Formation, Offer and Acceptance, etc Flashcards

Question

What are two problems that occur from the last shot rule?

Answer 1

Opportunism- Incentive to be the last person to “sneak in” a self-serving confirmation right before performance begins Contracting costs- increases transaction costs of reading / processing post- contractual communications, even when prior agreement seemed extremely clear at the time.

Answer 2

The creation of UCC 2-207

Answer 3

Mirror image rule- Unless the offer and acceptance are mirror images of each other, we don’t have a contract

Answer 4

Majority rule- applies only when there was an exchange of a written offer and a written acceptance/confirmation

Answer 5

applies even if offer does not contain a written form, so long as there is a written acceptance and/or written confirmation

Answer 6

(1) A definite and seasonable expression of acceptance or a written confirmation 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 on assent to the additional or different terms.

Answer 7

(2) The additional terms are to be construed as proposals for addition to the contract. Between merchants such terms become part of the contract unless: (a) the offer expressly limits acceptance to the terms of the offer; (b) they materially alter it; or (c) notification of objection to them has already been given or is given within a reasonable time after notice of them is received. - The law does not hold merchants to the same standards because they have a lot of privileges

Answer 8

(3) Conduct by both parties which recognizes the existence of a contract is sufficient to establish a contract for sale although the writings of the parties do not otherwise establish a contract. In such case the terms of the particular contract consist of those terms on which the writings of the parties agree, together with any supplementary terms incorporated under any other provisions of this Act. (follows the last shot rule in many ways) - Even if the paperwork (like emails, invoices, or contracts) between two parties doesn't match up perfectly and wouldn’t normally form a contract, a contract can still exist if both sides act like there’s a deal

Answer 9

1. Offeree’s response/confirmation materially alters obligations in a one-sided way - If the changes are significant and benefit only the offeree, the response may be seen as a counteroffer, not a true acceptance 2. Magic words approach - Focuses on specific language used, and if these “magic words” are present, courts are more likely to treat the response as conditional acceptance 3. Demonstrated unwillingness to proceed without acceptance of new/different terms (the actual good test)- looks at whether you performed and how you conducted yourself. It places the burden

Answer 10

1) Acceptance by promise – the most natural way 2) Acceptance by performance

Answer 11

Today we no longer use the words unilateral vs bilateral contracts, but historically unilateral meant a contract that could only be accepted via performance

Answer 12

offer invites acceptance in any manner and by any medium reasonable in the circumstances. (this is the default rule)

Answer 13

is interpreted as inviting the offeree to accept either by promising to perform what the offer requests or by rendering the performance, as the offeree chooses.

Answer 14

Language or circumstances sometimes make it clear that the offeree is not to bind himself in advance of performance (Ex- cases of rewards or prizes)

Answer 15

sufficient to manifest or communicate the acceptance to the offeror.

Answer 16

Generally no

Answer 17

Where an offer invites an offeree to accept by rendering a performance, no notification is necessary to make such an acceptance effective unless the offer requests such a notification.

Answer 18

the contractual duty of the offeror is discharged unless - (a) the offeree exercises reasonable diligence to notify the offeror of acceptance, or - (b) the offeror learns of the performance within a reasonable time, or - (c) the offer indicates the notification of acceptance is not required.

Answer 19

Traditional Rule: The offer may generally be revoked all the way up to the time there is complete performance

Answer 20

(1) Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance. (so starting to do the thing or offering to do it) (2) Such an acceptance operates as a promise to render complete performance

Answer 21

offering something of value (like money or services) to fulfill a duty or a deal

Answer 22

(1) Where an offer invites an offeree to accept by rendering a performance and does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance or tenders a beginning of it. The offeror's duty of performance is conditional upon the offeree's completion of the performance

Answer 23

Silence is generally not a form of acceptance. Where an offeree fails to reply to an offer, his silence and inaction operate as an acceptance in the following cases only: (a) Offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation (b) Offeror has given offeree reason to understand that assent can be given by silence or inaction, and offeree intends his silence to be acceptance (c) Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept (Hobbs v. Massascoit Whip) - In some cases this includes goods

