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61 Cards in this Set
- Front
- Back
Statute of Frauds
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certain agreements are required by law to be in writing or evidenced by a record. If there is no written evidence of the contract, it may not be enforceable
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Parol evidence rule
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if a court finds that the parties intended their written contract to be a complete and final statement of their agreement, then it will not allow either party to present parol evidence (testimony or other evidence of communications between the parties that are not contained in the contract itself)
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Contracts required to be in writing
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1. Contracts involving interests in land
2. Contracts that cannot be performed within one year from the day after the date of formation. 3. Collateral, or secondary, contracts 4. Promises made in consideration of marriage. 5. Under the Uniform Commercial Code contracts for the sale of goods priced at $500 or more |
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Contracts Involving Interests in Land
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A contract calling for the sale of land is not enforceable unless it is in writing or evidenced by a written memorandum. Land is real property and includes all physical objects that are permanently attached to the soil, such as buildings, fences, trees, and the soil itself
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Contracts Involving Interests in Land exceptions
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Partial Performance
Admission Promissory Estoppel |
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The One-Year Rule
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Contracts that cannot, by their own terms, be performed within one year from the day after the contract is formed must be in writing to be enforceable
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The One-Year Rule exceptions
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Admission
Promissory Estoppel |
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Collateral Promise
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one made by a third party to assume the debts or obligations of a primary party to a contract if that party does not perform
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Collateral Promise exceptions
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Main Purpose rule
Admission Promissory Estoppel |
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Promises Made in Consideration of Marriage
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A unilateral promise to make a monetary payment or to give property in consideration of a promise to marry
ex. prenuptial agreements |
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Contracts for the Sale of Goods
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The Uniform Commercial Code (UCC) includes Statute of Frauds provisions that require written evidence or an electronic record of a contract for the sale of goods priced at $500 or more
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Contracts for the Sale of Goods exceptions
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Customized goods
Admission (quantity) Partial Performance |
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Partial Performance
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when the purchaser has paid part of the price, taken possession of the property, and made permanent improvements to it, the parties clearly cannot be returned to the positions they occupied before the contract was formed
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Admissions
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In some states, if a party against whom enforcement of an oral contract is sought "admits" in pleadings, testimony, or otherwise in court that a contract for sale was made, the contract will be enforceable.9 A contract subject to the UCC will be enforceable, but only to the extent of the quantity admitted.
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Promissory Estoppel
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if a promisor makes a promise on which the promisee justifiably relies to his or her detriment, a court may estop (prevent) the promisor from denying that a contract exists
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Main Purpose Rule
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If the main purpose of the contract between A & B is to benefit C, it doesn't have to be in writing
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Special exceptions under the UCC
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apply to sales contracts. Oral contracts for customized goods may be enforced in certain circumstances. Another exception has to do with oral contracts between merchants that have been confirmed in a written memorandum
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Exceptions to the Parol Evidence Rule
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1. Contracts subsequently modified
2. Voidable or void contracts 3. Contracts containing ambiguous terms 4. Incomplete contracts 5. Prior dealing, course of performance, or usage of trade 6. Contracts subject to an orally agreed-on condition precedent 7. Contracts with an obvious or gross clerical (or typographic) error that clearly would not represent the agreement of the parties |
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Condition precedent
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the parties agree that a condition must be fulfilled before a party is required to perform the contract
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Integrated contract
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whether the written contract is intended to be a complete and final statement of the terms of the agreement
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Assignment
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The transfer of contractual rights to a third party
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Rights that cannot be assigned
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1. When a Statute Prohibits Assignment
2. When a Contract Is Personal in Nature 3. When an Assignment Will Significantly Change the Risk or Duties of the Obligor 4. When the Contract Prohibits Assignment |
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Delegations
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does not relieve the party making the delegation (the delegator ) of the obligation to perform in the event that the party to whom the duty has been delegated (the delegatee ) fails to perform. No special form is required to create a valid delegation of duties. As long as the delegator expresses an intention to make the delegation, it is effective; the delegator need not even use the word delegate
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Duties that cannot be delegated
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1. When the Duties Are Personal in Nature
2. When Performance by a Third Party Will Vary Materially from That Expected by the Obligee 3. When the Contract Prohibits Delegation |
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Third Party Beneficiary
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When the original parties to the contract agree that the contract performance should be rendered to or directly benefit a third person
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Intended Beneficiary
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Has legal rights and can sue the promisor directly for breach of the contract
1. Performance is rendered directly to the third party. 2. The third party has the right to control the details of performance. 3. The third party is expressly designated as a beneficiary in the contract. |
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Creditor Beneficiary
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benefits from a contract in which one party (the promisor) promises another party (the promisee) to pay a debt that the promisee owes to a third party (the creditor beneficiary).
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Donee beneficiary
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When a contract is made for the express purpose of giving a gift to a third party, the third party (the donee beneficiary) can sue the promisor directly to enforce the promise
ex. life insurance policy |
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When do the rights of third parties vest?
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1. The third party materially changes his or her position in justifiable reliance on the promise.
