Contract ---Issued Based on FYLS Apperances

Governing Law - Common Law [Does the common law govern any contract between X, Y, or Z?]

1. All other contracts

2. governs contracts for services, real estate, employment, insurance, and other transactions that are not predominantly for the sale of goods

Governing Law -  UCC [Does the UCC govern any contract between X, Y, or Z?]

UCC governs contracts for the sale of goods, which are defined as tangible, movable chattel that is identifiable at the time of contract formation. 

Offer [Did X make a valid offer to Y?]

An outward manifestation of present contractual intent which has certain and definite terms and is communicated to the offeree.

1. Q=Quantity 

2. T=Time

3. I= Identity of Partie

4. P= Price

5. S= Subject Matter

Acceptance [Did X accept Y Offer?] 

An acceptance is an unequivocal assent to the terms of an offer.

Consideration [Was there valid consideration?] 

That which is bargained for and given in exchange for a promise. 

Contract Formation - General [​​Does X have an enforceable obligation to Y?]

An enforceable obligation will exist where a valid contract is found. This requires offer, acceptance, and consideration. 

Performance

when a party fulfills the contractual duties required under the agreement. A material failure to perform constitutes a breach.

Tender

1. an unconditional offer to perform coupled with the present ability and willingness to perform. 

2. When promises are concurrent, one party generally cannot place the other in breach unless he has first made a valid tender of his own performance.

Statute of Frauds [ Does the State of Frauds apply?] 

A contract involving [insert one of the five choices] must be signed in writing by the defendant to be enforced. 

1. A contact which by its terms cannot be performed within one year from the making thereof

   1. One Year. Cannot be performed in less than a year 

2. A promise to answer for the debt or default of another

   1. Two D's: Debt or Default 

3. A promise in consideration of marriage

   1. Third Finger [Ring Finger] 

4. A contract involving an interest in real properly &

   1. Four Corners of a Property 

5. Under the UCC, a contract for the sale of goods priced $500 or more 

   1. Five Hundred Dollars 

Remedies - Expectation Damages

1. Where possible, the court will award compensatory damages according to the calculation of what the plaintiff expected to receive from performance of the contract 

2. What did you expect to receive? What will it take to get me to what i expected

Conditions

1. A condition is an act or event which affects a contractual duty to render a performance. 

2. A condition may be expressed or implied, and may be a condition precedent, a condition concurrent, or a condition subsequent. 

3. A condition is when there is a duty perform arises

4. A Condition is a provision in the contract either expressed or implied that will have an impact on somebody's duty to perform

Condition Precedent 

1. Related to an event, other than a lapse of time, which must occur before a duty to perform will arise.

2. It may arise out of an express or implied term of the contract, or by operation of law under the Doctrine of Constructive Conditions 

   1. Condition has to happen first than the duty arises

Condition Concurrent

A type of condition which exists when the parties to a contract are bound to render performance at the same time.

Condition Subsequent

To an event which by agreement of the parties, operates to terminate a duty of performance after it has arisen 

Impossibility

A party to a contract will be released from an obligation to perform when, neither from his act nor from his neglect, and prior to being in default, it has become impossible for said party to perform 

Commercial or Economic Impracticability

Although performance is not totally impossible, a party to a contract will be discharged from an obligation to perform when an unanticipated difficulty has occurred after the formation of the contract, with the result that performance would be vastly different than that intended by the parties 

1. Possible not anticipated difficulty

Breach - Material / Minor

1. Material: A breach is material if it is too substantial that it defeats the purpose of the parties in making the contractor if it is so significant as to destroy the value of the contract.

2. Minior: the plaintiff has a cause of action for damages caused by the breach, but the contract remains in effect

Frustration of Purpose

Although performance is still possible, a party to a contract will be discharged from an obligation to perform when an unanticipated event occurs after the formation of the contract, with a result that the parties' main purpose is making the contract has become so frustrated that the benefit to be received by one party  from the other party is now totally destroyed or materially impaired. 

