Final cheat sheet - Summary Contracts I PDF

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Contracts I with Channick...

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K= promise the law will enforce, and for which the law will provide a remedy in the event of a breach| need: offer, acceptance, mutual assent and consideration. OFFER:elements= present intent to enter a K, has definite essential terms, communicated through words/deeds to offeree. ACCEPTANCE:elements= definite, unequivocal, doesn’t add new/ad. terms, offeree must know of the offer.

Offer= willingness to be bound by K; justifies oe in understanding assent will conclude bargain; POA in oe; R2: manif of will to enter into bargain to essential term Acceptance= manif of assent to the essential terms of offer; mixed motives do not invalidate offer; silence not effective acceptance unless customs/retained benefit; only 2 way to manifest assentà in BK exchange promise or UK tender performance Under Common Law: mirror image= must mirror the terms of the offer; otherwise c/o; mailbox=acceptance upon dispatch & rejection/revocation upon receipt;last shot rule: when parties exchange multiple forms, the last form signed is considered an acceptance and binding; ss 35= POA (1) offer gives to the offeree a continuing power to complete the manifestation of mutual assent by acceptance of the offer For UCC: 2-207 à definite and seasonable expression of acceptance even if it states terms from or additional to the offer In absence of accept: 2-205 firm offers kept open if: offeror is a merchant, merchant signs a writing of the offeror, if offeree supplies the form, offeror must separately sign, time where offer cannot be revoked may not exceed 3 months unless otherwise stated—need add c if longer à termination of POA: usually r2d; death, nonoccurrence of condition of acceptance, lapse, rejection, c/o, revocation Under Mutual Assent= offer + acceptance; intent to be bound by terms of K; meeting of minds; courts use obj standard (reasonable would think); if there is a mistake? Mututal assent is not present(U- one mistaken bi both mistaken) R2d= defines an offer as a manif of willin to enter into bargain to essential term ss19: conduct as manif of assent= 1. Manif of assent may be made wholly or partly by written or spoken words or by other acts or by failure to act 2.The conduct of a party is not effective as a manifestation of his assent unless he intends to engage in the conduct and knows or has reason to know that the other party may infer from his conduct that he assents, 3. The conduct of a party may manifest assent even though he does not in fact assent. In such cases a resulting contract may be voidable because of fraud, duress, mistake, or other invalidating cause. Ss20: effect of misunderstandingà 1. There is no manif of mutual assent to an exchange if parties attach materially different meanings to their manifs Consideration= bargain for exchange of legal value; must benefit promisor and be detriment to promise; test for reciprocal inducement(detrim must be price of exchange) does not have to be economic value Past c: written promise to pay time barred debt, new/diff consid promised, promise to renew voidable oblig, compromise of genuine dispute Counter offers: reject the original offer and make a new offer à NOT c/o= grudging acceptance, inquiries about k, oblig removed for benefit of offeror Restatement