2. The third party brings a lawsuit on the promise. 3. The third party demonstrates her or his consent to the promise at the request of the promisor or promisee |
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Incidental beneficiary
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The benefit they receive from a contract between two parties is unintentional
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Condition
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a possible future event, the occurrence or nonoccurrence of which will trigger the performance of a legal obligation or terminate an existing obligation under a contract.1 If this condition is not satisfied, the obligations of the parties are discharged
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Conditions Precedent
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A condition that must be fulfilled before a party's performance can be required
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Conditions Subsequent
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The condition follows the time that the absolute duty to perform arose. If the condition occurs, the party's duty to perform is discharged
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Concurrent Conditions
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When each party's performance is conditioned on the other party's performance or tender of performance (offer to perform). Occur only when the contract calls for the parties to perform their respective duties simultaneously.
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Express conditions
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provided for by the parties' agreement.
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Implied conditions
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understood to be part of the agreement, but they are not found in the express language ofthe agreement
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Tender
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an unconditional offer to perform by a person who is ready, willing, and able to do so
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Anticipatory repudiation
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Saying in advance the intention to not perform on the contract
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Rescission
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the process by which a contract is canceled or terminated and the parties are returned to the positions they occupied prior to forming it
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Novation (&4)
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when both of the parties to a contract agree to substitute a third party for one of the original parties. The requirements of a novation are as follows:
1. A previous valid obligation. 2. An agreement by all parties to a new contract. 3. The extinguishing of the old obligation (discharge of the prior party). 4. A new contract that is valid. |
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Settlement Agreement
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arises out of a genuine dispute over the obligations under an existing contract will be recognized at law. Such an agreement will be substituted as a new contract, and it will either expressly or impliedly revoke and discharge the obligations under any prior contract
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Accord and Satisfaction
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the parties must agree to accept performance that is different from the performance originally promised
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Discharge by operation of law (4)
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1. Alteration of the Contract
2. Statutes of Limitations 3. Bankruptcy 4. Impossibility or Impracticability of Performance |
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Alteration of the Contract
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the law operates to allow an innocent party to be discharged when the other party has materially altered a written contract without consent
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Statute of Limitations
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restrict the period during which a party can sue on a particular cause of action. After the applicable limitations period has passed, a suit can no longer be brought to court
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Bankruptcy
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bar enforcement of most of the debtor's contracts by the creditors
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Impossibility or Impracticability of Performance
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After a contract has been made, supervening events (such as a fire) may make performance impossible in an objective sense. Performance may also become so difficult or costly due to some unforeseen event that a court will consider it commercially unfeasible, or impracticable
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Temporary Impossibility
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An occurrence or event that makes performance temporarily impossible operates to suspend performance until the impossibility ceases. Then, ordinarily, the parties must perform the contract as originally planned. If, however, the lapse of time and the change in circumstances surrounding the contract make it substantially more burdensome for the parties to perform the promised acts, the contract is discharged.
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Types of Damages (4)
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1. Compensatory(to cover direct losses and costs).
2. Consequential(to cover indirect and foreseeable losses). 3. Punitive(to punish and deter wrongdoing). 4. Nominal(to recognize wrongdoing when no monetary loss is shown). |
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Compensatory damages
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These damages compensate the injured party only for damages actually sustained and proved to have arisen directly from the loss of the bargain caused by the breach of contract. They simply replace what was lost because of the wrong or damage and, for this reason, are often said to "make the person whole."
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Incidental damages
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Expenses that are caused directly by a breach of contract—such as those incurred to obtain performance from another source
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Sale of Goods
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usual measure of compensatory damages is an amount equal to the difference between the contract price and the market price
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Sale of Land
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Ordinarily, because each parcel of land is unique, the remedy for a seller's breach of a contract for a sale of real estate is specific performance—that is, the buyer is awarded the parcel of property for which she or he bargained. When this remedy is unavailable (because the seller has sold the property to someone else, for example) or when the buyer is the party in breach, the measure of damages is typically the difference between the contract price and the market price of the land.
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Consequential damages
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They are caused by special circumstances beyond the contract itself. They flow from the consequences, or results, of a breach.
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Punitive damages
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designed to punish a wrong-doer and setan example to deter similar conduct in the future, they have no legitimate place in contract law
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Nominal damages
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When no actual damage or financial loss results from a breach of contract and only a technical injury is involved. often small, such as one dollar, but they do establish that the defendant acted wrongfully
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Mitigation of damages
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Non-breaching parties have a duty to mitigate the breach of contract (in a reasonable amount of time)
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Liquidated damages
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provision in a contract specifies that a certain dollar amount is to be paid in the event of a future default or breach of contract
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Rescission and Restitution
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Rescind the contract and pay restitution. (returning goods, property, or funds previously conveyed.9 If the property or goods can be returned, they must be. If the goods or property have been consumed, restitution must be made in an equivalent dollar amount.)
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Reformation
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an equitable remedy used when the parties have imperfectly expressed their agreement in writing. Reformation allows a court to rewrite the contract to reflect the parties' true intentions.
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Requirements of Quasi Contract
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1. The party has conferred a benefit on the otherparty.
2. The party conferred the benefit with the reasonable expectation of being paid. 3. The party did not act as a volunteer in conferring the benefit. 4. The party receiving the benefit would be unjustly enriched if allowed to retain the benefit without paying for it. |