Contracts midterm

Contract

A promise or a set of promises, for the breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty.

Unilateral contract

A contract in which acceptance must be invited by performance.

Bilateral contract

A contract in which a party must promise to perform in order for the other promise to be fulfilled.

UCC

Source of law governing transactions regarding goods, defined as items moveable at the time of contract.

Goods

Something that is moveable at the time of contract.

Common law

Source of law dealing with services, land, or anything not covered by the UCC.

Hybrid Transactions

A single transaction involving a sale of goods and either services, or the sale, lease, or license of property other than goods.

Predominant factor test

Test that evaluates which aspect predominates in a hybrid transaction to decide whether common law or UCC applies.

Objective Theory of Contracts

Doctrine determining mutual assent based on whether a reasonable person would think the words or actions of another manifested intent, using an objective standard rather than undisclosed subjective intent.

Lucy v. Zehmer

Case holding that contractual intent is determined by the objective reasonable-person standard, not undisclosed subjective intent.

Leonard v. PepsiCo

Case holding that advertisements are generally not invitations to make offers unless they are clear, definite, explicit, and leave nothing open for negotiation.

Offer

A manifestation of willingness to enter into a contract containing intent to be bound, clear, definite, explicit terms, and reasonable certainty with no room for further negotiation.

Preliminary negotiations

Communications where further manifestations of assent are required, showing no intent to be bound; NOT an offer.

Lefkowitz v. Great Minneapolis Surplus Store

Case holding that an advertisement can be an offer when it contains definite terms and a clear method of acceptance.

Acceptance

A manifestation of assent to the terms thereof made by the offeree in a manner invited or required by the offer.

Mirror image rule

Common law rule requiring acceptance to match the original offer unconditionally with no changes; any shift or added terms count as a counteroffer and terminates the original offer

Minneapolis & St. Louis Railway Co. v. Columbus Rolling-Mill Co.

Case holding that under the common-law mirror-image rule, acceptance must match the offer, and a materially different response is a counteroffer.

Ever-Tite Roofing Corp. v. Green

Case holding that if an offer permits acceptance by performance, beginning the requested performance can constitute acceptance, and an offer without a specified deadline remains open for a reasonable time.

Ammons v. Wilson & Co

Case holding that silence normally is not acceptance, but can be when the parties' prior dealings or circumstances reasonably make silence a manifestation of assent.

Mailbox rule

Rule under which an acceptance of an offer is valid and forms a binding contract the moment it is properly mailed or dispatched.

Indirect revocation

Revocation occurring when the offeree receives correct information from a reliable source of acts of the offeror indicating to a reasonable person that they no longer wish to make the offer.

Direct revocation

Revocation directly communicated to the offeree by the offeror that terminates the offer.

Counter-offer

An offeree's response that acts as a rejection of the original offer and creates a new offer with new terms.

Lapse

Termination of an offer when an unreasonable amount of time passes, evaluated based on contract nature, purpose, course of dealing, and trade usage.

Option contract

A separate agreement where the offeree gives consideration for a promise and the offeror agrees to hold the offer open.

Promissory estoppel

Doctrine making an offer or promise enforceable without consideration when there is a promise, foreseeable and reasonable reliance, actual detrimental reliance, and injustice unless enforced.

Consideration

A bargained-for exchange requiring a performance or return promise of substance in which the promisor and promisee exchange something of value.

Forbearance

Refraining from doing something that one has a legal right to do, which can serve as valid consideration.

Gratuitous promise

A promise to make a gift without anything exchanged in return, which is not enforceable without consideration.

Past consideration

Services or actions completed before a promise was made, which do not constitute valid consideration for a subsequent promise.

Pre existing duty

Rule specifying that a promise to perform an existing contractual obligation does not constitute new consideration.

Angel v. Murray

Case holding that under Restatement § 89, a contract modification may be enforceable without new consideration when fair and equitable due to unanticipated circumstances.

Illusory promises

An empty promise manifesting no commitment and making performance optional, which fails to act as consideration.

Nominal consideration

A tiny or symbolic payment that does not match actual value, or a false statement of value (sham), failing to serve as valid consideration.

Mills v. Wyman

Case holding that moral obligation alone is not consideration when there was no prior legal obligation or bargained-for exchange.

Webb v. McGowin

Case establishing the material-benefit exception, holding that a subsequent promise may be enforceable when the promisor received a substantial material benefit from prior performance.

Bargained for exchange test

Test analyzing what performance or promise the promisor sought and what the promisee gave in exchange.

Promissory restitution

A promise made after a benefit is already received becomes legally binding to prevent injustice, even without consideration. considered the exception for pass consideration. THERE IS A PROMISE MADE PRIOR

Quasi contract

·       a legal obligation imposed by a court to prevent one party from being unjustly enriched at the expense of another, even though no formal or actual agreement exists. the contract is created by the judge after the fact to avoid unjust enrichment. PROMISE NOT NECESSARY

statue of frauds

requires certain contracts to be in writing and signed by the parties bound. types of contracts include: Marriage, year (cant be executed within a year), land, executor, goods 500 plus, surety

requirments for writing under SOF

Must be one or more writings

Tacking- multiple writings can be put together to satisfy the writing

Needs to be signed by the party seeking to avoid enforcement

Must have all of the essential legal elements

if you meet the elements of SOF

contract is enforceable

if you dont meet elements of SOF

contract is not enforceable

Exceptions under SOF

statute of frauds is not met. but can enforce a contract that normally would need to be in writing but is not

Promissory estoppel- person looking to enforce the contract detrimentally relied on the contract

Part-performance- person looking to enforce the contract had already started performing

was there mutual assent?

offer and acceptance

was a contract formed?

mutual assent and consideration

is the contract enforceable?

statute of frauds