Answer 24

1) Each party must promise to confer a benefit or incur detriment 2) Promises must be part of a bargain

Answer 25

promise is bargained for if it is sought by the promisor in exchange for his promise and is given by the promisee in exchange for that promise. (conjunctive motives, the inducements occur on both sides means bargained for)

Answer 26

(a) an act other than a promise (a return promise or performative acceptance of an offer)(ex-DAHL v. HEM PHARMACEUTICALS CORP.), or (b) a forbearance (not acting) or (c) the creation, modification, or destruction of a legal relation. (ex- the ending of a lease) (4) The performance or return promise may be given to the promisor or to some other person. It may be given by the promisee or by some other person.

Answer 27

No. courts have been reluctant to hold people to promises of a gift

Answer 28

- Was the person making the promise (the promisor) trying to get something in return? - Could the person receiving the promise (promisee) do the condition without needing the gift?

Answer 29

1. Past acts dont count (sometimes) 2.Pre-existing duties don’t count 3. The value of consideration is irrelevant (sometimes)

Answer 30

Moral consideration

Answer 31

A promise made in recognition of a benefit previously received by the promisor from the promisee is binding to the extent necessary to prevent injustice However, a promise is not binding under subjection 1 a. If the promise conferred the benefit as a gift or for other reasons that the promisor has not been unjustly enriched or b. To the extent that its value is disproportionate to the benefit received by the promisor

Answer 32

A promise is enforceable even without new consideration when: – Conferred a material and substantial benefit. – And that benefit was personally received by promisor (Webb v. McGowin)

Answer 33

Doing something you’re already legally required to do is not valid consideration for a new promise — unless you do something extra or different that makes it clear a real bargain is happening

Answer 34

when a party agrees to perform an obligation for another to whom that obligation is already owed, although for lesser remuneration, the second agreement does not constitute a valid binding contract BUT the court finds for the plaintiff where the subsequent agreement imposes upon the one seeking greater compensation an additional obligation or burden not previously assumed, the agreement, supported by consideration, is valid and binding (if both sides give a little more or extra, then that is fine)

Answer 35

If a promise/performance is bargained for and entails a legal benefit or detriment, courts won’t inquire into the one-sidedness of the exchange, although some doctrines concern themselves with fairness with things like duress, misrepresentation, unconscionability

Answer 36

Grossly disproportionate consideration in the underlying transaction may play evidentiary role - Probative as to whether promise was bargained for

Answer 37

If the requirement of consideration is met, there is no additional requirement of (a) a gain, advantage, or benefit to the promisor or a loss, disadvantage, or detriment to the promisee; or (b) equivalence in the values exchanged; or (c) “mutuality of obligation.” But disparity in value with or without other circumstances sometimes indicates that the purported consideration was not in fact bargained for but was a mere formality or pretense, such a sham or nominal consideration does not satisfy the requirement

Answer 38

A sham is something that looks real on the surface, but isn’t real underneath. It’s pretending to be a genuine contract or agreement, but it wasn’t meant to be enforced by either party

Answer 39

(1) Specific performance or an injunction will be refused if such relief would be unfair because . . . (c) the exchange is grossly inadequate or the terms of the contract are otherwise unfair.

Answer 40

Ceremonial consideration (often invalid): A wants to give B her farm, but says, “Give me $1 so it’s a contract.” This is a gift, not a real bargain . Uncertain or Contingent Consideration (Usually Valid) 🛢️ Example: A says, “If you pay me $100 to drill for oil, I’ll give you 50% of the profits.” The value of what B is getting (50% of profits) is uncertain—maybe it’s worth a lot, maybe nothing. But the promise is real and bargained-for. Courts are okay with uncertain value, as long as the bargain itself is real Agreement to forbear from asserting legal claims that are later deemed to be invalid

Answer 41

option contracts

Answer 42

1) Traditional approach- the legal claim must be genuinely uncertain in fact/law, at time of execution of contract 2) Alternative approach- Either uncertainty in fact/law OR forbearing party had good faith belief in validity