1. No point

Two Most Common Remedies

1. Judgment

   1. Judgment that plaintiffs are entitled to collect sums of money from defendants and

2. Orders

   1. Orders to defendants to refrain from their wrongful conduct to undo its consequences

Legal Remedies

1. Legal remedies are those which, prior to the merger of law and equity, were available only in courts of law

2. Legal remedies are most often judgments for money to compensate for the plaintiff's damages, enforced by court judgments

3. Legal remedies can also be restitutionary enforced by writs

Equitable Remedies

1. Equitable remedies are those which prior to the merge of law and equity were available only in courts chancery

2. Equitable remedies are typically specific and imposed personal duties on the defendant 

3. They are enforced by coercing the  defendant to perform the required duty, under threat of contempt proceedings

Defenses - Mutual Mistake

Mutual Mistake: At the time of formation of a contract, both parties have an erroneous belief about the content or effects of a writing, or about the related facts. The Plaintiff must show [Both parties are mistaken] 

1. The mistake concerns a basic assumption upon which the contract was made,

2. The mistake had a major effect on the fairness of the deal, and 

3. The risk of the mistake was not allocated to the plaintiff

Defenses - Unilateral Mistake

Unilateral Mistake: At the time of formation of a contract, one party has an erroneous belief about the contents or effects of a writing, or about the related facts. The plaintiff must show:

1. The mistake concerns a basic assumption upon which the contract was made,

2. The mistake had a major effect on the fairness of the deal, and 

3. The risk of the mistake was not allocated to the plaintiff 

4. Either

   1. 1.Enforcement of contract would be unconscionable Or

   2. 2. The other party had reason to know of the mistake OR

   3. 3. THe other party actually caused the mistake

Anticipatory Repudiation

A form of anticipatory breach in which a party unequivocally repudiates a contract before performance has become due 

1. Don't need to wait till law day to sue

Remedies - Reliance Damages

1. When the expectancy cannot be calculated to a reasonable certainty, then the court may award damages according to the calculation of what the plaintiff expended in reliance on the contract [If you cant determine the price with certainty] [What did you spend relying on the contract] 

2. Contract Price As Limit

   1. When the defendant's only obligation is to pay a sum of money, reliance damages are almost always limited to the contract price. [Will not get more than contract price]

Remedies - Consequential Damages

Also called special damages, are a remedy that can be claimed by the plaintiff against the defendant for the harm caused as a consequence of the defendant's actions. 

1. The consequential damages do not necessarily have to arise from the direct wrongful action of the defendant, but result naturally from the act

1. special damages. This term reflects the 'foreseeability' requirement that arose out of the case Hadley v. Baxendale

Remedies - Specific Performance

A type of mandatory injunction in which the court orders a contracting party to perform that which he has promised to perform under the contract 

1. Specific performance is almost never awarded for breach of employment contracts or for personal services contracts due to the constitutional prohibition against involuntary servitude 

2. COURT ORDERING PARTY TO DO WHAT THEY PROMISED TO DO

Parol Evidence Rule Common Law

 if the parties have entered into a completely integrated contract, no evidence of a prior or contemporaneous agreement can be introduced to change the terms of the written contract

Parol Evidence Rule UCC

Under the UCC, the court must specifically find that the parties intended the writing to be the final agreement before extrinsic evidence will be excluded

1. Additionally, the contract may be explained or supplemented by parol evidence as to course of performance, course of dealing or usage of trade 

2. Course of Performance: A pattern of conduct established when one contract requires more than one performance. Once one or more of the performances has been completed and the other party has not objected, a pattern may be established to interpret the parties' intent for the remaining performances. No specific number of performances is required; however, the more performances already completed without objection, the more likely a court will determine a pattern for interpretation has been established. 

   1. One contract, multiple performances 

3. Course of Dealing: A pattern of previous conduct between the parties, such as prior contracts, which fairly establish a common basis of understanding for interpreting their current contract.

