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namenorg9 contracts
| Question | Answer |
|---|---|
| 4 methods to bind a promise | 1)consideration 2)moral obligation 3)promissory estoppel 4)sealed contracts |
| 4 elements of a gift | 1)intention to give on the part of the donor 2)delivery to the donee 3)termination of the donor's dominion over the subject of the right 4)dominion in the donee. |
| is a promise to make a gift enforceable? | NO |
| define legal detriment | any time you take on a obligation that you are not legally required to take on |
| can past consideration bind a promise? | NO |
| are promises to pay pre-existing or discharged debts valid? | YES, but only if they are in writing |
| can infants and mentally handicapped promise not to void a contract? | YES |
| is moving to receive a gift sufficient legal detriment? | NO |
| are promissory notes enforceable? | YES, if it contains all the elements of a contract |
| material benefit rule: | 1)a promise; 2)made in recognition of a prior benefit; 3)the benefit was not a gift; 4)enforcement of the promise is necessary to prevent injustice; and 5)promise is not disproportionate to benefit. |
| promissory estoppel rule: | 1)promise; 2)promisor should reasonably expect action/forbearance from promisee; 3)promise does induce such action or forbearance; 4)injustice can only be avoided by enforcing the promise; |
| definition of an offer: | a promise conditioned on acceptance |
| what transforms an offer into a contract? | valid acceptance |
| what is required for valid acceptance? | common law: mirror image rule- the offeree's acceptance is the mirror image of the offer (same language). |
| 4 ways to terminate an offer: | 1)revocation- can revoke any an offer any time before acceptance 2)rejection- rejection by offeree terminates the offer 3)expiration- the offer will expire when the stated term ends (or reasonable term) 4)death of an offeror |
| how can a solicitation be turned into an offer? | if the offeree repsponds with words of acceptance |
| if it is unclear whether the offer is for a bilateral or unilateral contract, who gets to decide? | the offeree |
| advertisements are generally not offers, unless they are: | 1)clear, definite, and explicit 2)leave nothing open to interpretation 3)must include language of limitation 4)if it is clear that the offeror is joking, then it is not an offer. |
| are "prove me wrong" offers valid offers? | YES |
| do you need to provide notification to accept an offer? | NO, unless you want them to be responsible to keep their promise. |
| can silence equal acceptance? | generally NO, only when the oferee intends to accept the contract with silence or when the custom of practice makes sense. |
| what are the rules for revoking an offer? | 1)bilateral rule: can be revoked any time before acceptance (or before full performance in unilateral contracts) 2)restatement: there is a implied promise not to revoke a unilateral contract once there has been commencement of performance. |
| does promissory estoppel apply to subcontractor bids? | NO, offeror can revoke at any time before acceptance. |
| subcontractor makes two offers to general contract when giving a bid | 1)express offer= the bid 2)implied offer not to revoke |
| • four ways for general contractor to unbind subcontractor's implied option not the revoke | 1)shopping the bid 2)unreasonably delay acceptance 3)mistake 4)subcontractor can expressly reserve the right to revoke in its bid. |
| what is the test for indefiniteness of a contract? | 1)silent as to a material term 2)parties purport to agree but fail 3)Parties agree to agree |
| a sufficient definite term will allow a court to: | 1)determine if a breach has taken place 2)fashion a remedy |
| define illegal contracts | contract whose formation or preference is criminal, tortious or against public policy |
| consequences of illegal contracts | 1)as a general rule, illegal contracts are void. neither party may enforce 2)generally, there is no remedy, the court leaves the parties where it finds them |
| contract amendments require: | -offer -acceptance -consideration -sufficient definiteness |
| pre-existing duty rule | if you already have a legal or contractual obligation to do something, that cannot be fresh consideration |
| UCC 2-209 | fresh consideration is not required to bind a contract amendment as long as promisee obtained the new promise in good faith |
| NY approach | new promise needs to be in writing, signed by the party against whom enforcement is sought. |
| are oral contracts enforceable? | YES, except for the statute of frauds |
| what is included in the statute of frauds? | 1)suretyship contracts (cosigner) 2)executor-administrator contracts 3)contracts made in consideration of marriage 4)the sale of real property 5)one year contracts 6)contracts for the sale of goods over $500 |
| define one year contracts | performance CANNOT be completed within one year of its formation |
| can infants disaffirm contracts? | YES, unless otherwise provided by statute or public policies |
| when is someone no longer an infant | the day before they turn 18 |
| what is a necessary, how dies it impact out analysis? | food, clothing, shelter that are necessary to live. Infant must pay the necessary value of a necessary. |
