Term
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Definition
| binding agreement between two or more parties that the courts will enforce |
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Term
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Definition
| an agreement that is stated in words, either orally or in writing |
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Definition
| an agreement of the parties is inferred from their contract |
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Definition
| contract where both parties exchange promises |
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Definition
| contract where only one party makes a promise |
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Term
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Definition
| contract has been fully performed by all parties |
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Term
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Definition
| contract that has yet to be performed |
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Term
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Definition
| one that meets all of the requirements of a binding contract |
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Definition
| no contract at all, without legal effect |
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Definition
| a contract capable of being made void |
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Term
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Definition
| a contract for the breach of which the law provides no remedy |
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Term
| 4 Requirements to Form Contract |
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Definition
1) Mutual Assent
2) Consideration
3) Legal Subject Matter
4) Capacity |
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Term
| 7 Ways an Offer Can be Terminated |
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Definition
1) Lapse of Time
2) Revocation
3) Rejection
4) Counteroffer
5) Death/ Incapacity
6) Destruction
7) Subsequent Illegality |
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Term
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Definition
| offer remains open for the time period specified for/ reasonable period of time |
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Term
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Definition
| an offer may be terminated by the offeror at any time before it's accepted |
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Term
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Definition
| communicated refusal to accept an offer terminates it |
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Term
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Definition
| counter-proposal to an offer that terminates the original offer |
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Term
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Definition
| governs most contracts including employment, services, insurance, real property or intangible property; CONSIDERATION REQUIRED |
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Term
| Uniform Commercial Code (UCC) |
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Definition
| governs contract law regarding the sale of goods; where statutory law almost completely replaces common law; NO CONSIDERATION REQUIRED |
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Term
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Definition
| parties to a contract must show they've agreed to enter contract by words or conduct |
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Term
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Definition
| each party must intentionally exchange legal benefit or incur legal detriment as inducement to other party in a contract |
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Term
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Definition
| the purpose of a contract cannot be criminal, tortuous, or against public policy; legality |
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Term
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Definition
| parties to a contract must have legal contractual capability |
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Term
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Definition
| non-contractual promise between promisor and promisee that can be enforced to an extent to avoid injustice |
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Term
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Definition
| non-contractual obligation imposed on a party to ensure fairness and avoid injustice |
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Term
| 3 Requirements of Offer to Form Contract |
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Definition
1) Communication- offeror must offer and offeree have knowledge of it
2) Intent- purpose to make offer and offeree's objective standard of offer
3) Definiteness- clear, defined terms of an offer |
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Term
| Intent: Limitations on Offer |
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Definition
1) Preliminary Negotiations- initial communication where parties request/supply terms of offer but it is not binding
2) Advertising- invites consumers to make an offer to buy a product
3) Auction Sales- invites offers to buy a suggested object |
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Term
| Definiteness: Special Issues |
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Definition
1) Open Terms- Code & Restatement that determines certain ommited but necessary terms
2) Output Contract- agreement for buyer to purchase all of seller's output for stated period
3) Requirements Contract- agreement of seller to supply all of required goods to a buyer |
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Term
| 5 Ways to Limit Revocation of Offer |
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Definition
1) Firm Offer
2) Offer of Unilateral Contract
3) Promissory Estoppel
4) Option Contract
5) Statutory Irrevocability |
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Term
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Definition
| written merchant's offer to buy/sell goods in a that promises it won't be withdrawn; enforceable for up to 3 months |
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Term
| Offer of Unilateral Contract |
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Definition
| offer to form unilateral contract cannot be revoked for reasonable time after performance if it has begun |
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Term
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Definition
| type of counteroffer where offeree pretends to accept offer with variating terms to it |
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Term
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Definition
| positive, unequivocal expression of willingness to enter into contract on terms stated |
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Term
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Definition
| restatement & code state that acceptance of offer is authorized and effective upon dispatch |
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Term
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Definition
| doesn't create contract but serves as a new offer that the offeror must accept |
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Term
| 5 Types of Conduct to Make Contract Invalid |
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Definition
1) Duress: VOID physical; VOIDABLE threats
2) Undue Influence: VOIDABLE
3) Fraud: VOIDABLE
4) Non-fraudulent Misrepresentation: VOIDABLE
5) Mistake: VOIDABLE |
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Term
| Duress: Physical Compulsion |
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Definition
| coercion involving physical force: VOID |
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Term
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Definition
| improper threats or acts, including economic and social coercion: VOIDABLE |
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Term
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Definition
| taking unfair advantage of a person by reason of dominant position based on a confidential relationship: VOIDABLE |
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Term
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Definition
| deceived into entering a contract: VOIDABLE |
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Term
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Definition
| both parties have common but erroneous belief in forming contract: VOIDABLE |
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Term
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Definition
| courts are unlikely to grant relief unless error is known/ should be known to mistaken party |
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Term
| Elements of Consideration |