Answer 43

(1) Forbearance to assert or the surrender of a claim or defense which proves to be invalid is not consideration unless a. The claim or defense is in fact doubtful because of uncertainty as to the facts or the law OR b. The forbearing or surrendering party believes that the claim or defense may be fairly determined to be valid

Answer 44

Doctrine that makes enforceable a definite promise that is not otherwise enforceable under contract law

Answer 45

A type of (or substitute for) consideration that perfects contractual rights Perfect contractual right- if all that is missing is bargain for consideration, then promissory estoppel can fill in/replace the bargain for consideration.

Answer 46

Used as an inferior plan B to life 1 when there’s no contract at all—just a promise and reliance. Usually gets limited remedies of reliance damages

Answer 47

For P.E. as a separate cause of action, the plaintiff must plead it separately in her complaint

Answer 48

When P.E. is used as a substitute for consideration, plaintiff has full contractual rights and is entitled to contract damages (this stuff is all on slides) For P.E. as a separate C/A, the remedy is “as justice requires”; in practice, courts tend to limit recovery to out-of-pocket reliance

Answer 49

1) A promise which the offeror – should reasonably expect to induce action or forbearance on the part of the promisee or a third person and – which does induce such action or forbearance – is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires

Answer 50

Equitable estoppel: prior disclosure or material concealment about a factual/legal matter can impair one from making a contract claim later

Answer 51

cases involving land transactions because of the reliance

Answer 52

An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.

Answer 53

A charitable subscription or a marriage settlement is binding under Subsection (1) without proof that the promise induced action or forbearance

Answer 54

Incapacity Duress Misrepresentation Unconscionability

Answer 55

The plaintiff does not have to prove that a contract is free from defects, But the defendant can raise “affirmative defenses” to argue that the contract shouldn’t be enforced because of some legal defect. and the burden falls on the defendant to prove those defects

Answer 56

Generally the contract is voidable, which means that the defendant can choose to affirm the contract or void it, but some types of defects result in void and not just voidable Voiding the contract usually results in restitution damages on both sides in favor of the party claiming the defect Facts creating the defect may also give rise to a tort claim

Answer 57

Allows for voidability of contract entered into by individuals who are * Mentally ill; * Intoxicated; * “Infants”; * Under guardianship

Answer 58

Whether mind was “so affected as to render him/her wholly and absolutely incompetent to comprehend and understand nature of transaction (allows avoidance of any contract)

Answer 59

Restatement Test (§ 15): Contractual duties voidable if by reason of mental illness/defect: Inability to understand in a reasonable manner nature and consequences of transaction, OR Inability to act in reasonable manner in relation to transaction & other party has reason to know of his condition BUT: when contract is on fair terms, and counterparty doesn‘t know about incapacity, power to avoid is terminated to extent that contract is not executory (i.e., prospective only) or circumstances have so changed that avoidance would be unjust

Answer 60

A person incurs only voidable contractual duties by entering into a transaction if the other party has reason to know that by reason of intoxication (a) he is unable to understand in a reasonable manner the nature and consequences of the transaction, or (b) he is unable to act in a reasonable manner in relation to the transaction

Answer 61

Unless a statute provides otherwise, a natural person has the capacity to incur only voidable contractual duties until the beginning of the day before the person’s eighteenth birthday

Answer 62

They can sue under quasi-contract (not true contract law) to get back the value of necessaries they provided

Answer 63

Restitution damages: Landlords give back the money the infants spent during the contract. If something is deemed necessary and the infants were enriched by that benefit, they must give back that benefit. Here, shelter wasn’t necessary because they had homes with their parents

Answer 64

Majority position says it does not matter if the minor lies, the landlord should do due diligence to find out the future tenants ages

Answer 65

1. An assertion that is not in accord with the facts 2. Receiving party’s assent must be induced by misrepresentation (to his/her detriment) 3. Receiving party must be justified in relying on the misrepresentation (the facts?) 4. Misrepresentation must be either material or fraudulent