   1. A lot of prior contracts 

4. Usage of Trade: A customarily observed practice or method within a trade, vocation or locale. When a trade usage exists it may be offered as evidence to justify an expectation that the practice or method would be observed in the current transaction

Termination of Offer 

An offer terminates – the offeree’s power of acceptance ends if:

1. Lapse: The offeree fails to accept the offer prior to the time required

   1. AN offeree’s power of acceptance is terminated at the time specified in the offer OR if no time is specified at the end of a reasonable time 

   2. What is a reasonable time is a question of fact, depending on all the circumstances existing when the offer and attempted acceptance are made 

2. Rejection: The offeree rejects the offer

3. Operation of Law: the offeror dies or becomes incapacitated

4. Revocation: the offeror revokes the offer

Rejection

A manifestation by the offeree that he or she does not intend to accept the offer nor to give it further consideration

1. A rejection becomes effective upon receipt by the offeror

Counteroffer

An offer by the original offeree regarding the same transaction but containing terms that differ from those proposed in the original offer made by the offeror. 

1. A counteroffer is an implied rejection of the original offer. It is in effect a new offer available for acceptance

Contract Interpretation / Ambiguity

A contract is ambiguous when, examining the contract as a whole, in light of the circumstances at the time of its creation, the meaning of the contract is uncertain or material terms of the contract could reasonably be intercepted in two or more inconsistent ways

Constructive Condition 

Fulfillment of a promise in a bilateral contract is a condition of other party's performance 

 Substantial Performance

A plaintiff who has failed to perform a constructive condition in a minor or immaterial respect may nevertheless recover on the contract 

1. In order to recover the plaintiff must prove [ALL OF THEM] 

   1. The defendant got substantially what he bargained for

   2. The defendant can be reimbursed for what he did not receive

   3. There will be a great hardship on the plaintiff if he is denied recovery under the contract and 

   4. The deviation was not willful

Remedies - Cover / Market Damages

specific legal remedy used in contract law when one party breaches an agreement to buy or sell something. Instead of forcing the parties to complete the deal, the law compensates the injured party with money based on the item's current market value.

Excuse of Conditions 

Occurs in those situations where, even though a condition of performance does not occur, or where the condition of performance only partially occurs, the party must nonetheless perform

Waiver

When a party to contract voluntarily relinquish his or her known right to assert the non-performance of a condition

1. A waiver can be given by express agreement or by conduct 

2. A waiver may be retracted except where the other party has detrimental relied on the waiver

Estoppel

A party who has taken unfair advantage of another, by using false statements or conduct to induce the other person to act or promise to act, is barred from asserting a failure of condition against that other person.

1. The following elements apply

   1.  A false representation or concealment of material facts

   2. Intentionally or negligently made

   3. With intent to induce reliance

   4. Reasonable and detrimental reliance by the other party 

   5. Prejudice or harm will result unless the claim of estoppel succeeds

Remedies - Incidental Damages

Compensatory damages awarded to an injured party based on costs associated with the loss in the value of the other party’s failed or deficient performance.

Termination of Offer - Revocation

The canceling, annulling, or otherwise voiding of an offer. An offer may freely be revoked by the offeror unless

1.  1) the offer was for a unilateral contract and the offeree has already begun performance, 

2. 2) the offer was a firm offer, in which case it terminates at the end of the time stated without the need for further action by any party, or 

3. 3) the offeree detrimentally relied on the offer.

Remedies - Restitution

May be awarded as either a legal or equitable remedy to prevent unjust enrichment to the defendant

1. As a legal remedy, it refers to damages paid where the amount is calculated by determining the value that the defendant received from the plaintiff's performance of the contract 

2. As an equitable remedy, it refers to the return of something of value which was wrongfully obtained by the defendant, which would result in unjust enrichment if he were allowed to keep it [Return item]

   1. Seek restitution when the defendant got a large profit and they were unjustly enriched

SOF - Land Interest

1. Land is Unique 

2. Every piece of property is unique. Thus, if plaintiff has entered a contract for the purchase of property from defendant, money damages would not be adequate to compensate for defendant's breach through a later refusal to sale

Promissory Estoppel [Can Promissory estoppel provide a substitute for consideration?]

