Contracts Exam Flashcards

Flashcards for reviewing key vocabulary and concepts in contract law.

Uniform Commercial Code (UCC) Article 2

Deals with the sale of goods; applies to transactions where goods are movable at the time of the transaction.

Mutual Manifestation of Assent

An agreement between parties, tested objectively (e.g., Lucy v. Zehmer), showing commitment by one party.

Offer

Manifestation of commitment; content includes reasonable and clear terms; context differentiates offers from advertisements or social settings.

Termination of Offers

Occurs due to death/incapacity, lapse of time, revocation (before acceptance), or rejection of the offer.

Irrevocable Offers

Include options (paid promise), firm offer rule (signed writing by merchant), and offers relied upon (Restatement 87(2)).

Rejection of Offer

Termination of offer via counteroffer, conditional acceptance, or additional/different terms (common law mirror image rule).

UCC 2-207

Deals with additional terms in acceptance; determines if a contract exists and what its terms are when communications aren't identical.

Acceptance

Must occur before revocation; can be specified by offer (unilateral/bilateral); generally, notification is required for acceptance by promise, with the Mailbox Rule applying.

Consideration

Requires 'bargained for' legal detriment to promise enforcer or something bargained for by the promise breaker; necessary for contract formation.

Forms of Consideration

Bargained for performance, forbearance, or a promise to perform/forbear.

Promissory Estoppel

A consideration substitute involving a promise, reasonable reliance, and the avoidance of injustice (Restatement 90).

Illegality (Defense)

Renders an agreement unenforceable based on its effect on the actor or the contract itself.

Public Policy (Defense)

Commonly involves exculpatory clauses or covenants not to compete that may render an agreement unenforceable.

Uncertainty (Defense)

Arises from ambiguity in contract terms (patent or latent) that makes enforcement difficult.

Unconscionability

UCC 2-302, includes procedural (unfair surprise) and substantive (oppressive) elements that render a contract unenforceable.

Duress (Defense)

Involves physical or economic coercion by the enforcing party, leaving the other party with no alternative.

Statute of Frauds

Specifies when a signed writing is required for a contract to be enforceable (e.g., sale of goods $500+, real estate transfers).

Misrepresentation

A false statement of fact that is material and relied upon by the defending party, rendering the agreement unenforceable.

Mutual Mistake of Existing Fact

Both parties share a mistaken belief about existing facts that is material to the agreement.

Unilateral Mistake of Existing Fact

One party has a mistaken belief about existing facts, and the other party knows or the mistake is unconscionable.

Nonoccurrence of a Condition Precedent

Excuses performance if a condition (e.g., obtaining mortgage) is not met; requires clear contract language.

Force Majeure Clauses

Excuse performance due to events like 'acts of God' or government regulations.

Impossibility/Impracticability

Excuses performance if an unforeseen event (e.g., destruction of necessary item) makes performance impracticable.

Frustration of Purpose

Excuses performance if an unforeseen event eliminates the mutually understood purpose of the contract.

Material Breach

A significant breach that excuses the non-breaching party from performance.

Anticipatory Repudiation

Early, unambiguous indication of a material breach, allowing the non-breaching party to sue immediately.

Specific Performance

An equitable remedy where a court orders a party to fulfill the terms of the contract, often in land sales.

Expectation Damages

Legal remedy aiming to compensate the non-breaching party and put them in the position as if the contract had been performed.

Reliance Damages

Alternative to expectation damages; puts the non-breaching party in the position as if no contract had been made.

Restitution Damages

Focuses on the gain by the breaching party from the non-breaching party.

Parol Evidence Rule

Governs the admissibility of evidence of prior or contemporaneous agreements to supplement or vary a written contract.

Third-Party Beneficiary

A third party who benefits from a contract between two other parties and has the right to enforce the contract.

Assignment

Transfer of rights under a contract to a third party (assignee), who can then recover from the obligor.

Delegation

Transfer of duties under a contract to a third party (delegatee), but the delegator remains liable.