Answer 66

Oral / written statements... – That communicate facts or opinions about facts; * Actions... – Constitute assertions if they’re “intended or known to prevent another from learning some fact * Silence: – General Rule: Silence ≠ assertion. * Prior assertions are / have become inaccurate * Other party mistaken about effect of a writing * Parties are in a relationship of “Trust & Confidence” * Other party mistaken, and failure to correct amounts to bad faith

Answer 67

Historically inducement meant that the misrepresentation had to be a but for cause of the transaction. Transaction is made only when the misrepresentation is present Recently courts have been more lenient; in most jurisdictions a statement induces assent if it substantially contributes to one’s decision to enter transaction (looks not at the reasonable person but the specific person)

Answer 68

Facts, General rule- if an assertion is that of an opinion, recipient cannot justifiably rely upon it, but one can justifiably rely on any asserted facts that form the basis of an opinion

Answer 69

The core determination is whether the statement purports to be based on some specialized or non-public knowledge Knowability vs. falsifiability- if its something you can either falsify or confirm, it is a fact We also look at the extent of knowledge that the person making that claim has in that subject matter, we can move it closer or further from a fact

Answer 70

General Rule: Except for obviously egregious cases, receiver is usually justified in relying, and need not investigate further; – (However: If receiver decides to investigate and does so improperly or negligently, courts may not be as charitable).

Answer 71

To the extent that an assertion is one of opinion only, the recipient is not justified in relying on it unless the recipient (a) stands in such a relation of trust and confidence to the person whose opinion is asserted that the recipient is reasonable in relying on it, or (b) reasonably believes that, as compared with himself, the person whose opinion is asserted has special skill, judgment or objectivity with respect to the subject matter, or (c) is for some other special reason particularly susceptible to a misrepresentation of the type involved

Answer 72

Likely to induce a reasonable person to manifest his assent OR the maker knows at the time she makes it that it would be likely to induce the recipient to do so The state of mind of the asserting party is irrelevant

Answer 73

The asserting party intends to induce assent AND they either know the assertion is not in accord with the facts does not have the confidence that she states/implies in the truth of the assertion knows that she does not have the basis that she states or implies for the assertion

Answer 74

Contract is voidable by the party claiming the defect, followed by restitution to both parties

Answer 75

- Contract is voidable/void as above - Party may bring action in tort for any additional out of pocket expenses + punitive damages - You need not void the contract to bring a tort claim

Answer 76

Victim knows they’re signing a contract, but is misled about key facts The contract is voidable

Answer 77

Victim is misled about the nature of the document itself (e.g., thinks it's a receipt, not a contract) Contract is void

Answer 78

Damages are limited because both parties got tricked

Answer 79

Physical duress Economic duress

Answer 80

If conduct that appears to be a manifestation of assent by a party who does not intend to engage in that conduct is physically compelled by duress, the conduct is not effective as a manifestation of assent Contract is void

Answer 81

Assent is induced by a threat to take some action that damages the assenting party in a financially disadvantageous way Leads to a voidable contract

Answer 82

1. Existence of a threat- a manifested intent to inflict economic harm on another 2. Threat must be improper 3. Must induce the receiver to manifest her assent 4. Threat must be sufficiently grave to manifest such assent, or leave receiver with no real alternative

Answer 83

Can be found with statements or actions

Answer 84

threatening an act that is illegal NOT threat to sue or threat to breach contract

Answer 85

threatening illegal acts NOT threat to sue unless it is a bad faith claim NOT threat to breach contract unless bad faith

Answer 86

(1) Resulting exchange appears one-sided, and (2) One of the following holds: – (a) the threat involves imposing a harm on the recipient with little benefit to the threatening party, – (b) prior unfair dealings with the threatening party significantly increase the effectiveness of the threat in inducing the manifestation of assent; or (c) what is threatened is otherwise a use of power for illegitimate ends

Answer 87

1. Whether you have adequately good recourse (How much power did the party claiming duress have under the circumstances) 2. Was there a reasonable alternative

Answer 88

Similar to material representation: Contract is voidable by the party claiming the defect followed by restitution to both parties

Answer 89

(1) Procedural unconscionability the absence of meaningful choice on the part of one of the parties to a contract (2) Substantive unconscionability contractual terms that are unreasonably favorable to the other party

Answer 90

Gross Inequality of Bargaining Power, Obvious Education or Lack of It, Did Both Parties Have a Reasonable Opportunity to Understand the Terms, and Were Important Terms Hidden or Minimized through sales tactics?