Provides a substitute for the element of consideration when there has been a foreseeable and detrimental reliance by the promisee upon the gratuitous promise made by the promisor

Defenses - Unconscionability

A contract with a provision that no fair and honest person would make and no person in his or her right mind would accept 

1. May apply when other defensive doctrines are not available, but the agreement "shocks the conscience" or is otherwise fundamentally unfair and

2. While the scope and application of the doctrine may be uncertain and sometimes controversial, it is well established under both the UCC and Restatement 

1. Unconscionability has "generally been recognized to include an absence of meaningful choice on the part of one of the parties together with the contract terms which are unreasonably favorable to the other party

UCC Battle of Forms

When parties use standardized forms to make offers and acceptances 

1. The additional terms automatically become a part of the contract

2. For different terms

   1. Offeror must expressly agree to them OR

   2. The ‘Knockout rule’: different terms ‘cancel out’ each other

   3. Contract terms become only those mutually agreed upon and UCC implied terms

      1. Exceptions: UOI, terms must not represent a material change, or offeror objects to the terms in a reasonable timeframe

3. A contract may be formed based upon the conduct of the parties

   1. An acceptance requiring assent to the terms, but both parties still proceed as if the contract was formed, then the conflicting terms will be cancelled out

Express Condition

An express condition is stated in the contract

1. The general rule is that express conditions are strictly and literally enforced by the courts

SOF - Suretyship

A promise to answer for the debt or default of another

1. ​​The Statute of Frauds requires certain types of contract, to be evidenced by a writing signed by the party to be charged.

SOF - Marriage

A promise in consideration of marriage

1. The Statute of Frauds requires certain types of contract, to be evidenced by a writing signed by the party to be charged.

Advertisement / Invitation to Deal

1. Majority Rule: Advertisement is not an offer but merely an invitation for offers

2. Minority Rule: If an advertisement includes definite and certain terms, It may be an offer 

Remedies - Liquidated Damages / Penalty

An amount of damages stated in a contract in advance of any breach.

1. If there is a valid liquidated damages clause in a contract, it will be the sole remedy available upon a breach of the contract 

   1. How to decide if the liquidated damages clause is valid

      1. In order for a liquidated damages clause to be valid, it must be shown that it is based on anticipated damages as opposed to being a mere penalty. This is shown by proving

         1. The amount of damages would have been difficult to ascertain at the time the contract was made AND

         2. The amount of liquidated damages is a reasonable forecast of anticipated damages

Defenses - Duress / Undue Influence

Where one party uses coercion which is subjectively great enough to overcome the free will of another, thereby inducing the other to enter or modify a contract, the contract or modification may be set aside 

1. VOIDABLE 

   1. Physically threat to sign a contract or cause economic hardship

Perfect Tender Rule [Did buyer rightfully reject the shipment under the perfect tender rule?]

If the tender of delivery fails in any respect to conform to the contract, the buyer may reject, accept the whole, or accept any units and reject the rest. A rejection must occur within a reasonable time after delivery and the buyer must notify the seller within a reasonable time. 

Rights / Duties of Third Parties

1. Third Party Beneficiary [Does Public Intercourse Cause VD]

1.  Define

   1. A third party beneficiary contract is one in which performance by the promisor will benefit a third party 

2. Privity

   1. Privity of Contract is the relationship that exists between the pirates to an agreement, allowing them to sue each other to enforce the agreement, but preventing a third party from doing so.

