Contracts Anzivino Marquette Law

What are the two types of contracts?

bilateral and unilateral

What is a bilateral contract?

promise for a promise

What are the three methods of acceptance for bilateral contract?

Exclusive "shall"
Suggested "may" or "might"
No method stated

2 significances of bilateral no method stated?

contract can be accepted through any reasonable method & notice of acceptance is required

What is a unilateral contract?

promise for completed act

What are the two ways a contract can be formed?

express and implied in fact

What is an express contract?

parties expressly laid out terms of contract and agreed upon

What is an implied in fact contract?

when acceptance of an offer is inferred from a person's conduct

What is the objective test?

a parties outward manifestations and how a reasonable person would interpret

What are the southworth elements and their purpose?

objective test to determine if an offer was made; context, language, specificity (number of receivers), definiteness of terms

Is merely inquiring about interest in purchasing an offer to sell?

no

When can an ad constitute an offer?

clear and definitive language of commitment or some invitation to take action w/o further communication

When can a contract exist for private rewards?

Person knew of the offer of reward and acted w/ intention of accepting offer

under what circumstances may silence constitute acceptance?

prior course of dealing, course of performance, trade practice, or if the parties agree in advance that one party's act constitutes acceptance

What is the mailbox/dispatch rule?

Default rule for bilateral contract; moment of acceptance occurs when offeree loses control of item; if mail not received the burden is on the offeror

How can an offer be terminated?

Rejection/counteroffer, revocation, death or incapacity, nonoccurrence of any condition of acceptance

What is the mirror image rule?

offer imposes no obligations unless accepted per its exact terms; if not, then it is a counteroffer

Is inquiry "would you accept" a counteroffer?

no

How does revocation occur?

direct, indirect, or lapse of time

What is indirect revocation?

offeree learns of revocation through 3rd party

How can you make an offer irrevocable?

Partial performance (unilateral), reliance (unilateral and bilateral, or pay consideration

If an original offer is supported by consideration does a counteroffer constitute a rejection?

no

How are crawlers and spiders treated?

As agents of sender; they agree to terms and bind sender

What is inquiry notice?

should have inquired further due to having enough facts before you

What is constructive notice?

it's in your possession but you don't bother to read

What are three types of notice?

Actual, inquiry, constructive

What are the formation defenses?

Ambiguity
Duress/undue influence
Unconscionability
Vagueness
Indefiniteness
Public policy
Mistake

What are the two types of ambiguity?

Equal and regular ambiguity

What is equal ambiguity (Peerless)?

court can't choose between the two meanings and contract invalid

What is regular ambiguity?

court decides between two meanings using plain meaning rule or context rule

What is plain meaning rule for ambiguity?

court applies ordinary meaning of word and no extrinsic evidence allowed

What is context rule ambiguity?

language - look for meaning in contract
course of performance
course of dealing
trade practice

Which approach does WI use for regular ambiguity?

Context

Difference between vagueness and indefiniteness?

Vagueness is to terms and indefiniteness is to conduct for formation of contract

What are the four types of vagueness?

many interpretations of word/phrase
agreement to agree
agreement in principle
missing terms

What is agreement to agree?

material term is left for future negotiation and contract is unenforceable unless parties give some mechanism by which they may use to come to agreement

What is agreement in principle?

letters of intent are not enforceable unless agreement on all material terms

Will a court fill in a missing term in a contract?

yes by application of prior course of dealing, course of performance, or trade practice (actor case)

What is the definiteness requirement?

parties must agree on all essential terms and conditions for contract to be enforceable

What is accord and satisfaction?

a defense to recovery motion by plaintiff; parties in dispute over amount due or liability; to resolve send check for amount somewhere in between "please accept payment in full"; if check cashed then settled

What are the alternative recovery theories for when a contract fails?

promissory estoppel
quantum meruit
quasi contract
moral obligation

Elements of promissory estoppel?

Promise
Foreseeable reliance
Substantial reliance
Injustice

What is quantum meruit?

Promise for services rendered

Elements of quantum meruit?

Failed k
Benefit conferred
Without compensation

What is quasi contract/unjust enrichment?

Created by the courts where a party received a benefit and retaining the benefit without payment would be unjust

Elements of quasi contract?

No prior contract
No promise for anything
Benefit conferred
No officious conduct
Benefit accepted and retained

What is officious conduct?

conferring a benefit without asking

What are the three excuses for officious conduct?

Emergency
Mistake
Any other reasonable excuse

What is moral obligation?

promise made in recognition of previously received benefit and is binding to prevent injustice; benefit must be material and substantial

When is moral obligation not binding?

if benefit conferred as gift or promisor has not been unjustly enriched

What are the two types of unconscionability?

procedural-unequal bargaining power
substantive-terms so unreasonable they shock conscious of the court

What are the remedies for unconscionabiliity?

contract is struck down or parts of contract are upheld and others excluded

What are two theories of consideration?

benefit-detriment and bargained for

Which theory does WI use for consideration?

bargained for and given in exchange

What is the bargain theory of consideration?

performance/return promise is sought by promisor in exchange for promise; given in exchange-this for that; mutual benefit to both parties

What are the two types of consideration?

