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83 Cards in this Set
- Front
- Back
Offer
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A promise which creates in the offeree a power of acceptance.
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Acceptance
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Manifestation of assent to the terms made by the offeree in a manner invited or required by the offeror.
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Lucy v. Zehmer
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Objective Theory of Contract Formation
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Restatement 62
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When offer invites acceptance by either performance or promise, the beginning of the invited promise or tender of performance = acceptance by performance and operates as promise to perform
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Petterson v. Pattberg
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Unilateral Contract - can revoke before acceptance.
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Leftkowitz v. Greater Minneapolis Surplus Store
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Advertisements binding agreement if offer is clear, definite, explicit, leaves nothing open for negotiation, is offered in return for something requested.
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Davis v. Jacoby
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Bilateral contract cannot be withdrawn/modified upon performance.
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Fujimoto v. Rio Grande Pickle Co
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Acceptance by Action
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Day v. Caton
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Acceptance by Silence
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Morrison v. Thoelke
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Mailbox Rule
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Livingstone v. Evans
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Counteroffer doesn't reject if the counter-offeror indicates that he is still standing by his original offer & offeror is still willing to accept it.
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Loring v. City of Boston
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Termination of offer by Lapse - end of reasonable time
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Phillips v. Moor
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Revocation must be made in a reasonable time if you have the right to do so.
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Continental Laboratories v. Scott Paper Co.
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Intent to memorialize oral agreement in writing:
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Walker v. Keith
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Indefiniteness: When parties leave price open, court can't insert price unless there's a specific method of computation
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Dickenson v. Dodds
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Revocation: not effective until received by the offeree. Receipt can be from a reliable 3rd party
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Hoffman v. Red Owl Stores
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Promissory Estoppel: damages shouldn't put the promisee in a better position than performance would've imposed, shouldn't put a greater burden on the promisor than performance would've been.
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Allegheny College v. National Chautauqua County Bank
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Courts enforce charitable subscription without consideration, actual reliance
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James Baird Co. V. Gimbel Bros.
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Sub-contractor's bid temporarily irrevocable for period necessary to allow contractor to get the job & accept the sub-contractor's bid.
If subcontractor is bargaining for acceptance, Promissory estoppel is not appropriate. |
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Beard Implement Co. v. Krusa
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UCC 2-206: When manner of acceptance is unambiguously indicated by language or circumstances, no other manner is appropriate.
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Commerce & Industry Ins. Co. v. Bayer Corp.
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2-207: Battle of the Forms
Proviso - when acceptance is conditional upon acceptance of new additional/terms & seller performs without acceptance: No contract. |
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Klocek v. Gateway, Inc.
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2-207: Battle of the Forms
When there's no proviso, both parties are not merchants, you need express agreement to additional terms to enforce. |
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Schurtz v. BMW of North America
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2-719: Limiting Remedy of Warranties
2 approaches - if (1) & (2) are read dependently & warranty fails its essential purpose, can go for consequential/incidental damages w/out having to prove unconscionability. If (1) & (2) are read independently, have to prove unconscionability. |
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Wood v. Lucy
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Consideration: Implied promise of Good faith effort to perform is sufficient consideration in exchange for compensation.
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Schnell v. Nell
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Sham Consideration: when the consideration shows there is no bargain at all - often sham consideration to make a gift
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Schnell v. Nell
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Consideration/Past Consideration/Moral Obligation not sufficient.
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Hamer v. Sidway
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Consideration just has to be a legal detriment, does not have to hurt the promisee
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Batsakis v. Demotsis
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Court rarely looks at adequacy of consideration unless the consideration is not fungible - i.e. difference in currency. Court will then look to see if consideration was bargained for.
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Fiege v. Boehm
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Forbearance on invalid claim:
Majority: need good faith AND belief must be reasonable. 2nd Restatement: Good faith OR plaintiff's subjective belief that claim had merit |
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Sylvan Crest & Gravel Co. v. United States
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Alternative Promises: When promisor reserves alternative performances - consideration if each of the alternatives would've been consideration if it'd been bargained for alone.
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McMichael v. Price
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UCC 2-306 Output/Requirements - exclusivity is sufficient consideration to bind parties.
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Mills v. Wyman
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Benefits previously received but not requested: promises to pay for them are not enforceable if they're a gift.
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Webb v. McGowin
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Courts may enforce benefit to recipient of services if benefit was substantial, recipient would've bargained for it had he been able to, justice would require enforcement.
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Harris v. Watson
Stilk v. Myrick Lingenfelder v. Wainwright Brewery |
Pre-existing duty: If party does or promises to do what he's already legally obligated to do, then no consideration.
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Clark v. Elza
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Executory accord - enforceable as bilateral contract - effect: suspends previous duty.