   2. Rule of Law: Under Contract law, privity is required for a person to have standing to sue to enforce a contract 

3. Intent to Benefit

   1. In order for the third party beneficiary to have standing to use, he must be an intended beneficiary

   2. Intended Beneficiary: One in whose favor the original parties  to the contract purposefully create an obligation, that is, one who is intended to receive the benefit of the processor's performance 

4. Classification

   1. Intended Beneficiary

      1. Creditor Beneficiary: Promisee's intent in contracting with promisor was to discharge a debt or duty to the 3rd party beneficiary

      2. Donee Beneficiary: Promisee's intent in contracting with promisor was to make a gift to the 3rd party beneficiary 

         1. CAN SUE PROMISOR

   2. Unintended Beneficiary 

      1. The contracting pirates were not contracting with an intent to benefit the 3rd party, but he may incidentally benefit 

         1. CAN NOT SUE PROMISOR

Vesting & Modification of Contract

1. The original parties retain the power to defeat or alter the beneficiary's rights up until the time that the beneficiary's rights have vested.

2. Majority Rule: The rights of an intended beneficiary best when he has learned of the existence of the contract and assented to it 

3. Minority Rule: The rights of an intended beneficiary best when he has detrimentally relied on the contract

Divide Lawsuits if Necessary

1. Beneficiary v. Promisor

   1. The 3rd party beneficiary can sue the promisor for failure to perform the 3rd party beneficiary contract

2. Beneficiary v. Promisee

   1. A creditor beneficiary can sue the promisee on the original obligation. A donee beneficiary has no rights against the promisee.

Defenses - Misrepresentation 

One party intentionally, negligently, or even innocently makes a false statement upon which the other party relies in agreeing to the contract. The remedy is recession, or if not possible, then actual damages may be awarded.

Fraud

1. Intentional making of a false statement upon which the other party to the contract relies when agreeing to enter the contract. Fraud may also be found when one party misleads the other by telling a half truth or by acting to conceal the truth or has a fiduciary duty to the other party and intentionally fails to disclose a material fact. 

2. The usual course of action is a suit in torts, which will allow the plaintiff to seek punitive damages.

Mirror Image Rule [Common Law]

1. Under the common law, an acceptance must match the terms of the offer

2. If the acceptance contains additional or different terms, it is a counter ofer rather than an acceptanc

Mirror Image Rule [ UCC] 

An acceptance may differ from the offer with regards to minor terms 

Rescission / Mutual Release

1. An agreement by the parties to an existing executory contract to consider their contract null and void

2. The rescission is a contract in itself and requires mutual assent and consideration 

   1. The consideration is each party will not see the other for not performing

Defenses - Capacity

1. Legally Incapacity= Under 18

2. Mental Incapacity= Mentally incapacitated person has the power to disaffirm a contract by manifesting to the other party an unwillingness to continue to be bound by the contract

Third-Party Beneficiary

1. A third party beneficiary contract is one in which performance by the promisor will benefit a third party 

2. One wherein performance by the promisor will benefit a third party.

Defenses - Illegality / Public Policy

If the subject matter of a contract is unlawful, the contract is unenforceable 

1. After the formation of the contract, the purpose for which the contract was created has become illegal. In such a case, the duty to perform is discharged 

2. After formation is illegal

Merchant Firm Offer

Under the UCC, an option need not be paid for if the firm offer was

1. Made by a merchant 

2. who signed  in writing giving assurance that the offer

3. Will remain open for a specified length of time OR

4. If not specified, then for a reasonable length of time not to exceed three months 

1. Under the common law, a firm offer is an offer which is irrevocable because an option has been paid for by one of the PARTIES

Mailbox Rule

An offer is considered accepted the moment the offeree mails their letter, rather than when the offeror receives the letter in the mail. 

1. The mailbox rule also applies to other means of communication, such as a fax, telegram, or email, provided that it is irrevocable once sent.

unilateral contract

A contract formed when an offer can be accepted only through performance.

• The offeror may revoke the offer any time before the offeree begins performance.

• Once performance has begun, however, many courts hold that the offeror must give the offeree a reasonable opportunity to complete it.