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Definition
| legally sufficient, bargained-for exchange; each side agrees to give something of legal value in exchange for another legal value |
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Term
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Definition
| value to be exchanged is recognized and legally enforceable |
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Term
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Definition
| obtaining something to which one had no prior legal right |
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Term
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Definition
| doing an act one was not legally obligated or had right to do |
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Term
| Fair/ Balanced Consideration |
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Definition
| is irrelevant; law doesn't protect people from a "BAD DEAL" |
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Term
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Definition
| promise imposes no real obligation on promisor because there are limitations which prevent consideration |
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Term
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Definition
1) Output Contract
2) Requirement Contract
3) Conditional Promise |
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Term
| Preexisting Public Obligations |
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Definition
| public duties imposed by torts/ criminal law that aren't legal detriments or benefits |
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Term
| Preexisting Contractual Obligations |
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Definition
| performance of preexisting contractual duty is not consideration |
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Term
| Modification of Preexisting Contract |
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Definition
| modification that's supported by mutual consideration |
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Term
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Definition
| parties agree to rescind original contract and enter new one |
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Term
| Settlement of Undisputed Debt |
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Definition
| payment of money to discharge undisputed debt, which does not constitute legally sufficient consideration |
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Term
| Settlement of Disputed Debt |
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Definition
| payment of money to discharge disputed debt, which is legally sufficient consideration |
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Term
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Definition
| agreement to pay lesser amount and feeling when money is paid |
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Term
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Definition
| act done before contract is made does not provide consideration |
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Term
Exceptions of Past Consideration:
Promise to Pay Debt Barred by Statute of Limitations |
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Definition
| new promise by debtor to pay debt renews the running of statute for 2nd period |
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Term
Exceptions of Past Consideration:
Promise to Pay Debt Discharged in Bankruptcy |
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Definition
| enforceable without consideration due to bankruptcy debt |
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Term
Exceptions of Past Consideration:
Voidable Promises |
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Definition
| new promise to perform a voidable obligation that has been avoided previously is enforceable |
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Term
| 3 Bargains Violating Statutes |
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Definition
1) Gambling- illegal wagers
2) Criminalized Transactions- drug sales, prostitution, child pornography, etc.
3) Usury- charge higher amount of interest than allowable |
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Term
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Definition
| licensing statute that is intended to protect public against services done by unqualified persons |
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Term
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Definition
| a tax that seeks to raise money |
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Term
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Definition
| unreasonable restraints of trade cannot be enforced |
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Term
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Definition
| contractual provisions excusing a party from liability for its own conduct are disfavored unless there's negligent conduct |
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Term
| Unconscionable Contracts/ Provisions |
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Definition
| unfair or unduly harsh agreements cannot be enforced |
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Term
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Definition
| agreement that requires a person to commit a tort is not enforceable |
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Term
| Exceptions to Enforcing Contracts with Illegal Consideration |
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Definition
permit one party to recover payments
1) Party protected by statute
2) Party not equally at fault
3) Partial illegality |
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Term
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Definition
| Under the age of 18; can get out of contract until they are 18 |
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Term
| Minor Exception for Necessary Expenses |
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Definition
| minor is liable for reasonable value of necessities (clothing, food, shelter) |
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Term
| Person Under Guardianship of Mentally Incompetent |
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Definition
| contracted made by mental person overseeing others: VOID |
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Term
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Definition
| contract entered by mentally incompetent person: VOIDABLE |
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Term
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Definition
| contract entered by intoxicated person: VOIDABLE |
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Term
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Definition
| affirmation of entire contract; 18 year old can do so to make earlier contract valid |
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Term
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Definition
| avoidance of contract; minor can get out of it until 18 years of age |
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Term
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Definition
| requirement that contracts must be made or confirmed in writing |
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Term
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Definition
| applies to promises to pay debts of others as surety: CO-SIGN |
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Term
| Executor-Adminstrator Provision |
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Definition
| applies to promises to answer personally for duties of decendents |
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Term
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Definition
| applies to promises made in consideration of marriage: PRE-NUPS |
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Term
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Definition
| applies to promises to transfer any rights, priveleges, and powers in real property |
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Term
| Land Contracts: Partial Performance & Seller Conveys |
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Definition
Partial Performance- oral contract enforced if partial performance by seller and reliance by buyer
Seller Conveys- oral contract enforced if seller transfers property |
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Term
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Definition
applies to contracts that cannot be performed within one year
Full Performance Exception- makes promise of other party enforceable without a writing under majority view |
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Term
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Definition
| Applies to contract for sale of goods totaling $500 or more |
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Term
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Definition
