Elements of Contract

Aunt Olivia Always Takes Cake Right Downtown 

Assent

Offer

Acceptance

Termination?

Consideration

Reliance (if no consideration)

Definiteness 

Elements of enforceability

Soldier Of Fortune Relies Entirely On Cude Cuddly Manatees Playing Dominoes Under Massive Milky Alligators Unwinding 

Both Parties must have objective intent to form agreement  (Lucy v. Zehmer)  If the plaintiff can show that defendant subjectively knew there was no assent that works too

expression by one party of assent to certain definite terms provided that the other party will agree to the same terms.

Notice of acceptance, if it is by promise notice is required RS (2d) 56, if it is by performance  notice not required in most cases RS (2d) 54.

If notice is required must be reasonable effort

                                                                        no consideration, allows one party the opportunity to get out of the contract or not perform duties at any time.  An illusory promise is a statement which appears to be promising something, but which in fact does not commit the promissor to do anything at all

Substitute for consideration

Promissory Estoppel

PERLFI 

Promise

Promissor reasonably Expects the promise to cause an act or forebearance

Promissee acts or forebears out of reliance

Promissee suffers from substantial loss as a result of their reliance

The promise was not informal

Enforcement or partial enforcement is the only way to avoid Injustice 

§33 Cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain, they must provide a basis for determining the existence of a breach and for giving an appropriate remedy.  The fact that many terms are left out can indicate the intention not to create an offer or acceptance.

Not a true contract, but A received services or property which confers a benefit to B

Sale of movable goods

Between merchants or merchants and consumers

Software contracts

ELectricity

Buyers of software must obey the terms of shrinkwrap licenses.

There was contract between software company and buyer, and licenses were effectual–buyer must obey license terms even if on the inside of box

Additional proviso clause is not binding if added after contract is offered & accepted

For arbitration 

Must have written agreement for marriage, sale of land, conveyance of land for more than a year, sale of goods over $500, contracts that can't be completed in less than a year. 

Must have the parties, subject matter, terms and conditions, recital of consideration, signature of at least party being sued.  Can use many different documents to meet this requirement. 

Can also use reliance if sof is not met 

x & y enter into a deal & sends a confirmation which indicates the contract w/ signature + quantity (pursuant to part 1)

10 days after receiving the confirmation it becomes binding unless explicitly objected to

silence indicates assent to K & forfeits the statute of frauds as a defense

Applies only to transactions between parties that have agreed to transact electronically. 

Electronic agreements are just as legitimate as those in writing on paper.   

A signature or contract relating to a transaction may not be denied legal effect, validity, or enforceability solely b/c it’s in electronic form

Contract relating to the transaction may not be denied legal effect solely b/c it has electronic signature or record

no one has to agree to use or accept electronic records or signatures

Exclusions – Art. 2 is not included

Infancy

Mental Illness 

If goods or services have been dissipated, the impaired person or his estate must make restitution for those goods and services.

Executor can void port mortem 

He is unable to act in a reasonable manner in relation to the transaction and the other party has reason to know of this defect

Ortelere v. Teachers Retirement- knew of her mental illness & still let her change her retirement fund to her detriment

presexisting duty rule

duress 

Performance of a legal duty already owed under an enforceable promise is not considered valid consideration- when there is a modification to a contract, need new consideration for going above that pre-existing duty in first contract

No consideration necessary if under the UCC 

Wrongful threat

Precludes party from exercising free will

Threatened party has no other option than to give into the demand

When threat is improper

It threatens crime or a tort, criminal prosecution, use of civil process made in bad faith, breach of duty of good faith and fair dealing under contract.

If contract made under duress, contract is voidable 

Unfair persuasion

Victim must be under domination because of relationship:  attorney client, doctor patient, trustee beneficiary 

Undue influence is unfair persuasion when by virtue of the relationship b/w the parties, the person would assume the ‘influencer’ would act to his welfare & parties assent is induced by undue influence

Voidable 

A contract is voidable if both parties make mistake at time of creation that goes to the heart of the contract

It may not be voidable if risk is allocated to the one who should be the risk of mistake because they are in the position to be aware of it.  

Resitution is proper if voided 

Swinton v. Whitinsville Bank- did not have to tell about termites b/c the burden of discovery is on the buyer not the seller to tell 

Must make a material misrepresentation or half truth and the person must rely on it and suffer damages because of it.

Can rescind and get restitution  

Where one party w/ greater bargaining power dictates terms to the party w/ less power

exculpatory clause in a contract (residential) is unenforceable in certain situations if it offends public policy

If they signed the contract, could they have bargained for exchange or looked elsewhere? 

Unfairness in the bargainning process

Unfair suprise: Tiny print, sop technical an average person wouldnt understand

Element of oppression:

gross imbalance in bargaining power, no real choice in the market if all corporations are using it

necessity v. discretionary purpose for good

unfairness in the content of the agreement

Exculpatory clause – no liability for negligence

Usually courts require both kinds, can void whole contract or the unjust part