c/o – ss59 purported acceptance which adds qualifications: a reply to an offer which purports to accept it but is conditional on the offeror’s assent to terms additional to/or diff from those offered is not an acceptance but it a c/o Rejection: manif of intent not to accept unless--Offeree manifests intent to take it under further advisement o Restat ss38 Offer is rejected when offeror is justified in believing offeree intends not to accept of take under further advisement Revocation: offeror can revoke anytime before acceptance; effective on RECEIPT unless: Promissory estoppel/Detrimental reliance: create an OK then promise not to revoke; offeror should reasonably expect to induce action or forbearance, then it occurs, OK is binding to avoid injustice to offeree o Under UCC OK only require signed writing Partial performance: once offeree starts perform, offer must remain open for reasonable time. PREP does not = perform If UCC 2-205: FIRM offer cannot revoke FORMATION OF K Under Common Law: restatementsà definiteness is required à offer must be so definite as to material terms that promises and terms of parties are reasonable à material terms= subject matter of k, price/ mechanism to use to set price, terms of payment, quantity, quality, and duration Under UCC for missing terms: GAP FILLERS 2-204 formation and 2-305 price à 2204/2305 work together to govern K formation by supplying gap fillers; help created enforceable K even when there is indefiniteness/missing terms; used if parties intend to be bound by K and court can find reasonable basis for filling in terms à may be enforceable with terms omitted= price, place and time for deliv, duty to perform in good faith àkey term for sale of goods= quantity; not always a number à knock out rule= different terms cancel each other out AND replace by UCC gap fillers Invoked if--- parties intended to be bound at time of k, court can find reasonable basis fo remedy 2-204= formationà K may be formed by any reasonable conduct that recognizes K’s existence, may be formed even if the moment of formation is undetermined, if there is a reasonable basis for supplying missing terms, the K will not fail due to indefiniteness 2-305= priceà missing price in K, price will be reasonable at time of deliv o Requirements; price not in k, no formula to determine price, price not set by 3rd party 2-206= offer and acceptanceà offers to buy goods invite accept by any reasonable means unless stated otherwise 2-207= battle of the formsà provides clarity when formation occurs over the course of a long negotiation o Definite and seasonable timely expression of acceptance operate as acceptance when sent w/in reasonable time even w/ diff/additional terms UNLESS: acceptance is expressly conditioned as assent to diff/added terms o Additional terms when both merchants become part of k auto unless: offer expressly limits accept to terms in offer, the add terms materially alter the offer, or offeree objects to add terms w/in reasonable time o Conduct of parties recognizes existence of k is sufficient to establish sale of k--- k will consist of terms on which the writings of parties agree + supp terms inc. by ucc in form of gap fillers Rolling kà parties’ actions manifest the creation of a K, but terms are presented afterwards; allowed under UCC Gratuitous promises: made w/o expectation of return performanceà a gift; à element= intent to make a gift and delivery

