (express or implied), one generally being the consideration for the other. A binding contract is immediately formed without further action by either party


Bilateral Contract offers Revocation (Summary)

The revocation must be communicated to the offeree before acceptance has been dispatched


Express Contract

An Express Contract is an agreement where the parties express the terms orally or in writing. The contract is an agreement "manifested by words."


Contracts implied-in-fact

Implied-in-fact contracts are enforceable agreements, the terms of which are implied circumstantially from what the parties say and do. Implied-in-fact contracts arise from one party's behavior and conduct, which evidences that the party implied entered into a contract to pay or otherwise return performance. The conduct is based on an objective reasonable standard.


Quasi-Contract (Implied-in-law)

A Quasi-contract is not a contract; it is an obligation imposed by law, to do justice even though it is clear that no promise was ever made or intended. It is a fiction imposed by law to avoid an unjust enrichment, or to compensate a performing party who has detrimentally relied on the unenforceable contract


Quasi-contracts arise when either:

1-There is no express agreement between the parties and no implied conduct by the obligor to pay, but the law implies a contract to avoid an unjust enrichment. 2- There is an express agreement (contract), but it is unenforceable due to a contract defense such as illegality, statute of frauds, mutual mistake, duress, incapacity, impossibility of performance


Quasi-contract claims can be asserted based on claims for

Saving lives and saving property. Recovery on a claim premised upon quasi-contract or unjust enrichment is limited to the reasonable value of the services rendered by the plaintiff


A quasi-contract exists between a parent and a third person when

A third person supplies a child with "necessaries" that the parent should have been supplying, provided that the parent was not otherwise adequately providing for that child


An express rejection of the offer by the offeree is

A written, oral, or inconsistent action by the offeree expressly rejecting an offer and thereby extinguishing the offer


An Executory contract only terminates only

Under the Doctrine of Impossibility of performance, where the deceased or incapacitated has a non-delegable duty to perform. Death does not terminate an executory contract once it has been formed, except for the exception above


What is quantum meruit

Literally means "as much as deserved." It is an equitable doctrine based on an implied promise on the part of the defendant to pay the plaintiff as much as he reasonably deserves to be paid for his or her labor. In fixing reasonable value, the court looks at the price usually and customarily paid for such services


In order to assert a claim in quantum meruit, a claimant must establish the following four elements:

1- The performance of services was in good faith; 2- The acceptance of services by the person to whom they are rendered
3- An expectation of compensation; and
4- The reasonable value of the services

Quantum meruit requires the absence of a valid enforceable contract


A plaintiff cannot seek recovery under a theory of quantum meruit when

the suing party has fully performed on a valid written contract/agreement, the existence of which is undisputed and the scope of which clearly covers the dispute between the parties. Therefore, when a dispute exists or enforceability of a contract which covers the dispute in issue the plaintiff can recover in quantum meruit if he fails to establish a contract


Pre-Existing Duty Rule [Contract Modification]

This doctrine assumes an existing contract in which both parties have obligated themselves. The pre-existing duty rule arises where one party demands more money and the only consideration in support of this demand is his or her pre-existing duty to perform or sell the goods


what is an integrated contract

An integrated (sometimes referred to as a "fully integrated") contract, is a contract that contains the entire agreement between the parties. Where a contract is integrated, evidence of side-deals or unexpressed terms will not be admissible in a later dispute.


Evidence of a fully integrated contract includes a

"Merger clause," which expressly states "this agreement constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes and replaces any and all prior agreements and understandings between them regarding such subject matter."


For a binding contract to exist

There must be an express or implied offer, coupled with an express or implied acceptance of that offer E.g., there must be mutual assent to the agreement


How do you determine the existence of mutual assent

Mutual assent is not the subjective intent or understanding of the parties, but rather the objective manifestations of the parties and how a reasonable person would interpret them. What one of the contracting parties subjectively thought or meant is generally immaterial in the interpretation of the contract; it is what a reasonably prudent person would objectively construe and consider to be contract to be