contracts - translation of general terms

contract as ‘agreement-in-fact’ is…

what the parties said & agreed to

‘agreement as written’ is…

the actual, physical document recording the agreed-to terms

‘legal obligation’ is…

set of rights & duties created by law

‘primary authority‘ is…

the law itself; binding statutory codes & common law

‘secondary authority’ is…

non-binding commentaries, legal treatises, law review articles; each of which explain or critique the law

‘stare decisis‘ is…

courts are required to follow prior court decisions to maintain legal predictability & fairness

‘restatements of the law‘ are…

syntheses of common law principles compiled by legal scholars/judges under the ALI (american legal institute)

‘mutual assent‘ is…

the requirement that both parties manifest agreement to exchange of promises

‘objective theory of contract‘ is…

the rule that contract formation is judged strictly by outward conduct & words as understood by a reasonable person, rather than unexpressed intent

‘duty to read‘ or, ‘presumption of knowing assent‘ is…

the rule that a person is legally bound by a contract’s terms regardless of whether or not they read it

‘bilateral contract‘ is…

contract formed by an exchange of mutual promises

‘unilateral contract‘ is…

contract formed when an offer explicitly requests an act/performance as the only mode of acceptance

‘unilateral option contract rule‘ (restatements (second) of contracts § 45) is…

a restatement stating that an offeree beginning a process in a unilateral contract creates an option contract that can’t be revoked while performance is underway

‘agreement to agree’ is…

an arrangement where parties leave material terms open for future negotiation, which is usually unenforceable unless a clear standard or duty to bargain in good faith is specified

‘consideration’ is…

the requisite legal validation for a traditional contract’’

‘benefit/detriment test‘ is…

a component of old contract law that asks whether the promisor received a legal benefit, or whether the promisee suffered a legal detriment

‘bargain theory’ (restatement (second) of contracts § 71) is…

a restatement stating that a peformance or return promise to be bargained for is required, meaning it was sought by the promisor in exchange for their promise & given by the promisee in exchange for that promise

‘legal detriment‘ or, ‘forbearance‘ is…

giving up a legal right or limiting one’s legal freedom of action at the request of another

‘condition on a gift vs. consideration‘ highlights…

conduct required merely to allow someone to receive a gift compared to conduct bargained for as the price of the deal itself

‘past consideration‘ is…

an act or benefit conferred before a promise was made, which isn’t enforceable because it wasn’t bargained for in exchange for the current promise

‘illusory promise‘ is…

a statement that appears to be a promise but makes peformance entirely option for the speaker, whic fails as consideration

‘promissory estoppel‘ (restatement (second) § 90) is…

a restatement stating that a promise is enforced even if it lacks consideraiton if the promisor reasonably expected it to induce reliance, the promisee relies on it to their detriment, and injustice can be avoided only by enforcement

‘drennan rule/offeree reliance‘ (restatement (second) § 87(2)) is…

a restatement stating that an unaccepted offer is open as an irrevocable option contract when a general contract foreseeably & reasonably relies on it to their detriment before acceptance

‘option contract recital’ (restatement (second) § 87(1)(a)) is…

a restatement stating that an option contract is binding if it is in a signed writing & recites a purported consideration (either nominal/unpaid)

‘unjust enrichment‘ is…

the principle that a person should not receive a benefit at another’s expense when keeping it without paying compensation would be unfair

‘restitution‘ is…

the cause of action & remedy designed to restore the value conffered

‘‘implied-in-fact contract’ is…

a true contract inferred from conduct & surrounding circumstances, showing mutual assent of a bargain.

‘implied-in-law contract’ or, ‘quasi-contract‘ is…

a legal fiction imposed by courts to prevent unjust enrichment, even where no actual contract exists

‘officious intermeddler/volunteer’ is…

someone who forces an unrequested benefit upon another without consent or emergency; they are denied restitution

‘emergency exception’ (restatement (third) of restitution § 116) is…

a restatement stating that restitution is allowed without prior consent when emergency/medical care is provided to preserve life/health/valuable property

‘promissory restitution’ or, ‘material benefit rule‘ (restatement (second) of contracts § 86) is…

a restatement stating that a subsequent express promise made in recognition of a previously received material benefit is enforceable to prevent injustice

‘statute of frauds‘ is…

a formal statutory rule barring enforcement of specific categories of contracts unless evidence by a signed writte memorandum

‘MYLEGS categories,‘ what are they?

• marriage as consideration

• year < length required to perform for

• land/real estate transactions

• executor promises to pay decedent’s debts

• goods of $500 or more

  • suretyship promises to pay another’s debts

‘party to be charged‘ is…

the defendant against whom contract enforcement is sought

‘one-year possibility test’ is…

provision in the statute of frauds that if performance within one year is theoretically possible under any scenario (a ‘lifetime’ employment contract where a person could die in 365 days), it falls outside the statute of frauds & doesn’t require writing

‘part performance exception‘ is…

an equitable exception enforcing oral contracts when acts of peformance unequivocally prove the deal exists

‘statute of frauds promissory estoppel‘ (restatements (second) of contracts § 139) is…

allows enforcement of an oral contract despite the statute of frauds if detrimental reliance was foreseeable and injustice can only be avoided by enforcement

‘contract interpretation’ is…

the judicial process of determining the meaning of contractual ters to ascertain the intent of the parties

‘textualism’ or, ‘four corners approach’ is…

classical approach where a judge determines whether a contract is ambiguous by examining only the text within the four corners

‘contextualism’ is…

the modern approach where a judge reviews extrinsic evidence (negotiation history, trade usage, context) right at stage 1 to determine if the language is ambiguous

‘patent vs. latent ambiguity‘ refers to the distinction between

patent ambiguity (appears clearly on the face of the contract); latent ambiguity (arises when clear language applies uncertainty to real world contracts)

‘subjective standard’ (restatement second (contracts) §201) is…

a restatement stating that if both parties share the same subjective meaning, that meaning governs; if they disagree, one party’s meaning governs if the other party knew or had reason to know it

‘canons of construction‘ are…

maxims of interpretation (interpreting a contract); contra proferentem (construing ambiguous terms against the drafter)

‘reasonable expectations doctrine’ is…

protects adherents to standard-form agreement from bizarre, oppressive, hidden terms that fall outside what they reasonably expected, even in signed contracts

‘parol evidence rule‘ is…

a rule governing written contracts that exclude evidence of prior/contemporaneous oral statements offered to contradict or supplement an integrated written agreement

‘integration’ generally is…

an integrating writing as a final expression of terms

‘partial integration‘ is…

final as to some terms (can be supplemented by consistent extra terms, but not contradicted')

‘total integration‘ is…

a complete and exclusive statement of the deal (cannot be contradicted or supplemented by parol evidence)

‘merger clause‘ is…

a clause stating that ‘this document is the final & complete agreement,’ which created a strong presumption of total integration

‘exceptions to the parol evidence rule’

parol evidence is admissable to prove fraud, duress, mistake, misrepresentation, or to resolve contract ambiguities