| what is the remedy for an adult in a disaffirmed contract with an infant? | replevin- you get back anything that can be returned |
| can an infant disaffirm a contract after they have become an adult? | YES, for a reasonable amount of time |
| define executory contract | one that has not yet been fully performed |
| when is mentally incompetent enough to void a contract? | 1)executory contracts or restitution is possible 2)non-executory contracts and restitution is not possible |
| what is the cognitive test? | applies in all 50 states -do you understand the nature and consequences of your transaction? -designed for severe mental retardation |
| what is the volitional test | can the person entering into the contract control their behavior? -must be mentally incompetent at the time of contracting |
| can you enter into a contract drunk | it will likely be considered insufficient consideration. |
| define duress (2 part test) | any wrongful act or threat which overcomes the freewill of a party |
| what is the threat was purely economic? | look at whether the reasonable person would have been overcome, otherwise it is subjective and depends of that specific person was overcome. |
| define undue influenece | unfair persuasion of a party who is under the domination of another person (like trusting someone to know better than you and they take advantage) |
| when entering into a contract, do you have to tell the other party everything important it should know? | NO there is no general duty to disclose when entering into a contract |
| can you lie when entering a contract? | NO |
| 5 prong test for misrepresentation (duty to disclose) | knowing or reckless misrepresentation of a material fact when a duty to disclose exists by the other party to the contract on which the victim reasonably relies and which causes damages. |
| if a clause in a contract is unconscionable, the judge can: (3 things) | 1) refuse to enforce the contract 2)strike the unconscionable clause 3)rewrite the unconscionable clause to make it reasonable |
| procedural unconscionability | 1)unfair surprise 2)extremely unequal bargaining power |
| substantive unconscionability | no test- a deal that no persona would make in their right mind |
| pre-injury personal release forms, legal? | potential victim can waive the right to sue for negligence, but not gross negligence (ski resort) -there are also exceptions: -common carries cannot get passengers to sign this, for example. same with landlords. |
| are non-compete agreements legal? | NO, exceptions: 1)sale of business 2)employment contracts |
| 2-prong test to tell is non-compete is enforceable: | 1)it is necessary to protect recognizable business interests in good will or trade secrets, and; 2)the restrictions in the agreement are reasonable related tot he business interest being protected. |
| parol evidence rule (restatement, 3 steps: | 1)is there an integration 2)if there is an integration, is it partial or complete? 3)if there is an integration, is parol evidence admissible? |
| is parol evidence admissible? if so when? | YES, if there was partial integration and the parol evidence is complementary not contradictory NO, if there was complete integration |
| exceptions to the parol evidence rule (all these are admissible) | 1)evidence to show duress or joking 2)scrivener's error (typo) 3)sworn testimony |
| what is the difference between substantial performance and conditioned promises | if a promise was conditioned, the condition must be met 100%. if there was no condition, was the promise substantially performed? if so, you can only sue for nominal damages unless there were actual damages caused by the breach. |
| what if it is unclear if something was a promise or a condition? | it will most likely be found to be a promise because the court can use a balancing test (substantial performance test) |
| what is an express condition | a condition that expressly states that it is a condition |
| what is an implied in fact condition | if the wording is not clear enough, they don't use the basic wording, but the custom and practice cause them to believe that it is a condition |
| what is a constructive condition? | implied in law conditions, the parties did not agree to a condition, but there should be a condition |
| two different substantial performance tests: | 1)essential performance test 2)hornbook test-> a)the sooner the breach, the more likely it was material b)a willful breach is more likely material c)a quantitatively serious breach is more likely to be considered material. |
| if a judge finds a contract is ambiguous, what type of extrinsic evidence is admitted? (6 things) | 1) dictionary definitions 2)expert testimony/industry standards 3)government regulations 4)economics 5)pre-contract negotiations (PE exceptions) 6)post-contract behavior |
| if there is still ambiguity, who wins the case? | ◦ the ability to draft the contract is a huge benefit, if there is an ambiguity, it will go against you because you were in control of how it as written. |
| what is the california approach to ambiguity? | -consider the evidence before the ambiguous call. the judge considers the extrinsic evidence to determine if there is ambiguity. if there is not ambiguity after considering the evidence, then the evidence is not admitted. |
