Contracts final review

Overview

• Discussion centered on contract law concepts, specifically related to quasi-contracts and promissory estoppel.

Key Concepts

Quasi-Contract vs Promissory Estoppel

• Promissory Estoppel:

  • Involves a promise that one party relies on, even if no formal contract exists.

  • Courts use it to prevent unjust enrichment when reliance on the promise occurs despite missing elements such as consideration.

• Quasi-Contract:

  • Arises when one party benefits at the expense of another without a formal agreement, aiming to prevent unjust enrichment even when there was no agreement.

Example Scenario

• Discussed a situation involving a restaurant and a change returned:

  • Scenario: A person receives $50 instead of $5 in change.

  • Questions arise about whether the person must return the money based on:

    • A promise made to return it

    • Unjust enrichment principles

    • No obligation due to a lack of consideration.

  • The agreed answer is due to unjust enrichment, as they should not keep the excess amount given by mistake.

Exam Preparation and Clarifications

Statute of Frauds

• Five categories of contracts requiring written agreements under the statute of frauds:

  • Executor/Administrator contracts

  • Suretyship contracts

  • Marriage contracts

  • Land interests

  • Contracts that cannot be completed in a year

• For UCC (Uniform Commercial Code) contracts:

  • A writing is required only when the total contract value exceeds $500, regardless if it's a single item or total amount.

Merchant Confirmation Exception

• Between merchants:

  • If both parties are merchants, a confirmation of the transaction sent in a reasonable time creates a binding contract even without a prior agreement.

  • Must be sent within 10 days, and once received, if no objection occurs, it binds both parties.

Conditions for Written Contracts

Three Elements Required for Statute of Frauds to be Satisfied:

1. Writing must indicate a contract exists: Must outline the terms adequately.

2. Must be signed by the party against whom the enforcement is sought: Who is being charged must have signed.

3. State a quantity: Details in the contract about how much is being sold or provided.

Mutual and Unilateral Mistakes

• Mutual Mistake: When both parties are mistaken about a fundamental fact, it can invalidate a contract due to lack of mutual assent.

• Unilateral Mistake: Generally does not negate a contract unless it leads to material misrepresentation or calls for a significant adjustment that affects the agreement.

Practical Applications

• Always assess whether the terms of a contract are clearly outlined to prevent misunderstandings.

• Understand the differences between types of contracts (UCC vs Common Law) to properly apply the rules governing them in problem-solving scenarios.

Discussion Points

• Importance of understanding what constitutes reliance and how it impacts legal standing in promissory estoppel cases.

• Analyzing contract disputes based on their formation, breaches, and potential defenses to be offered in court, ensuring to establish whether the basis for those defenses (like statute of frauds) truly stands.