Contracts Rules 1

• Offer
• Acceptance
• Consideration
• No valid defenses

Unsolicited and voluntarily sent goods are considered unconditional gifts in NY.

Communication that gives power to reecipient to conclude contract by acceptance. Must show present intent to contract, and must include essential items in definite terms.

• Lapse of time in offer
• Death or mental incapacity of offeror
• Destruction or illegality of offer's subject matter
• Revocation - part performance on unilateral contract bars revocation

A UCC offer to buy or sell goods is irrevocable if:

• offeror is a merchant
• there are assurances that the offer will remain open
• the assurance is contained in an authenticated writing

Mirror image rule: Acceptance must mirror the offer. Modifications act as a rejection and new offer.

UCC Battle of the forms rule:

• Between non-merchants, or merchant and non-merchant - Acceptance need not mirror offer. Modifications are treated as a proposal for addition to the contract that must be accepted or rejected separately by the original offeror.
• Between merchants - Knockout rule applies

Promise of reward for finding lost property will be enforceable if in writing or otherwise caused to be published.

Option: If offer is made in writing, signed by offeror, and contract specifies offer is irrevocable, then may not be revoked during the stated time period. Consideration is not required to keep offer open. Does not apply to offers by merchants to buy or sell goods.

Legal detriment that was bargained for. Must be something of substance

Includes:

• promise for promise to do something
• promise for promise to refrain from doing something
• promise for performance
• promise to refrain for promise to do.

NY Rules:

• Warranties on transfers of real property do not need to be supported by consideration if written into the deed or conveyance and recorded.
• Past or executed consideration will be valid basis for contract if the past consideration is (1) expressed in writing, (2) proved to have been given or performed, and (3) would been valid consideration at the time given or performed.

Promise to pay debt barred by statute of limitations

Promise to perform a voidable duty

Promise to pay a fixed amount for benefits received

Promissory estoppel

Enforces a promise not supported by consideration where:

• promisor should reasonably expect promise to induce action on part of promisee
• promise does induce such action
• injustice can be avoided only by enforcement of the promise.

• Mistake
• Misunderstanding
• Misrepresentation (fraudlent or nonfraudulent misrepresentation or nondisclosure)
• Undue influence (special or confidential relationship)
• Duress

• Lack of capacity (infancy, mental illness, guardianship, intoxication, corporate incapacity)
• Illegality
• Unconscionability
• Public Policy

NY Rules:

• Infancy NOT a defense for contracts involving marital homes, artistic or athletic services, student loans (for 16 years and older), and life insurance contracts (for 14 1/2 years or older)
• Usury is available for contracts that include interest rates of more than 25%.
• Exculpatory clauses limiting liability can be applied to negligence claims, but are unenforceable against gross negligence claims. BUT not available even for ordinary negligence in construction, repair, and maintenance contracts, and those pertaining to pools, gyms, and places of public amusement.
• Pay if Paid Contracts - agreements in which subcontractors are not paid unless general contractor is paid are unenforceable.

Conduct indicates an agreement between parties

Without paying, B joins a tour group. The tour guide can charge B the fee for the tour because B’s conduct of joining the group implied agreement with the contract.

Implied when:

• plaintiff has measurable benefit from defendent
• plaintiff acted with gratuitous intent
• it would be unfair for the defendent not to have to pay for the benefit (e.g., defendent had opportunity to decline benefit, or plaintiff had reason for not seeking approval before offering the benefit

• Express warranty
• Implied warranty of merchantability (only where seller is a merchant)
• Implied warranty of fitness for a particular use (seller need not be a merchant)