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Common Law contracts include:
- - Real estate
- - Services
- - Employment
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Common law contracts are governed by:
- Majority rules
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Six elements of a contract (OACPLC):
- - Offer
- - Acceptance
- - Consideration
- - Proper form
- - Lawful object
- - Two or more Competent parties
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Offers have 3 elements:
- - Must be seriously intended
- - Must be communicated by words or actions
- - Must be definite in terms (including price)
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Advertisements and price quotes are usually:
- NOT offers, just invitations to deal
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Acceptance have 3 elements:
- - Must be unconditional (comply with all offeror's terms or a counteroffer)
- - Must be communicated by words or actions
- - Can only be accepted by the party to whom it is made
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The following are ways to end offers only when they are received:
- - Counteroffers
- - Rejections
- - Revocations
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Option contracts are:
- Irrevocable, since the party pays consideration to keep the offer open
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In UCC sales Firm Offers are irrevocable without consideration if made by:
- Merchant, in writing and guaranteeing the offer will be held open
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The following events end offers immediately:
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Under the mailbox rule, an acceptance is valid when sent if properly addressed and:
- - Offeree uses the express means of communication (offeror said to use)
- - Or any reasonable and faster means
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A bilateral contract is:
- A promise for a promise
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A unilateral contract is:
- A promise for an act (a reward)
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Consideration is:
- - Giving up of a legal right
- - must be present for both parties
- - must be mutually bargained for and legally sufficient
- - there is no requirement that consideration be of equal value
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Two cases where consideration is not present:
- - Past consideration
- - No consideration when party is already contractually obligated to perform
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Promissory Estoppel is present when:
- Someone relies on a promise that lacks consideration and changes their position.
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An illegal contract is:
- Void and unenforceable in court
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Six types of contracts requiring some kind of writing to be enforceable (GRIPE + MARRIAGE)
- - Goods for $500 or more (must contain quantity)
- - Real estate contracts
- - Contracts Impossible to perform in 1 year
- - Promise to answer for the debt of another (surety/guarantor)
- - Executor's promise to be liable for the debt of an estate
- - Marriage contracts
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Exceptions to the statute of frauds where no writing is required for GRIPE+M contracts:
- - If contract is fully performed by both parties
- - Contract impossible to perform in one year and one party has fully performed
- - Oral real estate deals if the buyer is in possession and has made a substantial down payment or renovations.
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If a minor enters in a contract, they may disaffirm the contract when:
- - While being a minor
- - At a reasonable time after becoming an adult
- - By returning what they possess
- - Cannot disaffirm a real estate while a minor, but can do so a reasonable time after becoming an adult
- - If lied about age, can disaffirm the contract but will be liable for torts
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Insane individuals can disaffirm contracts, but once adjudicated:
- All future contracts are void
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Most mistakes in a contract have no effect, except:
- - Mutual mistakes of a material fact (void contract)
- - Material unilateral mistakes, one party may disaffirm only if the other party knew or should have known about the mistake.
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Duress is:
- Forcing someone into a contract by threat of violence, economic destruction or criminal action. Makes contract voidable.
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Undue influence is:
- Using a position of love, confidence, or affection to overcome another's free will in contract. Makes contract voidable.
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If fraud is present in a contract, an injured party can chose to:
- - Rescission of contract (cancellation and restoring former positions)
- - Tort remedy (accept contract and sue for money damages)
- - IF a SALES contract, party may rescind and sue for money damages.
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When all fraud elements are met EXCEPT Scienter or Reckless disregard, there is:
- Innocent misrepresentation
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When there is Innocent Misrepresentation, the injured party may:
- Only rescind, not sue for money damages.
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Evidence inadmissible under the Parole Evidence Rule includes:
- - Oral or written who contradicts the written contract
- - Concerning anything that took place prior or at the time of the writing of the contract
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Admissible evidence under the Parole evidence rule includes (FAME):
- - Any evidence that shows Fraud or illegality
- - Any evidence after the writing
- - Any evidence of Mistakes
- - Any evidence to explain the writing or clear up ambiguities
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Third party beneficiaries include:
- - A donee beneficiary (can only sue original promisor)
- - Creditor beneficiary (may sue any party if there's a breach)
- - Incidental beneficiaries (no rights under contract)
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Four types of contracts cannot be assigned or delegated (PIPI):
- - Personal service contracts calling for special skill
- - If it would materially Increase risk or alter performance
- - If Prohibited by contract law
- - Cant assign Insurance contracts
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When a contract is assigned, the assigned gets:
- All rights and liabilities of the assignor, but assignor remains liable
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If a buyer assumes a mortgage, the buyer/seller:
- Are both liable for the mortgage
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If a buyer purchases "subject to" a mortgage, legally:
- - The buyer is not liable for the mortgage
- - Seller is only one liable for the mortgage
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Contract duties can be discharged by:
- - Novation
- - Material breach (such as prevention of performance, anticipatory breach, doctrine of substantial performance)
- - Impossibility of performance (death of party or destruction of subject matter)
- - Accord and Satisfaction
- - Statute of limitations (does not discharge, but percents judicial remedies=
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Statue of limitations are:
- - For contracts usually 6 years from breach
- - For sales 4 years from breach
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An anticipatory breach is when a party:
- States they will not perform before the time of performance
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The Doctrine of Substantial Performance involves:
- - An unintentional but minor breach
- - Breaching party may still recover but subtract damages for the minor breach
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Contract remedies include:
- - Compensatory Damages
- - Specific performance
- - Liquidated damages
- - Recission
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