Contract Mind Map
Offer
Acceptance
Genuine Assent
Capacity
Consideration
Legality
Statute of Frauds
The offeror makes the offer.
The person who accepts the offer is the offeree 
The essential terms must be definite and complete, as well as accepted without change.
The offer must be accepted by who it was intended for.
The offer must be communicated to the offeree.
The offer ends after a reasonable amount of time.
The right to withdraw an offer is revocation.
A counteroffer is resulted from an important alteration in the terms of the contract.
An offer can be kept open from an option. An option occurs when the offeree gives something of value to the offeror in return for keeping the offer open longer.
A firm offer occurs with a merchant who states the terms of how long the offer will stay open in writing.
Acceptance is when the offeree accepts a proposal.
To be valid acceptance it must come from who the offer was made to,
Acceptance must match the terms of the offer. as stated in the mirror image rule.
Acceotance must be communicated to the offeror.
Only the intended offeree can accept the offer.
For a bilateral contract acceptance, the promise asked for must be communicated to the offeror.
Silence is not considered acceptance.
For a unilateral contract acceptance, the offeree often shows their acceptance by fulfilling the obligations of the contract.
Acceptance can be done in any way, for example, in person, through text, email, etc. unless the offeror asks for a specific method.
Acceptance becomes effective when sent by the same way used for the offer, or by a faster way.
Oral acceptance is effective once the words are spoken.
Acceptance by mail is effective when properly posted.
The offeror may claim that acceptance is not effective until it is received.
Genuine assent is a valid, true, and complete agreement, but often is not present in court due to duress, undue influence, mistake, misrepresentation, and fraud.
Without genuine assent, a contract is voidable.The injured party can escape their contract and get back what they put into it through recission.
The avoidance must be done once it is found out that there is no genuine agreement before the contract is ratified, meaning before you show you want to be bound by the contract.
Duress happens when one party uses a wrongful threat to gain agreement to a contract.
This includes threats to involve themselves in something illegal, threating to report a crime to get the criminal to create a contract, threatening to sue for an unrelated reason, using economic power as a threat, etc.
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Undue influence when someone involved in the contract uses their the other's trust in them is used against the other. The injured party does not have their free will. Undue influence is defined by the relatrionship of the party's and wrongful persuasion.
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For undue influence to take place, there must be some kind of relationship of trust, confidence, or authority. It does not need to be a formal relationship.
The aspect of unfair persuasion is seen in the terms of the contract. Persuasion can occur when one party strongly depends on another. The extent of the unfair persuasion is determined by the court.
Mistakes can be bilateral or unilateral. A unilateral mistake occurs when only one party is mistaken with the facts of a contract. A bilateral mistake occurs when both parties are mistaken about the facts of a contract. When a bilateral mistake occurs, the contract is void. When the mistake is about the law of the contract, it remains valid.
These facts thta change a parties opinion on the contract are material facts.
Misrepresentation can be innocent or fradulent. Statements are considered misrepresented if the untrue statement is fact or there is active concealment, the statement is fraudulent or material to the transaction, and the victim relied on the statement.
The statement has to be factual and not opinion, either a past or existing fact. It also cannot be the basis of misrepresentation. When an expert expresses an opinion, it is still seen as a statement of fact for misrepresentation. Active concealment covers up the truth.
The misrepresentation must be done on purpose or done in a reckless manner. There also must be proof of the injury to be considered fraud.
Fraud is based on the aspect of misrepresentation and must fulfill the requirements for a recission to be given. There must be intentional misrepresentation and proof of injury.If fraud can be proven, the injured party can receive actual damages and punitive damages.
Consideration is what a person must receive to make a promise legally binding.
Each party must make a promise, perform an act, or agree not to do something.
This promise, act, or forbearance must have one in return from the other party.
There must be legal value to the exchanges in the eyes of the law.
A gift is a transfer of ownership without receiving something back.
The gift becomes ;legally binding when the donor purposefully transfers ownership to the donee and the donee expresses agreement.
A person who makes the promise is the promisor, the person who the promsie is made to is the promisee.
Legal value is when there has been a change in a party's legal position due to the contract.
Equal economic value and adequacy is not necessary for consideration if there is genuine agreement.
Nominal consideration is a token amount as consideration.
To be considered consideration, the promise must be legally binding. If there is a clause to escape obligation, it is considered illusory.
Agreeing to buy all of a producer's production is called an output contract
Agreeing to supply all of the needs of a buyer is called a requirements contract. These contracts are recognized as valid with consideration.
A promise to do a pre-existing duty is not valid consideration.
Liquidated debt occurs when parties agree there is debt present and they agree on the amount of debt.
Accord and satisfaction is a settlement to unliquidated debt, in which the parties disagree on the amount of debt. They compromise on an amount (accord) and the debtor pays the agreed amount (satisfaction).
Another settlement is a discharge agreement called a release, in which a victim of a tort agrees to discharge the other from liability. This is considered unliquidated.
When a group of creditors accepts less than they are entitled to to avoid a claim of bankruptcy from the debtor, this is an agreement termed a composition with creditors.
