Contracts Law Attack Outline

Vocabulary flashcards covering core doctrines, rules, and statutory standards from the Contracts Attack Outline lecture notes.

Contract

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

Promise

A manifestation to act or refrain from acting in a specified way, so made as to justify a promisee in understanding that a commitment has been made.

Predominant Purpose Test

A test applied to mixed transactions involving goods and services to determine whether common law or the UCC governs, looking to the primary subject matter as evidenced by party intent, relative costs, and related factors.

UCC Merchant

A person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction, or to whom such knowledge or skill may be attributed by his employment of an agent, broker, or other intermediary holding themselves out as having such skill.

Offer

A manifestation of willingness to enter into a bargain, so made as to justify another person in understanding that his assent to that bargain is invited and will conclude it (Restatement Second of Contracts Section 24).

Preliminary Negotiations

A manifestation of willingness to enter into a bargain that does not constitute an offer if the recipient knows or has reason to know that the maker does not intend to conclude a bargain until making a further manifestation of assent.

Direct Revocation

A form of revocation occurring when the offeree receives from the offeror a manifestation of intention not to enter into the proposed contract before acceptance.

Option Contract

A promise meeting the requirements for contract formation that removes the promisor's power to revoke the offer, which requires separate consideration.

Firm Offer (UCC)

An irrevocable offer between merchants to buy or sell goods in a signed writing which gives assurance that it will be held open, rendering it non-revocable for lack of consideration during the time stated or for a reasonable time.

Mirror Image Rule

A common law rule requiring acceptance to be in exact accordance with the terms of the offer; any departure, qualification, or divergence operates as a counteroffer and rejection.

Mailbox Rule

A rule stating that acceptance is effective upon dispatch as soon as it is put out of the offeree's possession, regardless of whether it ever reaches the offeror, unless it involves an option contract which is effective upon receipt.

Unilateral Contract

A contract that can only be accepted and satisfied by complete performance, though partial performance under Restatement Section 45 limits the offeror's power to revoke until performance is complete.

Consideration

A bargained-for exchange of promises or performances where the promisor makes a promise to induce the return promise or performance, and the return promise or performance is made to induce or secure the initial promise.

Promissory Estoppel

A basis for recovery under Restatement Section 90 when a clear and definite promise is made without consideration, reliance is reasonably expected and actually induced, and enforcement is necessary to avoid injustice.

Moral Consideration

A promise made in recognition of a benefit previously received from the promisee, enforceable only to prevent injustice when a material personal benefit was received and a promise made to make the party whole.

Ambiguous Terms

Contractual terms that have competing definitions, resolved based on party knowledge and intent, or resulting in no contract if there is a true latent ambiguity with no basis to break the tie.

Vague Terms

Contractual terms that are inclusive of many ideas, interpreted hierarchically through express terms, course of performance, course of dealing, and usage of trade.

Contracts of Adhesion

Standardized, take-it-or-leave-it agreements drafted by one party, enforceable when the adhering party has adequate notice and manifests assent to the writing.

Battle of the Forms (UCC Section 2-207)

The UCC statutory framework replacing the mirror image rule, under which a definite and seasonable acceptance creates a contract even with additional or different terms unless acceptance is expressly made conditional on assent to those terms.

Knock-Out Rule

The UCC Section 2-207 Comment 6 approach where conflicting or different terms in opposing form documents cancel each other out and are omitted from the resulting contract.

Parol Evidence Rule

A rule stating that when a written agreement is fully integrated as a complete and exclusive statement of terms, extrinsic evidence of prior or contemporaneous agreements is inadmissible to vary or contradict the contract.

Merger Clause

A provision in a written contract reciting that the agreement is complete on its face, which strengthens the presumption that prior negotiations have been fully merged into the document.

Duty of Good Faith and Fair Dealing

An implied non-waivable obligation in performance and enforcement requiring honesty and observance of standards, tested in common law by the presence of a legitimate business rationale.

Implied Warranty of Merchantability

A default warranty under UCC Article 2 implied in sales contracts by merchants of goods of that kind, ensuring that goods pass without objection in trade and are fit for the ordinary purposes for which such goods are used.

Implied Warranty of Fitness for a Particular Purpose

A default UCC warranty implied when the seller has reason to know the buyer requires goods for a particular purpose and knows the buyer relies on the seller's skill or judgment to select or furnish suitable goods.