Answer 91

Whether terms of the contract, considered in light of general commercial background and commercial needs of particular trade and case, are manifestly one-sided

Answer 92

enforce the express terms.

Answer 93

Ask if the gaps are extreme. If yes, euthanize the patient (contract is unenforceable) If no, enforce with default terms (and courts will try to fill the gaps)

Answer 94

- 1. Transaction costs; complexity- You could plan for every possible contingency, but it may require more costs involved - 2. Linguistic limitations- a lack of definitional clarity - 3. Failures of foresight/cognition- because things have been successful in the past, not considering certain contingencies - 4. Strategic/opportunistic reasons- some people feel like the default rules are lurking in the background and they favor your client. There will be bickering over an expressed provision that favors your client, so you assume the gap filling that will occur will favor your client. This is risky and you really need to know the law, so most parties just bury terms

Answer 95

Two types of default rules: 1) Tailored rules- the judge tries to determine the best rule for these particular parties 2) Off the rack rules- apply a uniform rule to all parties whatever their specifics

Answer 96

Majoritarian default rules- judge fills in the contractual gaps the way that most people/ contracting parties probably would have filled them (ex- who is the highest valuer, the lowest-cost insurer, the lowest avoider of harm/risk?). They look at the conception of the contraction, what the parties would have done had they realized the gap

Answer 97

Penalty default rules (rare)- Fill in contractual gaps in a way that purposely diverges from how most people/contracting parties probably would have filled them to teach the parties a lesson. This incentivizes parties to bargain more completely over different contingencies ( to get the contract right the first time) (a more complete memorial). Called draconian gap filling

Answer 98

Every contract imposes upon each party a duty of good faith and fair dealing in its performance and enforcement

Answer 99

emphasizes faithfulness to an agreed common purpose and consistency with the justified expectations of the other party; it excludes a variety of types of conduct characterized as involving “bad faith” because they violate community standards of decency, fairness or reasonableness.

Answer 100

Some contracts give one party so much discretion (freedom to choose whether or not to perform) that it looks like they didn’t actually make a real promise—just an “I’ll do it if I feel like it.” That’s called an illusory promise, and it’s a problem because contracts need bargained-for consideration—both sides must give something up or make a commitment. - these deals have been saved by implying a duty of good faith and fair dealing to them

Answer 101

When a contract says the quantity will be based on either: The seller’s output (everything the seller produces), or The buyer’s requirements (everything the buyer needs), → then the actual amount delivered or demanded must be made in good faith. However, the party can’t suddenly demand or tender a quantity that is way off from: A number they previously estimated, or What they’ve normally produced or required in the past (if there’s no estimate).

Answer 102

An output contract is when the seller promises to sell all the goods they produce to the buyer, and a requirements contract is when the buyer promises to buy all the goods they need from the seller. These contracts don’t set a fixed quantity up front—they let the actual quantity be determined later, at the time of performance. Courts used to be suspicious of these contracts (because the quantity seems open-ended), but under modern law (UCC § 2-306), they’re enforceable as long as the parties act in good faith and don’t demand or deliver a quantity that’s unreasonably disproportionate to what was expected. (even in commercial settings)

Answer 103

When a seller and buyer enter into a lawful exclusive dealing agreement—meaning the seller agrees to sell only to that buyer, or the buyer agrees to buy only from that seller—the law automatically assumes that both sides must use their best efforts to make the deal work, unless they’ve agreed otherwise.

