Mutual Assent

Consideration

No defense Exits

Mutual assent requires

(2 things)

Offer

Acceptance

Three elements of an offer?

Manifestation of an intent to enter into a contract

A contract with definit and certain terms

Communicated to an offeree

expression of a promise, undertaking, or commitment

Different from preliminary negotiations

Definite/ certain terms for:

real estate transactions requires

sale of goods

employment

id of land and price terms

the quantity be certain, or capable of being made certain

the duration of employment be specified

Termination of an offer

Two catagories of termination of an offer:

Termination by parties 

termination by operation of law

Termination by offeree are called

and by offeree... 

Revocation: directly communicates the revocation or acts inconsistently with the continued willingness to maintain the offer and offeree receives correct information of this from a reliable source

Rejection:  may reject by expression of by counteroffer, becomes effective when received by the offeror.  Also by lapse of time, if failes to accept with in time limit

Termination by operation of law, name the events that will terminate an offer by law

(3)

Death or insanity of either party

destruction fo the purposed contract's subject matter

Supervening illegality

Acceptance: valid acceptance of a bilateral contract requires:

(3)

an feree with the power to accept

Unequivocal terms of acceptance

Communication of acceptance

Communication of acceptance, 

acceptance by mail is effective at --- 

Limits on the mailbox rule

(3)

 the moment of dispatch 

- Does not apply if the offer stipulates that acceptance is not effective until received or is an option contract

- if rejection is sent and then an acceptance, whichever arrives first is effective

- if acceptance is sent, and then a rejection, the acceptance is effective unless the rejection arrives first and the offeror detrimentally relies on it.

Consideration

involves two elements

a bargained for exchange

for something of legal value.

Two tested examples of something that is not a bargained for exhange

Gift

Past (or Moral) consideration

No, because there is no detriment to the person making the promise

Consideration substitutes

(2)

Promissory estoppel

Detrimental reliance

Defenses that will nullify a contract

(7)

Mutual mistake

Unilateral mistake

Mistake by intermediary

Latent ambiguity mistakes

Misrepresentation

Lack of consideration

Illegality

Lack of capacity as a defense in contacts

(3) TYPES

persons uder 18 can not contract

Intoxicated persons may lack capacity if the other party knows

Contracts induced by duress or coercion

Defenses concerning enforcement of a contract: 

2 main issues

Statute of Frauds

Unconscionability

Statute of Fraud 

Requirements

In writing if

Marriage promise in consideration of marriage

Y year, service contract beyond a year

L land, promise creating interest in land

E executor promise to pay obligations of estate out of his own funds

G goods, sale of goods for more then $500

S surety, promises to answer for the debt of another

Contracts and third party: 

Difference betwen intended and incidental beneficiary

Only intended beneficiaries have contractual rights

Look to see if the beneficiary is identified in the contract, receives performance directly, and has some relationship with the promisee to indicate intent. 

Contracts and third parties

Third party enforcement

A 3rd party can only enforce a contract when his rights have vested.  This occurs when he (1) manifests assent to a promise (2) brings a lawsuit to enforce the promise, OR (3) materially changes position in justifiable reliance on the promise. 

Contracts: 3rd partys

Assignment of rights

What is necessary for an assignement?

Third Parties assignments

What rights can be assigned

Third parties assignments, Contracts

Is Third party assignments revocable or irrevocable

An assignment for consideration is irrevocable

An assignment not for consideration is generally revocable. 

Gratuitous assignment irrevocable if (1) obligor has already performed OR assignee can show detrimental reliance on the gratuitous assignment

Revocable gratuitous assignment may be terminated by

(3)

(1) death or bankruptcy of assignor 

(2) Notice of revocation by the assignor to the assignee or the obligor

(3) the assignor taking performance directly from the obligor

(4) subsequent assignement of the same right by the assignor to another

Delegation of Duties

Third Party Contracts

What is it and how do you do it

A promises to perform for B and B delgates his duty to C

The delegator must manifest a present intention to make a delegation.  No special fomalities, can be written or oral

Contract Terms

How is the contract construed

Construed as whole and according to the plain meaning of the words

If inconsistency between probisions, written or typed prevail over printed ones.  Ambiguities are construed against the party preparing the contract. 

Consider Parol Evidence

Evidence of prior or contemporaneous negotiations and agreements that contradict, modify, or vary contractual terms is inadmissible if the written contract is intended as a complete and final expression of the parties. 

Merger clauses strengthens this presumption

Evidence of the following is admissible

Formation defects (fraud, duress, mistake, illegality)

Existence of a condition precedent to a contract

Parties intent regarding ambiguous terms

Consideration Problems

a prior valid agreement which by mistake is incorrectly reflected in the writing

A collateral agreement

Subsequent modifications

Performance

Ask Two questions

Has a duty to perform services arisen?

Has the duty to perform been discharged?

Distinction between promise and condition

Contract - Performance

Three types of Conditions

-Contract Performance- 

Condition precedent

Condition concurrent

Condition subsequent

Excusing the condition to perform 

4 ways

Anticipatory repudiation

Substantial performance

Divisibility of contract

Waiver or estoppel

Anticipatory repudiation

what four alternatives does the nonrepudiating party have?

(1) treat the contract as totally repudiated and sue immediately

(2) suspend his own performance and wait until the performance is due to sue

(3) treat the repudiation as an offer to rescind and treat the contract as discharged

(4) ignore the repudiation and urge performance.

When can a duty be discharged?

6 situations

Impossibility

Impracticability

Frustration of purpose

Rescission

Novation

Accord and satisfaction

Material breach

Minor breach