BLAW EXAM REVIEW Chapter 9 Introduction Into Contracts Common law most contracts are primarily governed by state common law including contracts involving employment services insurance real property land and anything attached to it patents and copyrights Uniform Commercial Code UCC Article 2 governs those sales of goods Sale the transfer of title from seller to buyer Goods tangible personal property personal property is all property other than an interest in land Unjust enrichment keeping of a gift without offering compensation to another when compensation is reasonable Bilateral contract each party is both a promisor a person making a promise and a promise the person to whom a promise is made Unilateral contract only one of the parties has made a promise 4 elements of a contract 1 Mutual assent the parties to a contract must manifest b y words or conduct that they have agreed to enter into a contract 2 Consideration each party to a contract must intentionally exchange a legal benefit or incur a legal detriment as an inducement to the other party to make a return exchange 3 Legality of object The purpose of a contract must not be criminal tortuous or otherwise against public policy 4 Capacity the parties to a contract must have contractual capacity Certain persons such as adjudicated incompetents have no legal capacity to contract whereas others such as minors incompetent persons and intoxicated persons have limited capacity to contract All others have full contractual capacity Classification of a contract 1 Express or implied contracts 2 Bilateral or unilateral contracts 3 Valid void voidable unenforceable contracts and 4 Executed or executor contracts These contracts are not mutually exclusive For example a contract may be e express bilateral valid and executor Implied in fact contract actions speak as effectively as words Express contract in which both parties manifest assent in words Valid contract one that meets all of the requirements of a binding contract It is an enforceable promise or agreement Void contract an agreement that does not meet all of the requirements of a binding contract Thus it is not a contract at all it is merely a promise or agreement that has no legal effect Voidable contract though defective is not wholly lacking in legal effect A voidable contract is a contract however because of the manner in which the contract is formed or lack of a capacity of a party to it the law permits one or more of the parties to avoid legal duties the contracts create Unenforceable a contract that is neither void nor voidable may nonetheless be unenforceable An unenforceable contract is one for the breach of which the law provides no remedy A contract may be unenforceable because of a failure to satisfy the requirements of the statute of frauds which requires certain kinds of contracts to be evidenced by writing to be enforceable Executed contract a contract that has been fully carried out by all of the parties Executory contract contracts that are still partially or entirely unperformed by one or more of the parties Chapter 10 Mutual Assent Offer Acceptance Contract Essentials of an offer 1 Definition indication of willingness to enter into a contract 2 Communication offeree must have knowledge of the offer and the offer must be made by the offeror or her authorized agent to the offeree 3 Intent determined by an objective standard of what a reasonable offeree would have believed 4 Definiteness offer s terms must be clear enough to provide a court with a basis for giving an appropriate remedy 8 ways to terminate an offer 1 Lapse of time if the offer does not state the time within which the offeree may accept the offer will terminate after a reasonable time 2 Revocation offeror may revoke an offer at any time prior to acceptance 3 Rejection an offer is a manifestation by the offeree of his unwillingness to accept 4 Death or incompetency of either the offeror or the offeree ordinarily terminates an offer 5 Counteroffer is a counterproposal from the offeree to the offeror that indicates a willingness to contract but on terms or conditions 6 Destruction of subject matter terminates the offer 7 Subsequent illegality 8 Acceptance of an offer for a bilateral contract is some overt act by the offeree that manifests his assent to the terms of the offer such as speaking or sending a letter telegram or other explicit or implicit communication to the offeror Silence doesn t constitute acceptance Mirror Image Rule except as modified by the Code an acceptance cannot deviate from the terms of the offer Chapter 11 Conduct Invalidating Assent Chapter 12 Consideration Duress wrongful act or threat that overcomes the free will of a party Physical Compulsion coercion involving physical force renders the agreement void Undue Influence taking unfair advantage of a person by reason of a dominant position based on a confidential relationship Fraud in the Execution a misrepresentation that deceives the other party as to the nature of a document evidencing the contract renders agreement void Mistake an understanding that is not in accord with existing fact Mutual Mistake both parties have a common but erroneous belief forming the basis of the contract renders the contract voidable by either party Unilateral Mistake courts are unlikely to grant relief unless the error is known or should be known by the unmistaken party Physical duress void Mental or emotional financial voidable Undue influence voidable Fraud Inducement voidable and Execution void Mistake valid if it s unilateral unless Mutual mistake is voidable Legal benefit and a legal detriment Bargain for exchange this for that promise for a promise or a promise for performance constitutes for consideration Legal sufficiency legal quality only problem when you have preexisting duty or past consideration do something and a promise is later made in consideration of that past action not enforceable Legal sufficiency to be legally sufficient the consideration for the promise must be either a legal detriment to promise or a legal benefit to the promisor Legal adequacy legal sufficiency has nothing to do with adequacy of consideration The items or actions that the parties agree to exchange do not need to have the same value Rather the law will regard the consideration as adequate if the parties have freely agreed to the exchange Consideration is the inducement to make a promise enforceable The doctrine of consideration ensures that promises are