Answer 104

When court must interpret a term relating to a MATERIAL aspect of a contract, and - There is no subjective agreement by the parties as to its meaning and - Neither is actually aware of the other’s interpretation, and - There is no ascertainable OBJECTIVE meaning either - Then there was never a contract

Answer 105

When parties have attached the same meaning to a promise or agreement or a term thereof, it is interpreted in accordance with that meaning Where the parties have attached different meanings to a promise or agreement or a term thereof, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made - The party did not know of any different meaning attached by the other and the other party KNEW the meaning attached by the first party - The other party had no reason to know of any different meaning attached by the other and the other had reason to know the meaning attached by the first party. (3) Except as stats in this section, neither party is bound by the meaning attached by the other, even though the result may be failure of mutual assent

Answer 106

1. Look at the whole picture/the purpose of the contract is given great weight 2. All writings in the transaction are interpreted together 3. Words are given their ordinary meaning unless it's a technical term 4. If the contract has been performed the same way several times in the past, that is given great weight 5. Try to fit everything together

Answer 107

Try to read everything (written terms, past behavior, industry customs) in a way that they all fit together. But if they clash: express terms win over course of performance course of performance wins over course of dealings and usage of trade

Answer 108

A substantive rule of contract law that prohibits the admission of prior or contemporaneous oral or written statements that contradict, modify, or vary the terms of a final, integrated written agreement.

Answer 109

- Prior agreements between parties (oral or written) - Contemporaneous oral (but not written) agreements between the parties - - Sometimes includes evidence of course of performance, course of dealing, or usage of trade (UCC generally does treat such evidence as parole evidence)

Answer 110

contemporaneous written agreements subsequent oral or written agreements/renegotiated terms

Answer 111

Integrated writing- one that the parties intend to be a final expression of their agreement 1. Partial integrated- a writing intended to be final, but only as to central terms of the agreement - Parole evidence admissible to supplement these gaps if consistent with the document 2. Complete integration- a writing intended to be final as to all of the details of the agreement - Parole evidence is inadmissible for anything within the scope of the document - A merger clause tends to suggest that it is completely integrated

Answer 112

Not integrated- The writing is not intended to be final or complete. - Always admissible whether consistent or inconsistent with the document

Answer 113

It combines procedural rules of evidence with substantive law Default Rule in Contracts The PER is largely a default rule—parties can modify its application through contractual language. Example: Parties can include a merger clause to make the writing fully integrated. Or they can specifically allow certain outside terms to apply

Answer 114

Exceptions to PER: 1. Doesn’t apply to questions of interpretation (the standard is that the material is reasonably susceptible to the interpretation) 2. Doesn't apply to agreements (written or oral) made after execution of the writing 3. Doesn't apply to evidence of contract defects (etc, fraud, duress, mistake, incapacity) 4. Doesn't apply to evidence offered to establish an equitable remedy 5. Doesn't apply to collateral agreements 6. Doesn't apply to a contract subject to constructive conditions of exchange

Answer 115

if the term itself is reasonably susceptible to other interpretations, extrinsic evidence relevant to prove either of these meanings is admissible.

Answer 116

Judge Kozinski criticizes the idea that a "specter of ambiguity" (even a small amount) is often used by courts as a loophole to admit parol evidence. He argues that this undermines the certainty and reliability of written contracts, because: If even a slight hint of ambiguity is enough to admit outside evidence, then no contract is ever truly secure.

Answer 117

Express or implied risk allocation devices within contracts Seller effectively provides insurance to buyer against quality defects If product defective, seller will remunerate buyer (in whole or part) for shortfall

Answer 118

To be merchantable, goods must “Pass without objection” in trade & under context; AND Are “of fair or average quality” [fungible goods]; AND Are “fit for ordinary purposes for which such goods are used”

Answer 119

Plaintiff /buyer (or agent thereof) must prove that: 1. Buyer bought goods from Defendant / Seller 2. Defendant was a “merchant” under the UCC 3. Goods failed to be of “merchantable” quality. E.g.: * Would not pass without objection in trade / under context; OR * Are less than fair or average quality; OR * Aren’t fit for ordinary purposes for which they are used 4. Failure to comply w/ warranty caused plaintiff damage

Answer 120

A circumstance-triggered implied warranty that arises when: The seller has reason to know the particular purpose for which the goods are required, and The buyer relies on the seller’s skill or judgment to select or provide suitable goods. → In this case, the law implies a warranty that the goods will be fit for that specific purpose.