Assignment

The transfer of a contractual right by the obligee to a third party, made after the formation of a contract

1. DEPRAVED

   1. D=Define assignment

   2. P=Privity not required

   3. A=Is the right assignable?

   4. V=Is there a valid present assignment?

   5. E=What is the effect of the assignment?

   6. D=Are there any defenses?

Delegation

A delegation and assumption of duties is a transfer of a contractual obligation[1] by the obligor/delegator to a third party[2], made after formation of a contract[3]

Adequate Assurances

1. UCC "Commercial Standards"

   1. Between merchants the reasonableness of grounds for insecurity and the adequacy of any assurances offered shall be determined according to commercial standards

2. Common Law "Reasonableness"

   1. The demand for assurances must be reasonable and must not exceed the contractual requirements. A demand which exceeds contractual requirements may be a repudiation of the contract.

Novation

1. A NEW CONTRACT THAT IS, IN EFFECT, AN IMMEDIATE DISCHARGE OF A PRE-EXISTING CONTRACTUAL DUTY WHICH CREATES A NEW DUTY IN ITS PLACE.

2. It requires the replacement of one of the previously contracting parties with a new party who neither owed the previous duty nor was entitled to its performance

Accord and Satisfaction

1. An accord is an agreement to compromise an existing obligation which has become the subject of a good faith dispute

2. However, the accord itself does not discharge the original contract; it only suspends the right to enforce the original contract until the accord is satisfied. 

3. An agreement [ accord]

4. Between two contracting parties to 

   1. A. Accept alternate performance to discharge preexisting duty between them

   2. B. The subsequent performance [satisfaction] of that agreement

Installment Contract

A contract that contemplates performance in separate parts over time rather than in a single, complete exchange. 

1. The parties’ obligations, such as payment, delivery of goods, or performance of services, are divided into a series of installments.

2. UCC

   1.  A contract that requires or authorizes delivery of goods in separate lots to be separately accepted is considered an installment contract, even if the agreement states that each delivery is a separate contract. 

   2. A buyer may reject a nonconforming installment if the nonconformity substantially impairs the value of that installment and cannot be cured.

      1.  If a nonconformity substantially impairs the value of the entire contract, it may constitute a breach of the whole agreement.

Risk of Loss

The risk of loss of goods during shipment is placed upon the party who was in the best position to have insured against the risk of loss. 

1. If seller is a merchant, the seller bears the risk of loss until buyer relieves the goods

2. If seller is not a merchant, then buyer assumes the risk of loss once the good are tendered for delivery

Illusory Promise

An expression that resembles promissory terms, but actually imposes no obligation upon the party making it

1. So the element of legal detriment is lacking

Termination of Offer - Lapse / Death

An offer lapses if the offeree fails to accept the offer prior to a specified time. 

1. Or reasonable amount of time 

1. Revocation: Offeror revokes the offer before acceptance

2. Counter Offer: Decline offer and submit a new one, switching who the offeror and offeree are.

Warranty - Express

1. A warranty that is stated either verbally or writing 

Warranty - Merchantability

Implied Warranty of Merchantability

1. Goods sold by a merchant must be fit for the ordinary purpose for which such goods are used

Warranty Disclaimer / Limitation

A legal statement that limits a seller's responsibility for a product or service, typically stating items are sold "as is" without guaranteeing quality or performance. It helps businesses reduce legal liability and manage customer expectations

1. A warranty limitation restricts the scope, duration, or liability of a manufacturer's or seller's guarantee, commonly capping remedies to repair or replacement and excluding consequential damages. 

2. Key aspects include time constraints, coverage exclusions, and legal disclaimers

Past Consideration 

Past consideration = NO consideration 

 Moral Obligation

The moral Obligation Rule provides a substitute for consideration if

1. The promisor has received something of value from the promisee

   1. Ex: Gift / service 

2. Under such circumstances was the create a moral obligation for the promisor to pay for what was received and

3. The Promisor has later promised to pay