Express Warranty

An affirmation of fact, promise, description, or sample/model relating to goods made by the seller that becomes part of the basis of the bargain.

Condition

An event, not certain to occur, which must occur, unless its non-occurrence is excused, before performance under a contract becomes due (Restatement Second of Contracts Section 224).

Express Condition

A condition explicitly agreed to by the parties that is subject to strict compliance ($100\%$), the non-occurrence of which discharges the other party's contractual performance duties.

Constructive Condition

An implied condition imposed by law based on a backward inquiry to determine if an unperformed promise is sufficiently central to excuse the non-breaching party from performing.

Anticipatory Repudiation

A clear and unequivocal manifestation by one party prior to the due date of performance indicating an intention not to perform on the contract.

Adequate Assurance of Performance

A written demand made upon reasonable grounds for insecurity regarding the other party's ability or willingness to perform, allowing suspension of performance and ripening into repudiation if not provided within 30 days.

Material Breach

A nonperformance of a contractual obligation that deprives the non-breaching party of its reasonable contract expectations, entitling that party to suspend its own performance.

Perfect Tender Rule

A UCC standard allowing a buyer to reject goods and delivery that fail to conform in any respect, subject to the seller's right to cure within the allowable performance window.

Expectation Damages

Remedies calculated under Restatement Section 347 that aim to place the non-breaching party in the position they would have occupied had the contract been fully performed, capturing the benefit of the bargain.

Reliance Damages

Damages aimed at placing the injured party in the position they would have occupied had the contract never existed by compensating for expenditures made in preparation or performance, less proven losses.

Restitution Damages

Damages aimed at placing the promisor in the position they would have occupied if no contract had existed by requiring the disgorgement of benefits conferred to prevent unjust enrichment.

Liquidated Damages

An amount stipulated in an agreement as compensation for breach, enforceable only if reasonable in light of anticipated or actual harm and proof difficulty, and not designed as a punitive penalty.

Specific Performance

An equitable remedy ordering a party to complete performance as promised, presumed for land contracts and applicable to unique or scarce goods where remedies at law are inadequate.

Diminution of Value

A measure of contract damages based on the difference in market value rather than the cost of completion, applied when replacement costs are grossly disproportionate and the breach was innocent and accompanied by substantial performance.

Statute of Frauds

An affirmative defense requiring designated classes of contracts (marriage, contracts not performable within one year, land, executory, guarantor, and sales of goods for $\ge \$500$) to be evidenced by a signed writing.

Cognitive Test (Incompetence)

An objective test used to evaluate mental competence, asking whether the individual attempting to avoid the contract was capable of understanding and appreciating the nature and consequences of the transaction.

Misrepresentation in the Inducement

An assertion not in accord with the facts that is fraudulent or material, which is justifiably relied upon by the recipient in manifesting assent to enter a contract.

Duress

A formation defense established when an improper threat induces the victim's assent and the threat is sufficiently grave to justify that assent.

Undue Influence

Unfair persuasion of a vulnerable party by someone who dominates them or stands in a relationship where the party is justified in assuming the persuader will not act against their welfare.

Procedural Unconscionability

A defect in the contract formation process characterized by lack of meaningful choice, oppression, surprise, or hidden terms such as inconspicuous fine print.

Substantive Unconscionability

A defect in the content of a contract characterized by contractual terms that are overly harsh, one-sided, or unreasonably favorable to one party.

Mutual Mistake

A shared erroneous belief regarding a basic assumption existing at the time of contract formation that has a material effect on the agreed exchange of performances, where the adversely affected party did not assume the risk.

Unilateral Mistake

An erroneous belief held by one party at formation regarding a basic assumption with an adverse material effect, voidable if the mistaken party bore no risk and enforcement would be unconscionable or the non-mistaken party caused or knew of the error.

Commercial Impracticability

A doctrine discharging a promisor's performance duties when an unforeseen contingency occurs after formation, the non-occurrence of which was a basic assumption, making performance commercially impracticable without fault.

Frustration of Purpose

A doctrine discharging contractual duties when an unexpected post-formation event substantially or totally destroys the principal purpose of the contract without the party's fault, where non-occurrence was a basic assumption.

Intended Beneficiary

A third party who acquires enforceable rights under a contract because recognition of their right effectuates party intent and performance either satisfies a debt (creditor) or confers a gift (donee).

Incidental Beneficiary

A third party who benefits from the performance of a contract but was not intended by the promisee to acquire enforceable rights against the contracting parties.