Answer 121

Buyer must prove that 1. Seller had reason to know the buyer’s purpose; 2. Seller had reason to know that the buyer was relying on the seller’s skill or judgment to furnish suitable goods; and 3. Buyer did in fact rely on the seller’s skill or judgment. 4. Failure to comply w/ warranty caused plaintiff damage

Answer 122

as is, with all faults

Answer 123

A part of interpretation doctrine that recognizes: Some promises are meant to be enforceable only if certain events (conditions) happen or don’t happen.

Answer 124

state of the world whose occurrence either extinguishes or brings to life a party’s duty to perform

Answer 125

condition that extinguishes duty

Answer 126

condition that brings duty to life

Answer 127

A contract is voidable for reason of mutual mistake, if, at time of contracting.. - A mistake is made by both parties - About a material fact inducing agreement - Which goes to the substance of the agreement rather than the mere quality

Answer 128

Modern Mutual Mistake Doctrine: 4 part test 1. Mistake by both parties at the time of contracting 2. Mistake involved a basic assumption of the contract 3. Mistake had a material effect on the transaction 4. Party asserting excuse did not otherwise bear the risk of mistake

Answer 129

1) Express allocation- risk is allocated to her by agreement of the parties 2) Conscious ignorance- Party is aware at the time the contract is made that she has only limited knowledge with respect to the facts to which the mistake relates but treats her limited knowledge as sufficient (Walker not checking to see if the cow is pregnant) 3) Policy considerations- risk is allocated to her by the court on the ground that it is reasonable in the circumstances to do so

Answer 130

- Party best able to bear risk - Party best able to avoid/control risk - Fariness/level playing field - Incentives

Answer 131

In a unilateral contract the disadvantage contract can void the contract (in mutual mistake both parties can)] Restitution will be given to each party Courts can use reliance if necessary to avoid injustice

Answer 132

No excuse available

Answer 133

There was a mistake by one party at the time of contracting; 2. It involved a “basic assumption” of the contract; 3. It had a material, adverse effect on mistaken party; 4. Mistaken party did not otherwise bear the “risk of mistake” under § 154 (same 3 alternative factors); 5. Plus: (a) Enforcement would be “unconscionable”, OR (b) Informed party had reason to know of mistake or mistake was his fault

Answer 134

Elements of impracticability: 1) Occurrence of supervening events makes performance impracticable (decision maker in modern cases) 2) Non-occurrence of the event was a basic assumption on which contract was made 3) Impracticability not the fault of the party seeking to excuse performance 4) Contractual language or circumstances indicate that the party seeking an excuse did not assume a greater obligation

Answer 135

Courts look at whether the risk was foreseeable at the time of contracting or whether the risk was within one party's control, as well as Risk-Bearing Capabilities, incentives, and Distributional Equity

Answer 136

It is an offset of the impossibility doctrine because the impossibility doctrine’s where there is a sudden decrease in value to the buyer

Answer 137

1) Supervening event that substantially frustrates a party’s purpose for contracting 2) Non-occurrence of the frustrating event was made a basic assumption on which the contract was made (basic assumption of both parties) 3) Frustrating event was not the fault of the party seeking to excuse performance 4) Contractual language or circumstances indicates that the party seeking an excuse did not assume a “greater obligation”

Answer 138

Usually discharges all remaining duties of both parties, minus some exceptions, and restitution damages are given to both parties

Answer 139

Promises: ̈ Obligations that aren’t contingent on any other contingency or action n Conditions: ̈ Obligations that are contingent on something else happening / not happening (including, possibly, someone else’s actions