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Hawkins v. McGee
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Expectation damages put the aggrieved party in the position they would've been in had the other party performed.
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Peevyhouse v. Garland Coal & Mining Co.
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Expectation damages calculated by diminution in value when damages would've been disproportiantly higher than value of full performance.
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Sea Colony East v. Carl M. Freeman Associates
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Useful life calculation of expectation damages - not sued when the party did not have full use of components during "useful life"
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Sullivan v. O'Connor
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Reliance damages used when you can't calculate expectation damages w/ certainty or when court is hesitant to give expectation damages.
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Maglica v. Maglica
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Restitution damages calculated by value of services, not value of benefit conferred.
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Feingold v. Pucello
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Value of services not given when they are given to someone unethically.
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Britton v. Turner
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Breaching Plaintiff: If he didn't substantially perform, he can't recover on the contract--cost avoidance, cannot go beyond contract price.
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Lumley v. Wagner
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No specific performance for contract for services, but equitable remedy could be injunction to compete
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Laclede Gas v. Amoco Oil
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Specific Performance: available under other proper circumstances - e.g. special price, availability, long term contract w/ fluctuating market
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Centex Homes Corp. v. Boag
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Specific performance not appropriate when damages are readily measurable and $ damages would be adequate
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Freund v. Washington Square Press
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Limit damages for uncertainty: If too uncertain for causation, amount, speculative profits, then no recovery for expectation dmaages
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Humetrix Inc. v. Gemplus
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Lost profits are not too speculative when you can put a value on the expectation - if you can reasonably determine by calculation
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Hadley v. Baxendale
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Consequential damages from special circumstances - the circumstances must be reasonably foreseeable to both parties at the time of contracting, but don't need express/tacit agreement to be liable for them.
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Rockingham County v. Luten Bridge Co.
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P must mitigate unnecessary damages. If he doesn't, then he can't collect for avoidable damages.
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Parker v. Twentieth Century Fox
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For employment contracts, P doesn't have to take different/inferior job than the one contracted to mitigate damages.
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Hibschman Pontiac, Inc. v. Batchelor
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Punitive Damages: very hard to get.
Recoverable only if breaching conduct is also a tort where you can get punitive damages OR if there's sufficient evidence of fraud |
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Yarbro v. Neil McGinnis Equipment
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Statute of Frauds - Exception to Suretyship. Leading Object Rule: If there's a pecuniary/business main reason for surety taking on someone else's debt - don't need writing.
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Satterfield v. Missouri Dental
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Statute of Frauds - One-Year Provision: If a contract, by its terms, can't be performed w/in 1 year from the time of its making, you need a writing.
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Wagers v. Associated Mortgage Investers
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State of Frauds: Land Transaction - exception - possession, improvement, partial payment = part performance. need 2/3.
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Thomson Printing Machinery Co. v. B.F. Goodrich Co.
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2-201: 10 Day rule exception: If merchant sends other merchant memo confirming oral agreement and merchant doesn't respond w/in 10 days, he can't claim statute of frauds defense. Acceptance by agent (mailroom) is ok. must use due diligence in getting the memo to the right person.
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Crabtree v. Elizabeth Arden Sales Corp.
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Statute of Frauds - Memo Satisfying: Older view: if we don't have same subject matter, if signed writing refers to unsigned writings, we can piece it together.
Modern View: Ned at least 1 signed writing, and all the writings put together gives you the essential terms & have same subject matter. |
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Eastern Dental v. Isaac Masel
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2-201: Satisfying Statue of Frauds writing - need quantity in writing or if it's requirements/output contract - need it to say requirements/output
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McIntosh v. Murphy
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Promissory Estoppel exception Statute of Frauds. Consider if there's reasonable reliance, availability/adequacy of other remedies, definite/substantial character of action in relation to remedy sought, extent to which action corroborates existence of contract
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Restatement 87(2)
Option Contracts |
Applies to bilateral & unilateral contracts.
An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice. Applies to preparation to performance |
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Restatement 45
Option Contract Created by Part Performance or Tender |
Applies to Unilateral Contracts only
Where an offer invites an offeree to accept by rendering a performance & does not invite a promissory acceptance, an option contract is created when the offeree tenders or begins the invited performance Preparation to perform is not sufficient. |
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Restatement 90
Promise Inducing Action/Forbearance |
1. A promise which the promisor should reasonably expect to induce action or forbearance on the part of the promisee or a 3rd 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 (1) without proof that the promise induced action or forbearance. |
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Restatement 131
Requirements of a Memorandum |
Identifies subject matter of contract
Indicates that a contract regarding subject matter has been made between the parties or offered by the signer to the other party States with reasonable certainty the essential terms of the unformed promises depending on: agreement & its context Subsequent conduct of the parties Dispute which arises Remedy Sought |
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Restatement 139
Enforcement by Virtue of Action in Reliance |
A promise which the promisor should reasonably expect to induce reliance by the promisee and does induce reliance is enforceable notwithstanding the Statute of Frauds if injustice can be avoided only by enforcement.