Peppercorn theory and greater than nominal

What is the peppercorn theory? (WI)

as long as it's worth more than a peppercorn there is C

What is the greater than nominal theory?

has to be greater than a dollar

Are past services sufficient consideration?

no

Is surrender of a doubtful claim sufficient consideration?

yes

Can a gratuitous promise constitute consideration?

no (sister antillico)

Does a court care about adequacy of consideration?

no they don't care if you made a bad deal

Describe cohabitation claims

one party claims unjust enrichment when two people work together to acquire property through the efforts of both, regardless of personal relationship

What is an adhesion contract?

take it or leave it contract

When is an adhesion contract not enforceable?

provision doesn't fall within reasonable expectations of weaker party or is unduly oppressive or unconscionable

What is the pre-existing duty rule?

promise to do something you're already legally entitled to do or to refrain from something not legally privileged to do is not consideration

What is the traditional approach to contract modification?

voluntary, new peppercorns (consideration)

What is the modern approach to contract modification?

voluntary
made before contract fully performed by both parties
unanticipated circumstances brought change
fair and equitable (garbage co. needing more money bc large increase in dwellings)

What is the statute of frauds?

requires that certain types of contracts be in writing with some form of authentication

What contracts are covered by statute of frauds?

surety ship (answer for debt of another)
real estate
contracts longer than 1 year
sale of goods

What is the real estate exception?

if a contract is covered by statute of frauds and not in writing, partial performance can authenticate is as a real transaction

What is the performable exception?

if there is a possibility that a contract can be completed in under a year then it is not covered by statute

What is the one side rule?

if one party fully performs their side of the contract within a year than state does not apply

What are void contracts?

not going to be enforced at all

What are voidable contracts?

contract is valid but may become unenforceable if there is duress, undue influence, or incapacity

What are unenforceable contracts?

contract that is valid but court will not enforce due to statute of frauds, etc.

What factors affect capacity to contract?

Infancy, intoxication, or mental defect

When is a minor's contract enforceable?

for necessities and they are liable for reasonable value not what contract says

When a minor disavows a contract do they have to pay for items or return them?

no requirement for paying restitution even if damaged item

What is the WI rule for minor's misrepresentation of age?

minor can get out of contract but must pay damages

What are other rules for minor's misrepresentation of age?

Minors not liable for deceit arising from misrepresentation
or estoppel and minor is stuck with contract

What is a mutual mistake?

if both parties were mistaken as to a material fact at the time of contracting, the contract is voidable by adversely affected party unless he bears the risk

What is a unilateral mistake?

A mistake that occurs when one party to a contract is mistaken as to a material fact, the contract is voidable by him unless he bears the risk

When does a party bear the risk of a mistake?

(a) the risk is allocated to him by agreement of the parties, or
(b) he is aware, at the time the contract is made, that he has only limited knowledge with respect to the facts to which the mistake relates but treats his limited knowledge as sufficient, or
(c) the risk is allocated to him by the court on the ground that it is reasonable in the circumstances to do so (trade practice, beyond ordinary negligence)

When a mistake is made in the transmission of an offer, who bears the risk?

the party that chose the method of transmission is liable but may seek indemnification from transmitter for mistake (western U)

What is misrepresentation?

when a party's assent is induced by either fraudulent or material misrepresentation and they are justified in relying on that info., the contract is voidable

What is affirmative misrepresentation?

fraud, negligent, innocent

Nondisclosure of a fact is an assertion the fact doesn't exist when...

1.disclosure is necessary to prevent a previous assertion from being untrue
2.where disclosure of the fact would correct a mistake of the other party as to a basic assumption on which the party is making the k
3.where disclosure of the fact would correct a mistake of the other party as to the contents or effect of a writing
4.where other person is entitled to know the fact because of relationship of trust between them

Rule for extrinsic facts?

duty to disclose depends on whether other party has access to same information

Rule for intrinsic facts?

duty to disclose things that a reasonable buyer would be impacted by

What is duress?

the use of threats to force a party to enter into a contract

What is undue influence?

persuasion that is less than actual force but more than advice and that induces a person to act according to the will of the dominating party.

Rule for public policy?

court will not knowingly aid in the furtherance of an illegal transaction or one that violates public policy

What is an exculpatory clause?

a contract provision that attempts to release one party from liability in the event the other is injured (generally disfavored)

What is WI rule for exculpatory clauses?

must specify all inherent things that might happen; can only exculpate for negligence

Factors to determine if exculpatory clause is enforceable?

1.does is cover activity in Q?
2.no misrepresentation
3.opportunity to bargain

What are the three approaches for covenant not to compete?

Blue pencil rule
Strike unreasonable and rewrite
Not enforceable

What is the blue pencil rule?

court strikes unreasonable stuff and keeps stuff that works

What is the WI rule for covenant not to compete?

if it is overbroad and unconscionable then not enforceable

What does covenant not to compete require in order to be enforceable in WI?

Time-less than 5 years is reasonable
Geography-whole state unreasonable
Scope-roles/duties barred from not "similar services"