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General rule: not enforceable b/c fail recip induce test BUT--- once part perform of grat prom begins, prom becomes binding to prevent injustice Promise to give someone a place to stay for free, even for a finite time is gratuitous and unenforceableà kirskey v Kirksey àcharitable subscrips: general rule= donative promises are not enforceable but charitable subscrips may be exception Elements= promise to give something of value to a charity or institution, consideration or reliance on such promise o w/o c then reliance is required to enforce promiseà MLK o reliance= when a party substantially changes position b/c of promises or manif made by other party à bailments are not donative promise extra step of reliance may transform a bailment into a charitable subscrip o bailee must take exceptional care of the bailment § bailment duty illusory promises: does not actually bind the promisor under common law= ss77 illusory and alternative promises: A promise or apparent promise is not consideration if by its terms the promisor or purported promisor reserves a choice of alternative performances unless : (a) each of the alternative performances would have been consideration if it alone had been bargained for; or (b) one of the alternative performances would have been consideration and there is or appears to the parties to be a substantial possibility that before the promisor exercises his choice events may eliminate the alternatives which would not have been consideration. I will buy this from you if I feel like it Conditional promises: binding right now BUT due after condition precedent occurs; they are enforceable unless the condition is under the promisor’s controlà “if it rains” condition Good faith: binding k requires each party negotiate in good faith; honesty about material facts/adhere to reasonable standards of fair dealing. Does not require they reach a final agreement; need only to give a fair shot Agreement to agree: parties leave term open to agree to later; binding IFà parties can agree to term at time of performance ot K includes method for determining the term Letters of intent: there is written indication of party’s intent to enter into bargain; not binding UNLESS= identifies parties, recite the purported ~c (includes sub matt and price/method to determ price), parties intend to be bound at time of LOI If recites essential terms, court can fill in terms upon determ it is binding Implied K: possible to have a k w/o all elements of formation being fullfiled; use when there is no express written/verbal agreement BUT conduct that seems to recognize K à implied in fact= real k where party intended to accept but did not use words of acceptance but used conduct; implied in law= not real K; person confers measurable benefit w/ reasonable expec of compensation so justice requires ujustly retained benefits be disgorged/aid; LIKE RESTIT, but no agree by parties (like the painting while ur on vacay example on midterm) Exception--- officious intermeddler aka emergency aid; a person who officiouslt confers a benefit on another is entitled to restit BK: exchange of mutual promises; 2 ways to manifest assent to a bargain= make an exchange promise or tender performance. UK: only accepted w/performance; full perf. Not required. Create UK= offeror indicate perf. Only way to accept or offer to public requires accep. by perf.; in UK, performance= acceptance & consideration. OPTION: K facilitate larger transaction; gives offeree time to consider by freezing offer for period of time; enforceable= in writing, sign by offeror, recites purported consid. for option,and proposes exchange on fair terms in reasonable time. Under common lawà ss87 offer +sep consid to hold offer open. Ex: subcont inserting lowest bid to induce GC to use its bid in overall bi and binding b/c induced GC to choose their bid Promissory estoppel: not the same as Option K b/c PE does not anticipate some return performance; there is no consid. Elements= promise, which promisor should reasonably expect to induce action by the promisee, such action occurs and our sense of justice now requires that the promise be kept o Exception—bidders mistake known/should’ve been known (lower); clear statement by offror the offer is revocable any time before accept; pe unavail to offeree who delay accept in hope of getting better deal Under common law= ss90promise reasonably induction action/forebear: (1) A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a third person and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise. The remedy granted for breach may be limited as justice requires. (2) A charitable subscription or a marriage settlement is binding under Subsection (1) without proof that the promise induced action or forbearance. Essentiallyà turns unenforceable prom into enforce b/c detrimental reliance; successful PE estops the promisor from denying benefit to the promise to promise Not a K= if certain elements are not met then it is an alternative reason to enforce a promise in the absence of consideration--cook v Caldwell Exceptions--- 1. Preex oblig cannot be enforced due to stat of lim, but obligor reaffirms, 2. Prev unenforc due to infancy but reaffirmed when mature, 3. Debt not enforced due to bankrupt then reaffirm, 4.. promise made in recog of prev benefit is binding to prevent injustice UNLESS was gift/value was disprop to benefit conferred Drennan rule—general contractor may enforce a subcon bid when there is reasonable detrimental reliance under PE theory Conditions can be express ( condition precedent, act or event must occur before duty to perform is due) constructive(duty to perform may be implied by bargain itself/duty to each to perform is conditioned on each rendering perform) or mutual dependency (1 perform is condition to others to perform; party whose perform takes longest must act first) Wrap agreements: elementsà notice of terms, manif of assent and opport to reject à shrinkwrap: physicalà notice buyer opens package and reads terms; there is manif of ass. And opp to reject and buyer doesn’t return à browsewrap: onlineà notice user sees hyperlink w/o scrolling, manif of ass and opp to rej ; clicking accept box and continuing to use à clickwrap: notice terms pop up and box clicked , the manif of assent and opp to rej is clicking the box/modified= notice hyperlik to click Damages/remedies: all remedies to put d in position before breach; no punative dam in K; breach occurs when no deliv on promised benef Under common law: ss351=dam not recov for loss that the p in breach did not have reason to foresee as prob result of breach when k made Expectancyà goal for expec dam= put plaintiff in posit as though k had been performed; restore plaintiffs hopes for bargain;com damages Shaft example= Hadley v baxendale