To determine whether injustice can be avoided only by enforcement: -availability & adequacy of other remedies -definite & substantial character of the reliance in relation to remedy sought -extent to which reliance corroborates evidence of making/terms of the promise or evidence establishing those terms -reasonableness of the action/forbearance -extent to which the reliance was foreseeable by the promisor |
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Restatement 355
Punitive Damages |
Recoverable only if the conduct constituting the breach is also a tort for which punitive damages are recoverable.
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Restatement 349
Damages Based on Reliance Interest |
As an alternative to the measure of damages stated in § 347, the injured party has a right to damages based on his reliance interest, including expenditures made in preparation for performance or in performance, less any loss that the party in breach can prove with reasonable certainty the injured party would have suffered had the contract been performed.
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Restatement 347
Measure of Damages in General |
The injured party has a right to damages based on his expectation interest as measured by:
(a) the loss in the value to him of the other party's performance caused by its failure or deficiency, plus (b) any other loss, including incidental or consequential loss, caused by the breach, less (c) any cost or other loss that he has avoided by not having to perform. |
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Restatement §48. Death or Incapacity of Offeror or Offeree
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Death or Incapacity of Offeror or Offeree
An offeree's power of acceptance is terminated when the offeree or offeror dies or is deprived of legal capacity to enter into the proposed contract. |
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Exceptions to Perfect Tender Rule
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1. Installment Contracts: Need substantial impairment
2. Cure: If seller offers to cure 3. Shipment Contracts: Need material delay or loss 4. Di Minimus |
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Ways of Terminating Power of Acceptance
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1. Lapse
2. Counter-offer (without standing by original offer) 3. Rejection 4. Death or Incapacity 5. Revocation |
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Things Considered in Determining Parties' Intent to Memorialize Agreement
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1. Parties' actions/words, surrounding circumstances
2. Amount is big, rather than small 3. Type of contract usually requires written expression 4. Lots of details vs. small 5. Routine transaction vs. unusual transaction 6. Details agreed upon vs. unresolved 7. Negotiations showed a writing was required |
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Advertisements as binding obligation
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1. offer is clear, definite, explicit, leaves nothing open for negotiation
2. offers performance promised in return for something requested |
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Mailbox Rule
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1. if properly addresed, effective upon dispatch
2. If not, effective upon dispatch if received w/in normal time of properly dispatched acceptance 3. If it comes later, then acceptance upon receipt. 4. Option Contracts: effective upon receipt. |
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Option contract by operation of performance
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1. unilateral contract (R45): by part performance
2. either (R87-2): based on substantial/foreseeable reliance |
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Forbearance on Invalid Claim
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Majority View: need good faith & reasonable belief
Restatement View: Either good faith or subjective belief |
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Conditional promises
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1. Outside of promisor's control - consideration
2. Conditions that cannot occur - no consideration 3. Within promisor's partial control: implied promise to make the condition occur - sufficient consideration 4. Promisee's discretion: no consideration |
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2-306
Output/Requirements |
Measuring output/requirements must be in good faith. No unreasonably disproportionate quantities may be tendered/demanded.
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Agreements to Accept Part Payment of Debt in Satisfaction of the Whole
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View 1: not binding for lack of consideration unless pay early or change the way that you pay, refrains from bankruptcy, debt consolidation
View 2: Only binding when debt is undisputed. View 3: Enforce for policy reasons. |
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Diminutive Value Measurement
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When there's economic waste from cost of performance - cost is disproportionate to the probable loss in value to plaintiff OR remedying the defect would require destruction of what's already been done.
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Useful Life
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When you adjust cost of performance by expired useful life of defective component.
Put the P in the position he would've been in w/out breach |
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Reliance Damages
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Use when:
1. P can't calculate expectation damages w/ certainty 2. Court is hesitant to give expectation damages 3. When there's no enforceable contract |
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Calculating Restitution Damages
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Net Enrichment: the extent that your services have enriched the other party
Cost Avoidance: What you would've had to pay someone else for the service |
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Equitable Remedies
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CL uses for:
1. Unique benefit 2. Damages not measurable 3. Other equitable reasons - policy |
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Liquidated Damages Reasonableness of Amount
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Traditional View: Reasonable as of time of contracting
Modern View: At time of contracting OR at time of breach/trial compared to actual damages |