R6 BLAW Flashcards
(47 cards)
Contract
promise that the law will enforce
express contract
formed by language, oral or written
implied-in-fact contract
formed by conduct
implied-in-law contract/ quasi-contract
not a contract
- it is a remedy allowing a plaintiff to recover a benefit unjustly conferred upon the defendant to prevent unjust enrichment
Unilateral contract
1 promise in exchange for performance
- contract isn’t formed until performance is completed
Bilateral Contract
2 promises- promise in exchange for a promise
- contract is formed as soon as promises are exchanged
Executory Contract
if duties remain to be performed under contract
Executed Contract
all duties under the contract have been performed
Sources of Contract Law
Common Law
- RISE: real estate, insurance, services, and employment
Uniform Commercial Code (UCC)
- governs contract for sale of goods
3 requirements for Legally Enforceable Contract
- offer and an acceptance
- exchange of consideration (something of legal value)
- lack of defenses
-note: doesn’t have to be in writing except for exceptions
What makes an Offer?
- was there intent?
- obvious joke is not an offer
- advertisements GR not offers except: ads that limit scope of persons who can accept
- rewards in offer is okay - are terms definite and certain?
- RISE: all terms
- UCC: quantity - was there communication to offeree?
- no knowledge, no acceptance
Termination of Offer
an offer must be accepted before it is terminated
- Revocation by Offeror
- GR: offeror can revoke any time before acceptance by communicating revocation to offeree
- even when offeror promises to keep offer open
- may be direct or indirect
- if offer is published, revocation must be published through comparable means
Limits on revocation: - Option Contract- consideration paid to keep offer open
- Unilateral Contract- substantial start on unilateral contract
- Firm Offers
- Rejection by Offeree
- once offer is rejected, it can’t be accepted
- counteroffer is both a rejection and an offer
- note: diff b/w mere question and counteroffer
- effective when received
- no response is a rejection - Termination by Law
- termination by death or incompetency of parties automatically
- destruction of subject matter before offer is accepted
- illegality
The Acceptance
- only person whom offer was made may accept
- GR: acceptance can be anything reasonable except: if offeror specializes method of communication
- RISE follows Mirror Image Rule, requiring acceptance to mirror the offer (a change is a counteroffer)
- Mailbox Rule: acceptance are effective when dispatched and irrelevant if properly addressed acceptance is lost or delayed unless specified otherwise
- vs offers and terminations and counteroffers effective date received
Consideration
both sides of contract must be supported by legal consideration. 2 elements of consideration
- legal value given by each party
- consideration if promisee agrees to do something they are not already obligated to do
- e.g. if job or under contract and offer to pay for them to do their job, don’t have to pay - bargained for exchange
- not consideration unless given in exchange for consideration
- gifts are unenforceable bc no exchange
- if something has already been given/done, it’s unenforceable
- exception: detrimental reliance/promissory estoppel (donation to charity)
Defenses
most tested area for contracts
make a contract unenforceable
note: most defenses only make voidable, few make void
Fraud “MAIDS”
- misrepresentation of material fact
- actual and reasonable reliance
- intent to induce victim to rely
- damages
- scienter, knew falsity or reckless disregard
if no scienter, no punitive damage just cancellation
- fraud in the execution: void
- fraud in the inducement: voidable
- physical force duress: void
- economic or social duress: voidable
- undue influence: abuse of position of trust or confidence
- mutual mistake
- nonexistence when contract is made: void (stolen/destroyed)
- unilateral mistake GR not defense UNLESS other party knew or should have known of the mistake
- illegality: void
- no license to “protect the public”: void
- no license to “raise revenue”: enforceable
- minors can cancel contracts while minor or reasonable time after becoming adult unless for necessities, can ratify upon reaching adulthood
- intoxication
- mental incompetency: voidable
- adjudicated mentally incompetent: void
- Statute of Limitation*
- Statute of Frauds- 6 contracts in writing*
- impossibility
- Accord and satisfaction
- Novation
- prevention of performance
- Parol Evidence Rule*
- unconscionability: extremely unfair
Statute of Limitations
Contracts
if statute of limitations has expired, it is unenforceable
- RISE: 4-6 years
- UCC: 4 years
- from date of breach
Statute of Frauds- 6 Contracts Requiring Writing
signed by defendant "MYLEGS" - Marriage - multiYears: can't be performed w/i a year from contract date - Land/real property unless lease is less than a year or partially performed - Executors to pay estate debts - Goods sale $500+ - Surety: pay debt of another
Accord and Satisfaction
same parties, new agreement
Novation
same agreement, substituted parties
- all parties must agree to release
Parol Evidence Rule
prohibits:
- party in a lawsuit w a fully integrated written contract from introducing evidence at trial of:
- oral/written statements prior to written contract or
- oral/written statements made contemporaneously w written contract that seek to vary terms of contract
Remedies
Breach “RISE”
- nonbreaching party discharged
- if only minor breach, not discharged just damages
- Anticipatory Repudiation: immediately sue for damages, await time for performance then sue, or cancel contract
Damages
- put nonbreaching party in as good a position had there been no breach (no punitive damages)
Money: to obtain substitute performance and reasonably forseeable
Specific Performance: land or unique items
- SP can’t be used for personal service contracts
- either money or specific performance, not both
Liquidated Damages: agreed to in contract for breach is enforceable if reasonable amount and NOT A PENALTY
Rescission or Cancellation
- UCC requires “perfect tender” so can cancel for breach
- RISE can’t cancel if substantially performed (only monetary damages for minor breach)
Quasi-Contract Damages
- return stuff already exchanged if contract doesn’t happen
Third Party Rights
GR: only parties in privity have rights EXCEPT intended third party beneficiaries
- must be named or specifically described in contract
Intended Beneficiaries
- Donee Beneficiary: gift
- Creditor Beneficiary: bc they were owed
Assignment of Rights and Delegation of Duties
Assignment of Rights: give contract rights to third party
Delegation of Duties: third party perform contractual duties
Assignment of a contract is both
Exceptions: assignment will change the obligor’s risk OR duty involves specialized personal services
- both delegator and delegatee liable unless novation
- creditors right to receive money is assignable to another even if contract prohibits assignment, effective when debtor receives notice
- more R6-27
Firm Offer*
Sales Article of UCC
GR: offers are revocable before acceptance EXCEPT options
Firm Offer is irrevocable:
- seller must be a merchant
- offer in writing and signed by merchant
- offer gives assurances it will be kept open for certain time
- irrevocable for time stated or 3 months