NEW Contracts Midterm

what does a contract require?

mutual assent & consideration

what is mutual assent?

offer & acceptance

what constitutes a valid offer?

(1) manifestation of willingness to enter into a bargain

(2) with terms of the contract laid out with reasonable clarity

(3) that will justify another party’s understanding that their assent/agreement is

(3a) invited

(3b) will conclude the offer & make it a contract

what constitutes a valid acceptance?

(1) must show agreement through the manner of either;

(1a) words

(1b) conduct

(1c) performance

(2) if a specific manner is requested, agreement must be done that way

consideration

bargain theory of return promises where each promise induces the other’s, and the promises don’t account for the past

what separates a condition of a promise from consideration for a promise?

a condition is not specifically requested by the offeror as the return promise that will allow an offeree to receive what they were promised

merchant’s firm offer (UCC § 2-205)

a promise to hold an offer open that doesn’t require consideration that;

(1) must be written & signed by a merchant

(2) lasts 3 months if there’s no specified timeframe set for it
(3) can’t be revoked

option contract

promise to hold an offer open that can’t be revoked

what fundamentally separates a unilateral contract from a bilateral contract?

in a unilateral contract, the offeree is asked specifically for the performance in order to receive a good/service; in a bilateral contract, the offeree is asked specifically for the promise in exchange for another one

C asks for B’s performance to paint a house for $2,000 and B agrees and starts, then stops halfway through. C thinks B did something wrong. what actually happened?

B didn’t breach

C asks for B’s performance to paint a house for $2,000 and B agrees and starts. C then changes his mind and says he won’t pay it, even though B is already halfway through. B thinks C did something wrong. what actually happened?

under Restatements (Second) of Contracts § 45, C created an option contract and therefore is not allowed to revoke.

C asks for B’s promise to paint a house for $2,000 in a day from now and B agrees. the next day comes and B decides not to paint it. C thinks B did something wrong. what actually happened?

B is in breach of contract

C asks for B’s promise to paint a house for $2,000 in a day from now and B agrees. after a while, C changes his mind and says he won’t pay B no matter what he does. B thinks C did something wrong. what actually happened?

C is in breach of contract (anticipatory repudiation)

promissory estoppel

Restatements (Second) of Contracts § 90

(1) there must be a promise

(2) promisor should reasonably expect that the promise will induce upon the promisee forbearance or reasonable reliance

(3) the promisee actually forbears & relies on the promise

(4) injustice can only be avoided by the enforcement of the promise by the promising party
consideration need not be required for it; this serves as a substitute when it’s missing

if a contract is required to be in writing under the Statute of Frauds, what does it have to include?

(1) a writing evidencing the deal

(2) expressly stated essential/material terms of the agreement with reasonable certainty

(3) signature by the party to be charged (AKA the person being pressured to fulfill the contract)

for goods, what kind of term is required alongside expressly stated terms of an agreement under the Statute of Frauds?

quantity term; UCC § 2-201

under the Statute of Frauds, what types of contracts are required to be in writing?

(1) contracts where marriage is being used as consideration

(2) contracts that can’t be performed within a year

(3) contracts involving land/real estate transactions

(4) contracts involving executor promises, where one pays a deceased person’s debt

(5) contracts involving goods that exceed $500

(6) contracts involving suretyships, where one pays a living person’s debt

what important caveat exists regarding the one-year requirement in the Statute of Frauds?

promises “for life“ that COULD extend past one year don’t count because a person can always die within a year of the contract’s formation

unjust enrichment

(1) a benefit is conferred (a benefit is given to someone)

(2) knowledge and appreciation (the person knows the benefit is given to them)

(3) inequitable retention (it is unfair for the person to keep the benefit without payment/restitution/consideration)

quasi-contract (implied-in-law contract)

used to enforce restitution when one party is unjustly enriched

emergency/necessity exception to unjust enrichment

Restatements (Third) of Restitution § 20

if these are true, performing party is entitled to restitution;

(1) must supply valuable life/property-saving care to another

(2) the care was necessary for the protection of another’s life/health

B paints C’s house out of nowhere, thinking it’s A’s house. C says nothing and just accepts the benefit. when B is done, C doesn’t pay for it. what actually happened?

C was unjustly enriched and must pay the full amount in a quasi-contract

C goes on vacation. B decides to paint C’s home despite not being asked to. C comes back home to the new paint job, and B demands payment from C. C thinks B did something wrong. what actually happened?

C doesn’t have to pay; B was an officious intermeddler

C goes on vacation. B decides to paint C’s home despite not being asked to. C comes back home to the new paint job and loves it, promising that he would pay B next week for it. later, C changes his mind. B thinks C did something wrong. what actually happened?

under Restatements (Second) of Contracts § 86, C made an express promise in recognition of the material benefit and therefore must pay to prevent injustice

C suddenly collapses, and B notices. B calls an ambulance, and the doctors operate on C and bring him back to life. C then receives the medical bill. C thinks B did something wrong. what actually happened?

C is required to pay under the emergency exception to unjust enrichment

under the terms of the drennan rule, when does an offer not yet accepted become irrevocable as an option contract?

(1) if the offeror should expect the offer to induce action or forbearance before acceptance

(2) if the offeree actually and reasonably relies on their offer to their substantial detriment

Restatement (Second) of Contracts § 87(2)