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BARBRI - Contract Formation - Coggle Diagram
BARBRI - Contract Formation
Types of K
Law to Apply
UCC Art. 2
All contracts for the sale of goods
Goods = tangible, moveable things
Goods =/= Real estate / services / intangibles
CL
Any contract not governed by UCC
Express
Formed by language (oral/written)
Implied
Formed by conduct
Quasi Contract
When unenforceable contract results in unjust enrichment
Restitution / benefit conferred
RE: Validity
Void
No legal effect
Think crime
Cannot be enforced
Voidable
Can be avoided by defense raised
Think no capacity
Unenforceable
Stat of Lim / Fraud
RE: Acceptance
Bilateral Contract
Exchange of mutual promises
Accepted in any reasonable way
Unilateral Contract
Acceptance by performance
Acceptance ONLY by performance, OR
Offer to the public
Merchant
Regularly deals in goods of kind sold
OR "I am a merchant / expert"
Mutual Assent
Acceptance
Manifestation of assent to terms
Bilateral K
Acpt must be communicated
Silence OK IFF prior dealings
Any reasonable matter
UCC: Acpt by prompt shipping
Mirror Image Rule
Acpt must match offer form
[ Acpt =/= Offer ] = reject/counter
CL Only
Unilateral K
Completion of Performance
Give notice when finished pls
UCC
Battle of the Forms
Mirror Image not required
UNLESS express condition on assent to new terms
K w/ nonmerchant
Add'l terms = proposals unless O/OR express agree
K w/ all merchants
Add'l terms included UNLESS
Material alteration OR
Expressly limits acceptance OR
O/OR Objects (reasonable time)
Nonconforming Goods
Acpt & breach & accommodation
Mailbox Rule
Acpt effective upon dispatch
Option: Effective when delivered
Reject then accept: whichever arrives first
Offer
Termination of Offer
By O/EE
Express rejection
No intent to accept / communicated
Counteroffer
Reject + new offer
Conditional Acceptance = rejection
N/A for Options
Lapse of reasonable time
Effective when received
Cannot reject if already accepted
By O/OR
Effective when received
Limitations
Option Contract
Consideration given for offer to stay open
Merchant's Firm Offer
Merchant
Signed, written offer
assures offer will stay open
< 3 mo
Detrimental reliance
Begin performance (unilateral)
Not revocable after performance begins
But also it hasn't been accepted yet
Express
Implied
By Operation of Law
Death/Insanty
Destruction of subject matter
Supervening Illegality
Effective when occurs
Reasonable expectation that OR wants a K
Elements
Certainty in essential Terms
Capable of enforcement
Identify O/EE
Definite subject matter
If Real Estate
Land & Price Terms
If Sale of Goods
Quantity
If employment / services
Duration
What If...
Missing Terms
Intent to make K
Reasonable basis for remedy
Court can construct K
Reasonable price @ delivery AND
Within reasonable time
Vague terms
Uncertainty cured by acceptance / performance
Communication to EE
Knowledge of offer
Promise / Commitment
Intent to enter contract
Determined by:
Language
Surrounding Circumstances
Prior practice / relationship
Method
Broad Communication
Solicitation of an offer
Advertisement
Invitation for offers
[ No ] Defenses
Legal Incapacity
Can disaffirm contract when 18 (minor)
Necessaries (food, shelter, clothing)
Still liable for restitution if disaffirmed
N/A for loans, insurance, or noncompete
Mental Incapacity
Voidable
Intoxication
Duress / Undue influence
Absence of Mutual Assent
Misunderstanding / Ambiguous language
Mutual mistake re: existing facts
Voidable If:
Basic assumption
Material effect
Did not assume risk
N/A: Mistake of value
Compare / Unilateral mistake
Does not prevent formation UNLESS
Other party knew of mistake
Misrepresentation
Fraud
Voidable if justifiable reliance
Material misrepresentation
Elements
Reasonable person would agree OR
Maker knows person would agree, even if reasonable would not
Intermediary / communication
Absence of Consideration
Illusory promise
No Contract
Public Policy Defenses / Illegality
P unaware of crime but D knows OR
Not in pari delicto OR
Failure to obtain license
Unconscionability
At the time contract was formed
If unconscionable, then:
Refuse to enforce OR
Enforce w/o unconscionable clause OR
Limit application of clause
Inconspicuous risk shifting
Standardized contracts w/ risk shifting
Inconspicuous or incomprehensible
K of Adhesion
Take it or leave it
Courts will not honor if no option to not sign
Exculpatory clauses
Release of liability for own wrongful acts
Against public policy
Limitations on remedies
Unenforceable IFF remedy fails essential purpose
Statute of Frauds
Some agreements must have writing signed by bound party
Party to be charged can raise SoF as defense, otherwise waived
MYLEGS (Covered by SoF)
Marriage
Year (w/in 1)
Cannot be completed w/in one year
From date of agreement
Land
Lease / Easement 1+ yrs
Mortgages
Fixtures / Minerals / Structures
Executor / Admin
Goods ($500+)
Not enforceable beyond quantity of goods in writing
Surety
Promise to pay debt of another
Removing from SoF
K modifications
If modification would not be covered by SoF, writing optional
CL: If K says no oral modification, then LOL whatevs
UCC: If K says no oral, then no oral
Waiver if reliance
Performance
Land
Must show (2/3)
Payment
Possession
Valuable Improvements
Specific Performance Only
Services
Full performance required
Sale of Goods
Specially manufactured OR
Paid for / Accepted
Writing Not Required When
Specially manufactured goods
Requires substantial beginning / commitments
Admissions in Court
Merchants -
Confirmatory Memo Rule
Binds recipient if:
Reason to know confirmation contents AND
Do not object w/in 10 days
Equitable / Promissory Estoppel
Writing Requirement
Identify subject matter of K
Indicate that K has been made
State essential terms
If Employment
Length of employment
If UCC
Specify Quantity
If Land
Price + Land description
Remedies
Reasonable value
Restitution
Consideration
Substitute for Consideration
Promissory Estoppel
Detrimental Reliance
Good faith UCC modification
Elements of Consideration
Bargained-for exchange
Promise induces detriment AND
Detriment induces promise
No past/moral consideration
Act/Forbearance must benefit OR
Legal Value Element
Legal benefit / detriment
past legal duty =/= consideration
UNLESS
New consideration is promised
voidable obligation
duty to third party instead
Unforseen circumstances
Modifications
Must have new consideration OR
Unanticipated circumstance AND fair
UCC: Just needs good faith
Mutuality Requirement