MUTUAL ASSENT: intent to be bound by terms of K, it is a “meet of the minds” when parties agree to terms @ same time; courts use ob standrd to determine if MA exists; OB standard= apparent intention manifested by each party; reasonable person would think C: bargained for exchange; must benefit the or/ detriment the ee/ test of C=recip inducement(did parties give something up in hopes of getting something else) UCC for the sale of goods or restatements (common law for services)

Formula damages: Under the Common law: seller/service provider breaches= default ruleà cost of obtaining alternate performance, UNLESS doing so would cause waste BUT If it was the “essence: of ps K or if breach was willful/wanton then use anyways; handicap children v lukaszewski If cause waste and neither exception apply? Use VALUE PROMISED – VALUE OBTAINED(KP-MP) Buyer/hirer breach=default it KP- COST OF COMPLETION OR EXPENDITURES TO DATE+ LOST PROFIT o For employment k: KP- employers duty to mitigate o Profits= total revenue- total cost Under the UCCà seller breaches: Goods deliveredà ucc 2-714: value promised-value obtained Not deliveredà UCC 2713: MP at time of breach – KP; or w/o cover then UCC2712: Cover price-KP Buyer breaches: w/goods: UCC 2709: the KP lost volume seller: when supply > demand: 2702 2: lost profit goods resold? UCC2706 KP- resale price NOT resold? UCC 2708 1 KP- MP at time of breach specials: otherwise known as incidentals or consequential damages= any damages not addressed by the starting formula; must be proved by plaintà prove foreseeability ie specially communic risks, causation aka subst factor test (d wins if can show alt causes suff by self to cause damages), certainty b/c speculative dam not good. PROFITS LOST FROM BIZZ NEVER OPENS ARE TOO UNCERTAIN TO RECOVER restitution: prevent unjust enrichment allows breaching party to recover/prevent unjust enrichment; defendant must disgorge any unjuect enrichment; if possibleà plaint must return benefits received à elements: plaint confers benefit, d knows of it, d accepts or retains benef, justice requires the def disgorge benef retained from plaint à services= QUANTUM MERUIT--- fair value of services rendered to d must be paid for; what a buyer would pay on open mark obj--- market value increase in d’s wealth sub—value in serv to partic defendant losing k? a k where the plaint would have lost money anyways where the plaint makes a bad bargain, performs serv at cost or at steep discount; restit can be applied in the absence of real K, the court awards reasonable value NOT kp of the performance rendered to def limitations= liquidated debt rule = if an injured party has fully performed its part of barg and only payment remains, recovery may not exceed the KP under common law: 373= Restitution when other party is in breach: the injured party is entitled to restitution for any benefit that he has conferred on the other party by way of party performance or reliance and 374= Restitution in favor of party in breach: if a party justifiably refused to perform on the ground that his remaining duties of performance have been discharged by the other party’s breach, the party in breach is entitled to restitution for any benefit that he has conferred by way of part performance or reliance in excess of the loss that he has caused by his own breach à goods= QUANTUM VALEBUT --- if d has received ujustly held benef in form of goods—must be returned or their value à money= if d has received unjustly held benef in $ then $ restore to plaint Reliance: costs the plain incurres as result of breach; put them in position as though k had never been made; requested when expect is hard to prove w/ certainty or when rest. Won’t adequately address harm out of pocket= expended on reliance on other persons promise to perform SEE restat s 349: right to damages based on reliance interest including expendit made in prep for performance less any lost that the party in breach can prove w/ reasonable certainty that the injured party would have suff had the k been performed lost opport or for gone opp--- somewhere else you would have made $ but turned down in reliance specific performance: this is the preferred remedy for breaches in real estate: USED WHEN MONETARY DAM hard to prove or substitute hard to obtain ( unique real prop) or collection of a money judgment is unlikely b/c it is too speculative under common lawà 362= spec performance/injunct will not be granted unless the terms of the k are sufficiently certain to provide basis for an order AND 363= will be refused if the relief would cause unreasonable hardship or loss to the party in breach under the UCCà may be ordered for long term supply k where subs are unavailable; may be ordered for custom goods Factors to evaluate in awarding SP: SP can be awarded where money damages are inadequate to provide equitable relief. For example, land, heirlooms, etc. can be awarded via SP because they are unique, such that money cannot adeq. compensate someone for the value of the land. Additionally, where it is impracticable to give money damages (because it is uncertain what the money damages would be), SP may be applicable. However, a notable exception to this is a K for personal services, because the case would have to coerce an individual to do so, and we don't favor this idea of "forced labor" through legal enforcement by court.Equity factors are also considered in awarding SP. Namely, if π can show that money damages are inadequate, still might be denied SP if the court decides that equity points towards not awarding damages.Diff of supervision to enforce SP is considered. The more supervision required, the more impractical it is for the court to enforce/lesslikely that the court will grant SP. SP for indefinite Ks=In general, the more indefinite a K is, the more likely it will require more supervision, and therefore the more likely SP will not be granted. However, other factors might balance in favor of SP, so indefiniteness isn't solely determinative. SP would cause breach of existing K with 3rd party:If SP would cause breach of a pre-existing K with a third party, and that pre-existing K was entered into in good faith, the court is much less likely to grant SP (though monetary damages would still be available to the non-breaching party against the breaching party). Exceptions to SP -property salesàSP is not needed if: (1) buyer is going to buy the property and immediately resell, because the buyer is essentially just getting money anyways, or (2) if you are the seller, because you are also just getting money.

Construction Ks:Split in jurisdictions whether SP should be granted for construction Ks. Majority view is that SP should be granted for construction Ks if the difficulties of supervision do...