| admission in pleadings or testimony makes contract enforceable for quantity of goods admitted |
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Term
| Sale of Goods: Specially Manufactured Goods |
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Definition
| once seller starts production of specially manufactured goods, oral contract is enforceable |
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Term
| Sale of Goods: Delivery/ Payment and Acceptance |
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Definition
| validates contract only for goods/ payment that have been accepted |
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Term
| Requirements for Written Agreement to be Effective Under Statute of Frauds |
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Definition
| specified parties, subject matter and terms, each party signs to be charged |
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Term
| Special Compliance Rules for Sale of Goods (UCC) |
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Definition
| must indicate that contract has been made and signed by both parties and specified quantity of goods sold |
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Term
| Oral Contract within Statute of Frauds |
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Definition
unenforceable unless:
1) Full Performance- statute doesn't apply to executed contracts
2) Restitution- gives you back what you lost in value in quasi contracts for benefits
3) Promissory Estoppel- oral contracts will be enforced to avoid injustice |
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Term
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Definition
| substantive, written law that had evidence stated prior in the contract and cannot be altered by oral |
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Term
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Definition
| parties express intention that is the full and written expression of agreement |
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Term
| Oral contract enforceable? |
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Definition
| No, unless there are exceptions |
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Term
| Parol Evidence Rule does NOT apply... |
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Definition
| when a contract is not integrated, there's an error causing contract to be void/voidable, mutual rescission or modification of contract |
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Term
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Definition
| conduct between parties concerning performance of particular contract |
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Term
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Definition
| previous conduct and history between parties |
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Term
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Definition
| practice engaged in by trade or industry |
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Term
| Significance of Importance for Contract Interpretation |
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Definition
1) Express Terms
2) Course of Performance
3) Course of Dealing
4) Usage of Trade |
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Term
| Contract Rule #1- Look at Big Picture |
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Definition
| all circumstances are considered and principle purpose of party is given greatest weight |
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Term
| Contract Rule #2- Writing |
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Definition
| writing is interpreted and read as whole |
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Term
| Contract Rule #3- Specific & Separately Negotiated Terms |
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Definition
| specific and separately negotiated terms are given greater weight than general terms |
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Term
| Contract Rule #4- Terms with Several Meanings |
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Definition
| party who wrote terms with confusing and several terms will generally lose |
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Term
| Contract Rule #5- Preferences of Provisions |
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Definition
Preferences of provisions:
1) Written
2) Typed/ Printed
3) Pre-printed |
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Term
| Contract Rule #6- Determining figures |
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Definition
| figures stated through WORDS will over power figures that are differing |
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Term
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Definition
| voluntary transfer to third party of benefits arising from contract |
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Term
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Definition
| party making an assignment; can hold assignee responsible |
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Term
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Definition
| party that gets the rights to assignment; stands in shoes of assignor |
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Term
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Definition
| party owing a duty to the assignor |
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Term
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Definition
| party that is owed the duty of performance |
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Term
| Requirements of Assignment |
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Definition
| require intent, DOES NOT necessarily have considerations |
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Term
| Revocability of Assignment |
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Definition
| IF given consideration, assignment cannot be revoked with assignee's consent; IF NOT given consideration, can be revoked |
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Term
| 4 Times When Contract Rights Cannot be Assigned |
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Definition
1) assignment that materially increase duty, risk, or burden upon the obligor (EX/ insurance rates)
2) assignment of personal rights
3) assignment expressly forbidden by contract
4) assignment prohibited by law |
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Term
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Definition
| transfer to a contractual obligation to a third party |
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Term
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Definition
party delegating his duty to third party
EX/ FIRST RENTER: sub-leasing |
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Term
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Definition
third party that is delegated the duty of the delagator
EX/ SECOND RENTER: sub-leaser |
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Term
| Duties Cannot be Delegated When: |
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Definition
| duties are personal, non-delegable, or are prohibited by statute/ public policy |
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Term
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Definition
| contract where obligee party substitutes a new promisor for existing promisor, no longer becoming liable and getting "off the hook" |
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Term
| Third-Party Beneficiary Contract |
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Definition
| contract where one party promises to render (provide) a performance to a third party |
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Term
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Definition
| third party intended to receive a benefit from the contract that's a GIFT |
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Term
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Definition
| third person intended to receive a benefit form the agreement to satisfy legal duty owed to her |
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Term
| Rights of Intended Beneficiary |
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Definition
-intended donee beneficiary may enforce contract against the promisor
-intended creditor beneficiary may enforce the contract against promisor AND promisee |
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Term
| Defense Against Beneficiary |
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Definition
| promisor may assert any defense available on third party if action had been brought on by the completion of a promise |
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Term
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Definition
| two parties in contract have no intention of benefiting their third party; cannot sue or enforce any rights |
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Term
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Definition