Something that already has been performed cannot be used as consideration.
When Consideration is Not Necessary:
Promises to Charity and Non-Profit Organizations: Completed gifts or pledges to pay can be enforced without consideration as long as the charity has a specific use for the pledge and shows reliance upon it.
Promises Covered by the UCC: Under the UCC, a firm offer done by a merchant is enforceable without consideration. The UCC does not require new consideration for a change to a pre-existing contract.
Promises Barred from Collection by Statute: A statute of limitations is determined by the individual states and sets a time limit for bringing a lawsuit. Some states enforce a promise to pay a claim after the statute of limitations has passed, even without consideration.
Promissory Estoppel: The law can prevent injustice using the doctrine of promissory estoppel. This prevents people from saying in court they did not receive consideration. Promissory Estoppel can be used if: the promisor could have known the promisee would rely on the promise, the promisee actually does rely on the promise, the promisee would suffer actual loss without the promise, and injustice could only be avoided by enforcing the promise.
Contractual capacity is the ability to understand the consequences of a contract. All it requires is the ability to understand.
Minors, the intoxicated, and the mentally insane have special rights due to a lack of contractual capacity.
Minors are considered under the age of majority to enter a contract (in most states the age of majority is 18). Those undet the age of majority are considered minors. Their minority ends the day before the birthday of the age of majority.
The contracts of those without capacity are often voidable. The protected people are given the right to disaffirm their contracts.
When necessaries like food or clothing are purchased by those lacking capacity, they must pay a reasonable price for the goods even if the contract is disaffirmed.
Minors' contracts can be disaffirmed during minority or a reasonable time after reaching majority. After reaching majority, the power to disaffirm is lost after ratification, acting as if they mean to be bound by the contract.
Minors can be bound to contracts if they are emanipated, which is the severing of a parent child relationship, through early emanipation or when they reach the age of majority. The contractual capacity of emancipated minors varies by state.
Contracts of the mentally ill are often void and have full lack of capacity or voidable due to their little ability to understand.
If a person's level of intoxication is high enough, they temporarily lose the ability to contract and their capacity.Many courts are hesitant in considering these contracts voidable.
Those who work in businesses have the capacity to bind the organizations to contracts as this is whithin their scope of authority, when the organization aiuthorizes them to be responsible for this.
To disaffirm a contract, anything of value that the minor received must be returned and they can get back everything they gave to the other. Though, in most states minors can still get back what they gave without returning anything or returning damaged goods.
Contracts that cannot be disaffirmed in most states are those approved by the court, such as professional sports contracts, major commitments like enlisting in the army, banking contracts, insurance contracts, business-related contracts, the sale of property, and renting apartments.
In most states, a minor who lies about their age may still disaffirm their contract but they can be held liable for fraud and misrepresentation.
Agreements involving contracts for illegal actions are most often void and cannot be enforced. .
Illegal lotteries are an illegal agreement and consist of gambling not regulated by the state, therefore bets and wagers on unpredictable events are not court enforceable,
Agreements in which the rate of interest surpasses the specified maximum are considered usurious and not enforceable.
Agreements involving discrimination or violating anti-discrimination laws are considered unenforceable in most states.
Agreements which obstruct justice through paying non-expert witnesses to testify, bribing jurors, compounding a crime, etc. are illegal and not enforceable.
Agreements made when one party does not have their competency license for their occupation cannot be enforced. Though, a revenue license is not necessary for contracts meant to raise revenue.
The law encourages marriage, so when agreements harm or bother a marriage or potential marriage, the agreement is illegal.
Contracts that restrain trade through not encouraging competition by fixing prices and rigging bifds are unenforceable and illegal, as well as dividing markets between competitors.
Agreements not to compete are illegal if they have an unreasonable time period, geographic limitation, or protect the employer's interest due to the limitation.
Courts will enforce these illegal agreements if a party or both were innocent in the wrongdoing, it can be enforced or restituted.
Courts can enforce the legal parts of a contract and not enforce the illegal parts of that same contract.
The Statute of Frauds includes contracts required to be in writing to be enforceable.
An executed contract is one that has been completely performed by both parties. The contract cannot be reversed, even if it was not in writing.
An executory contract is one that has not been fully performed and something must be done by one or both of the parties, if this contract is within the Statute of Frauds and is not in writing it is not enforceable.
A quasi-contract is when there is a missing element of the contract.
The required writing must include the names of the parties, a description of the subject, the price, the quantity, a signature, and any other essential terms.
Contracts that sell tangible goods for $500 or more must be in writing to be enforceable.
A contract to sell real property and transfering titles or ownership of this property must be in writing.
Contracts that will take longer than one year from the time the contract was made to be performed must be in writing.
Contracts to pay someone's debt, pay a debt, or answer the debts of an estate, like collateral promises must be in writing. The main purpose rule is an exception.
Contracts in which marriage is used as consideration must be in writing to be enforceable, and if breached the victim can sue for damages.
The Parol Evidence Rule allows words spoken before the final signing and is inadmissable in court.