Contract Law

example of a condition precedent

Dick and Jane enter an agreement whereby Dick agrees to purchase Jane's home subject to the sale of Dick's current residence.

A contract is generally enforceable when there is a valid offer, there is a valid acceptance, and the agreement is supported by the mutuality of assent.

False

A newspaper advertisement generally is treated as an offer to members of the public.

False

Boarding a bus and putting money in the slot without saying anything is a type of quasi contract

False

In certain circumstances, the U.C.C. may be applied to real estate transactions.

False

In general, the U.C.C. requires contracts for the sale of goods valued in excess of $250 to be in writing to be enforceable.

False

termination by operation of law

If either party dies or is adjudged insane or incompetent prior to acceptance, the offer is terminated.

Matthew and Angela enter into a written agreement which provides, "Angela will purchase a parcel of land for $8,000 or less from Matthew."

This agreement is NOT enforceable.

A contract is voidable by one party for lack of capacity due to intoxication and if that party later performs a portion of the contract while sober, the contract is no longer voidable.

True

As a general rule, only a non-breaching party may recover contract damages.

True

Contracts for the sale of land must be in writing to be enforceable.

True

The difference between a bilateral contract and a unilateral contract is the number of promises exchanged by the parties.

True

Under the U.C.C., if a merchant offeree adds terms to an offer before acceptance, the new terms will become part of the contract unless the offeror objects within a reasonable time.

True

U.C.C.

Uniform Commercial Code

consideration

a bargained for exchange (change in position) between the parties that must provide some benefit to the promisor or must provide some detriment to the promisee.

material breach

a breach is this if the promisee does not receive the substantial benefit of her bargain as a result of the promisor's failure to perform or as a result of the promisor's defective performance.

minor breach

a breach is this if the promisee receives the substantial benefit of her bargain despite the promisor's defective performance.

implied contract

a contract formed by an indication of assent other than specific words, such as by conduct. Sometime called a contract "implied in fact."

express contract

a contract formed by specific words, either oral or written.

executed contract

a contract in which all parties have fully performed their obligations and duties under the contract terms.

voidable contract

a contract in which one or both parties may choose to avoid or may ratify

executory contract

a contract in which some obligation or duty remains to be done by one or more of the parties

unenforceable contract

a contract that cannot be enforced because of defenses to the contract, none of which relate to its formation.

acceptance

a manifestation of assent to the terms of an offer, given in the manner prescribed or permitted by the offer.

void contract

a misnomer, an agreement that had no legal effect and was invalid from the start.

unilateral mistake

a mistake that is made by only one of the parties to the agreement

consequential damages

a plaintiff can recover this in addition to compensatory damages as a consequence of the breach

contract

a single promise or a set of mutual promises, the performance of which is recognized as a legal duty and breach of which will result in a remedy granted to the nonbreaching party.

revocation

a termination of offer before acceptance has occurred

example of a binding contract

a woman, who is going to Europe for two years, contracts for the care of her car while she is gone. She agrees in writing to pay a man $500 to wax the car once every four months during her absence.

mutual assent

aka meeting of the minds or intent to contract. Requires both offer and acceptance

compensatory damages

are awarded to a plaintiff to put her where she would have been if the contract had been performed by the other party

punitive damages

are designed to punish or to penalize the defendant for bad conduct above and beyond a simple breach of contract

liquidated damages

are those damages agreed upon by the parties at the time the contract is formed.

bilateral contract

consists of a promise given in exchange for a promise.

unilateral contract

consists of a single promise made by the offeror to the offeree, which seeks performance from the offeree rather than the promise of performance.

An offer

creates a power of acceptance in the offeree and a corresponding liability on the part of the offeror.

the contract provision for pre-inspection payment

does not impair the buyer's right of inspection or his remedies

requirement contract

ex: a promise to buy all that I require

output contract

ex: a promise to sell all that I produce

a delegation

generally requires the express consent of all parties

assignment

is what one should execute if one wishes to transfer his or her rights under a valid contract

nominal damages

may be awarded when the defendant has breached the contract but no monetary loss is proved.

parts of an offer

must be an objective expression of a promise, undertaking, or commitment to enter into a contract; terms must definite and certain; the offer must communicated to the offeree.

contracts for sales of land

must be in writing to be enforceable

an option contract

must be supported by consideration

mutual mistake

occurs when both parties are mistaken about a past or present material fact relating to the agreement

breach of contract

occurs when: 1. a promisor is under an absolute duty to perform and when 2. the duty of performance has not been discharged

restitution damages focus

on what the defendant gained from the plaintiff

compensatory damages focus

on what the plaintiff lost

Third-party beneficiary contract

one in which a third party is intended to receive the benefits of a contract created by someone else.

a general rule

only a non-breaching party may recover contract damages

difference between fraud and misrepresentation

scienter and type of damages

nudum pactum

term used to refer to a mere promise, sometimes called a bare promise, that (standing alone) cannot be enforced by the court

rejection

terminating an offer by simply not accepting it at all

lapse of time

termination of an offer by not reply within a reasonable amount of time

promissory estoppel

the claim must show that 1. the promisor reasonably should have expected to induce action or forbearance on the part of the promisee 2. of definite and substantial character 3. the action or forbearance occurs

bill of sale

the document used to transfer legal ownership of personal property from one person to another when a title document is not required

adhesion contract

those that contain unconscionable provisions concerning procurement of necessary goods, when the buyer is unable to purchase similar items from any seller without agreeing to a similar provision.

mistake in transmission

when a mistake is made by an intermediary in the transmission of an offer or in the acceptance, the party chose the intermediary generally bears the risk of the mistake

parts of a contract

1. existence of mutual assent 2. existence of consideration 3. absence of defenses that would prevent enforcement of the contract terms

requirements of a written contract

1. identity of the parties 2. identity of the subject matter 3. a writing 'sufficient to indicate' that a contract was formed

Contract defenses

1. Lack of Capacity 2. Lack of Consent 3. Mistake 4. Illegality 5. Unconscionability

substitutes for consideration

1. Promise Under Seal 2. Promises in Writing 3. Promises to Pay Obligations Barred by Law 4. Promissory Estoppel