| event whose happening/ non-happening affects a party's duty to perform under the contract |
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Term
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Definition
| contingency of condition explicitly stated in contract |
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Term
| Implied-In-Fact Condition |
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Definition
| contingency understood to be part of agreement by parties, even though it's not expressed |
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Term
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Definition
| contingency not contained in contract but imposed by law |
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Term
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Definition
| conditions happening at same time |
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Term
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Definition
| conditions before performance is due |
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Term
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Definition
| conditions that happen after performance is completed; event that terminates a duty of performance |
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Term
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Definition
| condition that requires one party to fulfill performance to another party |
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Term
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Definition
| condition that requires event outside control of party and is fulfilled when it occurs |
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Term
| 4 Methods of Discharging Contractual Duty |
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Definition
1) Performance- doesn't do obligation
2) Breach- wrongful failure to perform mandatory duties under contract
3) Mutual Agreement
4) Operation of Law |
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Term
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Definition
| non-performance that impairs injured party rights under contract and may discharge them from further duty |
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Term
| Dependent Covenant of Breaching |
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Definition
| one breaches/ both terminated; only dependent duties are discharged |
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Term
| Independent Covenant of Breaching |
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Definition
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Term
| Prevention of Performance |
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Definition
| interference with or preventing performance |
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Term
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Definition
| incomplete performance that doesn't defeat purpose of contract, doesn't discharge injured party, no material breach |
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Term
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Definition
| inability/ refusal to do performance and expressed before it's due results in a breach allowing the non-repudiating party to bring suit immediately |
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Term
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Definition
| agreement between parties to terminate their respective duties |
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Term
| 7 Ways Contractual Duty can be discharged by Operation of Law |
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Definition
1) Impossibility
2) Destruction of Subject Matter
3) Subsequent Illegality
4) Frustration of Purpose
5) Commercial Impracticability
6) Bankruptcy
7) Statute of Limitations |
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Term
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Definition
| performance of contract cannot be done |
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Term
| Destruction of Subject Matter |
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Definition
| discharges contract if it occurs without the promisor's fault |
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Term
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Definition
| duty discharged if performance becomes illegal/impractical as result of a legal change |
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Term
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Definition
| principle purpose of a contract cannot be fulfilled because of subsequent event |
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Term
| Commercial Impractability |
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Definition
| performance can be accomplished only under unforeseen, unjust harships |
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Term
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Definition
| discharged if debtor obtains an order of discharge by bankruptcy court |
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Term
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Definition
| debt not discharged after statue of limitations has run but creditor cannot bring action against debtor |
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Term
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Definition
| primary theory of damages when valid contract is breached; compensatory and economic damages |
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Term
| Value of Contract Formula |
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Definition
| Formula= Lost Value- Cost Avoided+ Incidental Damages+ Consequential Damages |
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Term
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Definition
| Value of promised performance - Value of actual performance |
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Term
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Definition
| loss or costs that injured party avoids by not having to perform |
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Term
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Definition
| arise directly out of a breach |
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Term
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Definition
| not arising direction out of a breach |
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Term
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Definition
| small sum of money awarded where contract has been breach but loss is negligable |
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Term
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Definition
| set amount, reasonable under circumstances, agreed upon in advance by parties to contract |
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Term
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Definition
| contract damages that place injured party in best position of compensation for loss; sole remedy in promissory estoppel |
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Term
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Definition
restoration of injured party to normal; wrongful party must give something back
-unenforceable contracts
-voidable contracts |
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Term
| Foreseeability of Damages |
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Definition
| potential loss that default party had reason to know of when contract was made |
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Term
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Definition
| damages are not recoverable beyond amount that can be established with reasonable certainty |
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Term
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Definition
| injured party may not recover damages for loss he could have avoided by reasonable effort |
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Term
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Definition
| court order requiring breaching party to provide promised performance; must do what they're obligated to do |
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Term
| 3 Types of Equitable Remedies |
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Definition
1) Specific Performance
2) Injunction
3) Reformation |
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Term
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Definition
| court order requiring a party to do or prohibiting a party from doing a specific act |
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Term
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Definition
| court order correcting a written contract to conform with original intent of contracting parties |
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Term
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Definition
party injured by breach of contract may seek more than one if remedies aren't consistent
-Value of contract: no remedies allowed
Reliance and Restitution: can do both |
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