CLEP Modern States Contracts

Demand for assurances

can be issued if party has reasonable grounds for worrying about whether other party will perform.

Failure to perform a contract

is a breach, but extent of failure determines extent of damages

Contract

A legally enforceable promise

Quasi-Contract (or Implied-in-law Contract)

a legal obligation imposed by law to prevent unjust enrichment

Unilateral Contract

a one-sided agreement where one party makes a promise in exchange for the other party's performance of a specific action

Promisee

a person to whom a promise is made.

Beneficiary

a third party who receives a benefit from a contract between two other parties, but is not a direct party to the agreement

Bailment

agreement where one party (the bailor) transfers possession of personal property to another party (the bailee) for a specific purpose, with the understanding that the property will be returned or disposed of as agreed.

Bilateral Contract

both parties make

Promisor

Person who makes promise

Mutual Assent

Both parties must exhibit intent to be bound

Offer

Offeror must communicate a specific offer

Termination of Offers

Offers can be revoked prior to acceptance

Acceptances

Only the person to whom offer is made can acceptance

Consideration

a negotiated promise between the parties that gives a benefit to one party or is to the detriment of the other.

Detrimental Reliance

also known as promissory estoppel, is a legal principle where a promise, even if not a formal contract, can be enforced if one party relied on it to their detriment.

Legal Incapacity to Enter Contracts

Minors, Mental Incompetency, Intoxication

Third party beneficiary

a third party that benefits from a contract between two people (build a house for my son)

Assignment

A transaction that transfers contract rights from one party to another

Revocability of Assignments

Irrevocable if supported by consideration

Statute of Frauds

requiring certain types of contracts to be in writing and signed by the party being charged in order to be enforceable: My legs : Marriage, Year, Land, Executor, Goods, Surety,

Breach

Failure to perform a contract is a breach, but extent of failure determines extent of damages

Anticipatory Repudiation

Party indicates by words or action that she will not perform in advance of the time of performance

Remedies

meant to restore them to the position they would have been in had the contract been fulfilled (monetary ,equitable)

Compensatory damages

most common type of remedy, compensatory damages, are designed to cover the financial losses directly resulting from the breach

Restitution

awarded to repay a party providing a benefit for the reasonable value of the benefit they provided

Affirmative Defenses to Breach

Lack of Capacity, Violation of Statute of Frauds, Duress, Undue Influence, Mutual Mistake