| promises must be kept through heavens fall, except for there two exceptions | impracticability and frustration of purpose |
| 3 scenarios of impracticability: | 1)promise of person services rendered impracticable by service provider's death or incapacitation 2)promised performance becomes unlawful because of a change in the law 3)destruction of the subject matter of the contract |
| define anticipatory repudiation | party renounces a contractual promise before the time for performance |
| what are the 3 ways to repudiate? | 1)statement of intent to breach (must be clear and definite) 2)transferring the subject of the contract to someone else 3)other acts that demonstrate party will not perform |
| in repudiation, at what point does breach occur? | breach occurs at the time of repudiation, but to sue plaintiff must be ready, willing and able to perform at the time of breach. |
| what are expectancy damages? | damages that give the victim the benefit of the bargain |
| what are reliance damages | damages designed to but the plaintiff back in the position they were in before the contract had been made |
| what are restitution damages? | damages designed to allow the victim to recover any benefit conferred on the "other" party |
| what is the preferred method of calculating expectancy damages when the breach of contract requires fixing something? | cost of completion, exception: if the cost of completion involves economic waste, the courts may use diminution in value. |
| define economic waste | 1)subject matter of the remedy is a physical structure 2)remedying the defect requires substantial destruction of a perfectly good physical structure |
| what is the exception to the economic waste exception? (hancock approach- plaintiff may recover the cost of completion even if grossly wasteful if:) | 1)physical structure has special significance to the plaintiff and plaintiff is more likely than not to remedy the defect; or 2)physical structure is dangerous (or unusable) and plaintiff is more likely than not to remedy the defect |
| define specific performance | an order compelling a defaulting promisor to perform |
| specific performance is granted when (2) | 1)when legal remedies (damages) are inadequate 2)when plaintiff can show irreparable injury will result if equitable relief is refused |
| 3 factors that courts use to determine if legal remedies are adequate | 1)will specific performance present an undue administrative burden on the court? 2)is the subject matter of the contract unique? (can an alternative be purchased with money) 3) would a grant of specific performance offend public policy? |
| define liquidated damages | when parties contractually agree to remedy |
| are liquidated damages clauses enforceable? | YES, unless they amount to a penalty, in which case they are unenforceable |
| what 3 requirements must a LD clause meet to be enforceable? | 1)parties must intend to provide for damages and not a penalty 2)anticipated injury caused by breach will be uncertain or difficult to quantify 3)stipulated sum must be reasonable |
| should the court look at the reasonableness of the LD clause at the time of contract, or at the time of breach? | Either. whichever benefits the non-breaching party (can significantly impact analysis) NOTE: even when the reasonableness is at the time of contract, if there are no damages at the time of breach, the courts will say that the LD clause is unenforceable. |
| what are the two types of reliance damages? | 1)essential= those made in preparing to perform the contract or in actually performing 2)incidental= those made by plaintiff because he anticipated that the contract would be performed. (ONLY SOME JURISDICTIONS, NOT MAJORITY RULE) |
| loss offset rule: | if the plaintiff was in a loss-making contract, deduct those losses from their reward. |
| two types of restitution damages: | 1)as a remedy for a material breach of contract 2)restitution brought in quasi contract |
| what is quasi-contract? | 1)adult sues infant for reasonable value of necessaries 2)contract deemed unenforceable after partial performance 3)breaching party sues non-breaching party for net benefits conferred. |
| how do we value the services provided? (4) | 1)objective value (free market value) of plaintiff's services 2)subjective value of plaintiff's services to defendant 3)plaintiff's cost to provide services 4)contract price multiplied by percent completion |
| what damages can breaching parties get? | sometimes willful breachers get nothing, but in some jurisdictions they can sue for restitution |
| does the plaintiff have a general duty to mitigate damages? | YES, they are obligated to make a reasonable effort |
| what constitutes reasonable? | plaintiff is not required to take efforts that involve undue risk, burden, or humiliation. |
| formula for awarded damages (mitigation) | awarded damages= recoverable damages+cost of reasonable efforts to mitigate-amount mitigated(regardless of whether successful)-amount that could have reasonably been mitigated(but was not) |
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namenorg9
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