Answer 140

Condition Precedent: A contingency that must occur before one’s obligation matures into a “promise” Condition Subsequent: A contingency that, if/when it occurs, extinguishes someone’s existing obligations Failure of a promise entitles one to damages; doesn’t excuse her duties ̈ Occurrence of cond. subsequent / non-occurrence of cond. precedent excuses one’s duties, but doesn’t generally allow for damages

Answer 141

No, they are a matter of interpretation

Answer 142

1. canons and rules of interpretation 2. conditions must be strictly satisfied 3.Burden of Proof Depends on Type of Condition Condition Precedent: Burden on the party alleging breach (must prove the condition occurred). Condition Subsequent: Burden on the party seeking excuse (must prove the condition occurred and excused them)

Answer 143

Complete performance and sue later

Answer 144

if cure possible/compensation adequate, it is a material breach

Answer 145

Aggrieved party is allowed to suspend performance until the cure happens and then complete the performance and sue later (any breach is available for breaches less than that)

Answer 146

The aggrieved party can cease performance and cover + sue. Can also cancel the contract and seek restitution damages, or treat it as if it were a material breach. The caveat to that is the avoid ability doctrine

Answer 147

1. Extent to Which the Injured Party Is Deprived of the Benefit they reasonably expected 2.Can the injured party be adequately compensated for this loss? 3. Likelihood of Forfeiture (by breaching party) 4. Likelihood of cure 5. Did the breaching party act in Good Faith and Fair Dealing

Answer 148

If one party repudiates her duties under contract in advance of her performance - And if breach- if consummated- would be material/total - Then it functions like a material/total breach at the time of repudiation - The other party may undertake any of the actions afforded as if she had waited for the material/total breach

Answer 149

any non-conforming performance constitutes a material breach, breaching party generous rights to “cure” her breach within reasonable time before it becomes a total breach

Answer 150

An exception to the idea that contracts do not require a written memorial by specifying that certain agreements must be in writing and signed by the party against whom enforcement is sought.

Answer 151

To try and simply the evidentiary process.

Answer 152

(a) a contract of an executor or administrator to answer for a duty of his decedent (the executor-administrator provision); (b) a contract to answer for the duty of another (the suretyship provision); (c) a contract made upon consideration of marriage (the marriage provision); (d) a contract for the sale of an interest in land (the land contract provision); (e) a contract that is not to be performed within one year from the making thereof (the one-year provision)

Answer 153

A contract for the sale of goods for the price of $500 or more is not enforceable…unless there is some writing sufficient to indicate that a contract for sale has been made between the parties and signed by the party against whom enforcement is sought Exceptions to this UCC: 1) Specially manufactured goods 2) Admission in pleadings or testimony that an agreement was reached 3) Goods already received/accepted or payment already made/accepted

Answer 154

1. promise to buy land 2. promise to transfer land 3. once land has been transferred, promise to pay does not need to be in writing 4. exception: leases under 1 year do not need to be in writing

Answer 155

A promise that the promisor should reasonably expect to induce reliance (action or forbearance), and that does induce such reliance, is enforceable even if it violates the Statute of Frauds—if enforcement is the only way to avoid injustice 2) Factors to Determine If Injustice Can Be Avoided Only by Enforcement: a. Availability and adequacy of other remedies b. Definiteness and substance of the reliance c. Reliance as evidence of the promise d. Reasonableness of the reliance e. Foreseeability

Answer 156

a contract within the Statute of Frauds is enforceable if it is evidenced by any writing, signed by or on behalf of the party to be charged, which (a) reasonably identifies the subject matter of the contract, (b) is sufficient to indicate that a contract with respect thereto has been made between the parties or offered by the signer to the other party, and (c) states with reasonable certainty the essential terms of the unperformed promises in the contract

Answer 157

. Signature of party against whom enforcement is sought, 2. Some writing sufficient to indicate that contract for sale of goods has been made between parties, AND 3. Specification of quantity of goods sold.

Formation, Offer and Acceptance, etc Flashcards

(189 cards)