Corporate & Commercial Law I: Module 1 Flashcard

What is a contract?

A legally enforceable agreement between two or more parties; enforceability ensures judicial or administrative remedies.

What are the five essential elements of a valid contract?
A-C-C-L-F:

• Agreement (Offer + Acceptance + Assent)

• Consideration (Mutual exchange of legal value)

• Capacity (Legal ability to contract)

• Legality (Compliance with law/public policy)

• Form (Writing required in certain cases—Statute of Frauds)

What is an offer?

A manifestation of intent to enter into a bargain, inviting acceptance and creating power of acceptance in offeree.

What are the elements of a valid offer?

• Intent to be bound

• Definiteness of material terms (price, quantity, delivery, etc.)

• Communication to offeree

How can an offer be terminated?

• By Offeree: Rejection or counter-offer

• By Offeror: Revocation (before acceptance)

• By Law: Death, incompetence, destruction of subject, lapse of time

What are special types of offers?

• Auctions: With/without reserve

• Rewards: Acceptance by performance; prior knowledge required

• Advertisements: Not offers unless specific (e.g., VIN-specified car)

What constitutes valid acceptance?

• Unequivocal assent (Mirror image rule)

• Proper communication (express or reasonable)

• Mailbox Rule: Acceptance effective upon dispatch

What defects negate mutual assent?

• Mistake:

  • Of Value: Enforceable

  • Of Fact:

    • Unilateral: Generally enforceable

    • Mutual: Voidable

• Fraud:

  • Inducement: Misrep. of material fact

  • Inception: Misrep. of nature of document

• Duress: Threat-based compulsion

• Undue Influence: Exploiting trust/confidence

• Unconscionability: Extreme unfairness + power imbalance

What is consideration?

A bargained-for exchange of something with legal value (promise or performance).

What are examples of invalid consideration?

• Gratuitous promises

• Past consideration

• Pre-existing legal duties

• Illegal consideration

• Illusory promises

• Partial payment of debt

What are exceptions where a contract without valid consideration may still be enforced?

• Promissory Estoppel: Reliance-induced detriment

• Charitable Subscriptions

• Promise to Pay Time-Barred Debt

What is the Statute of Frauds and its mnemonic?
“MYLEGS”—Contracts requiring writing to be enforceable:

• Marriage

• Year (cannot be performed within one year)

• Land

• Executor’s personal promise

• Goods ($500+ under UCC)

• Suretyship

What are the writing requirements under the Statute of Frauds?

• Must include essential terms and a signature

• Integration: Complete and final expression of agreement

• Parol Evidence Rule: Prior/extrinsic oral terms excluded

What are exceptions to the writing requirement under the Statute of Frauds?

• Promissory estoppel

• Partial performance

• Admissions (in legal proceedings)

• UCC exceptions (merchant confirmations, custom goods)

Who lacks capacity to contract? (The “Three I’s”)

• Infants: <18 years old; contracts voidable

• Intoxicated: If unable to understand nature of transaction

• Insane:

  • Adjudged: Contracts are void

  • Non-adjudged: Contracts voidable, restitution required